Silver miner Great Panther Silver (TSE:GPR)(NYSE MKT:GPL) has unveiled an updated resource estimate for its Topia mine in Durango, Mexico, with the company saying the report brings "greater confidence" in the mine model.
"The updated resource estimate at Topia reflects a more robust model and a better reconciliation with what has actually been mined," said CEO Robert Archer, in a statement Monday.
"Although the total number of ounces is reduced from the last estimate in 2011, we have greater confidence in the current model and there is still a lot of drilling to be done in the future, whereby we are confident that we can add those ounces back in again."
The NI 43-101 compliant estimate, completed by Roscoe Postle Associates, outlined a 2012 measured and indicated resource of 156,000 tonnes at 806 grams per tonne (g/t) silver, 1.47 g/t gold, 6.48% lead and 4.29% zinc, or 5.6 million silver equivalent ounces.
It also estimated 273,000 tonnes in the inferred category, grading 837 g/t silver, 0.8 g/t gold, 5.7% lead and 3.9% zinc for 9.54 million silver equivalent ounces.
The company said that though the estimate has decreased over that reported in 2011, a direct comparison between the two reports is not accurate due to differing metal prices and minimum net smelter return (NYSE:NSR) values. The latest estimate was based on a minimum NSR value of US$170/tonne.
Nonetheless, in the measured and indicated category, silver equivalent ounces declined almost 25 per cent from the 2011 report, while inferred resources fell nearly 20 per cent.
Aside from the normal mine depletion, Great Panther said the decrease can be attributed to several factors, including changing metal prices and less silver equivalent contribution from base metals, increased costs, boosting the mining dilution provision in the NSR calculation and better reconciliation guiding metal capping, among other items.
Also of note, infill drilling in the Argentina East block showed "insufficient continuity" of mineralization, the miner said, which resulted in a portion of inferred mineral resources from this area being removed.
Great Panther stressed though that the overall decline in resources has been partially countered by some "excellent exploration successes" at El Rosario, San Pablo, Oxi, Oxidada and Higueras. Indeed, the latest estimate included new resources for the Oxidada, Oxi, Higueras and San Pablo veins.
The majority of Great Panther Silver's mining so far at Topia has come from new mine development on veins reported in these latest estimates, the company said, but there is lesser production from other veins that are not included in this update and could be included in future resource estimates.
This year, the company will be undertaking a summer surface drilling program at Topia, which will be focused on the Oliva vein in the western portion, and the eastern part of the Recompensa vein, as well as several intermediate veins of interest from the 2010 campaign.
The program will also focus on more detailed drilling on the Higueras, San Pablo, and Oxidada veins, along with strike extensions of the El Rosario vein that will aim to better define Topia's mineral resources.
The latest estimate, which is effective as of June 30, 2012, used gold prices of US$1,680 an ounce, silver prices of US$28.00 an ounce, as well as lead and zinc prices of US$0.85 a pound.
Great Panther is a primary silver mining and exploration company focused on mining precious metals from its two wholly-owned operating mines in Mexico, Guanajuato and Topia.
It also owns the development-stage property San Ignacio, and an exploration stage property, Santa Rosa, which is located around 15 kilometres northeast of Guanajuato.
In the third quarter, the Mexico-focused company posted a 6 per cent decrease in third-quarter revenues year-over-year due mainly to a large in-transit shipment of concentrate, but processed ore increased by 9 per cent as metal production rose 22 per cent.
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