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Great Panther Silver up 2% on San Ignacio drilling update

Great Panther Silver (TSE:GPR)(AMEX:GPL) Thursday provided an update on the diamond drilling program at its wholly-owned San Ignacio Mine property in Guanajuato, Mexico.

Investors cheered the update, sending the stock up 2% to $2.75 in Toronto.

Since identifying a high degree of grade variability in the first nine holes, Quality Assurance (QA) procedures were significantly improved and holes ESI10-001 to ESI11-009 have been re-logged, and mineralized zones re-assayed using quarter core sampling.

Three of these earlier holes have been twinned and a comparison of half and quartered cores from holes ESI11-010 to 014 has been completed in a study to gauge the reliability of quarter core sampling. Furthermore, holes ESI11-010 to 024 have been completed using the more stringent QA protocols, the company said.

While it is clear from the additional holes drilled that there is indeed a high degree of grade variability on the San Ignacio Mine project, the QA exercise and extra drilling have provided sufficient confidence in the data for the company to re-initiate the NI 43-101 compliant mineral resource estimate for the property, to be completed in the fourth quarter 2011.

Seven silver-gold mineralized zones have now been delineated by the 2010-2011 diamond drilling at San Ignacio, namely the Melladito, Intermediate, Intermediate 5, Intermediate 2, Nombre de Dios, Nombre de Dios Footwall 1 (FW1) and Nombre de Dios Footwall 2 (FW2). Of primary importance are the Melladito and the three Intermediate zones with significant mineralization up to three metres in true width.

Great Panther said that of holes ESI11-010 to ESI11-024, holes ESI11-010 to 013 tested the north end of the various structures; holes ESI11-014, 016 and 017 were twin holes; holes ESI11-015 and ESI11-018 to 021 were fill-in holes; and ESI11-022 to 024 were drilled on the southern extensions of the structures where surface mapping and sampling indicates that the mineralized zones continue in this direction. The mineralized zones have been delineated by drilling for a total strike length of 300 metres and ongoing surface and underground mapping and sampling in old workings has extended the mineralized structures at San Ignacio a further 400 metres south of the above drilling.

Twinned holes, drilled within 15 metres of the original, include ESI10-003 (twinned by ESI11-017), ESI11-007 (twinned by ESI11-016), and ESI11-009 (twinned by ESI11-014). Between holes, the Melladito vein shows quite consistent thickness and grade continuity (ESI10-003 intersected 4.15 metres grading 2.38 grams per tonne (g/t) gold and 176 g/t silver while twin hole ESI11-017 intersected 4.27 metres grading 1.76g/t gold and 93g/t silver).

However, the Intermediate zones show high variability in thickness and grade, (Intermediate 5 vein in ESI10-003 intersected 4.25 metres grading 2.48g/t gold and 623g/t silver while twin hole ESI11-017 intersected 1.4 metres grading 0.88g/t gold and 94g/t silver). Further in-fill drilling is being planned for the mineralized portions of these veins, the company said.

A comparison of half core assaying and corresponding quarter core assaying for ESI11-010 to 014 has shown excellent assay correlation values. As such, holes ESI10-001 to ESI11-009 were re-logged and all intersections quarter cored and duly assayed. The master database now contains only the quarter cored assay values for ESI10-001 to ESI11-009, with the previous half core assays being removed for database consistency. In holes ESI10-001 to ESI11-009, significant zones of silver-gold were intersected where silver sulphides were observed in the core.

Great Panther said that the drill is working along a 200 metre strike length immediately south of the area drilled by the aforementioned holes. A second drill, originally planned for September, will be added to the project in the first quarter 2012 to expand the drilling further south. This second drill has instead been diverted to drill several deep holes at the Valenciana Mine at the main Guanajuato Complex, and to complete a preliminary drill program at the company's new Santa Rosa Project.

A further 250 metres south (on section 200N), sampling of the Melladito vein structure in the old Mina San Pablo adit returned composited assays of 2.02g/t gold and 150g/t silver over an average width of 2.03 metres, and along an accessible strike length of 25 metres.

In addition to the original San Ignacio Mine, reconnaissance of the property has identified old mine workings, comprising seven shafts and eight adits, over most of the four kilometre strike length of the property. Detailed geological mapping, geological studies, outcrop sampling, and re-sampling of old underground workings are on-going to highlight additional priority targets along the four kilometres of prospective structures.

The San Ignacio project is located in the La Luz vein system of the Guanajuato silver-gold district. The multiple vein structures are steeply dipping and low sulphidation epithermal in nature. The tops of the mineralized intervals are approximately 80-100 metres below surface in the area presently being explored and many of the vein structures do not surface. Mineralization within the veins appears to occur in shoots but the size and orientation of these have not yet been fully delineated.

The Guanajuato Mine Complex is the company's flagship operation and consists of 32 claims totalling 2,621 hectares.