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Great Panther Silver says Q3 processed ore up 16%

Mid-tier silver producer Great Panther Silver (TSX:GPR)(AMEX:GPL) Friday said that ore processed in the three months ending September 30 was up 16% year-on-year.

The Vancouver-headquartered company also estimated that fourth-quarter production from its mines is expected to improve to 550,000 equivalent ounces silver, making a year-end total of approximately 2.2 million equivalent ounces silver.

Production targets for 2012 and beyond are currently under review and management expects to provide further guidance in the fourth quarter, the company said.

Great Panther owns two operating mines in Mexico - the flagship Guanajuato mine complex and the Topia silver-lead-zinc mine - and employs over 900 people.

Metal production from its two mines in the third quarter was 484,550 silver equivalent ounces, and included 343,768 ounces silver, 1,494 ounces gold, 222 tonnes lead and 294 tonnes zinc. Due to a significant drop in ore grades, metal production in the quarter was 18% lower than a year ago, the company said.

However, plant throughput in the quarter at Guanajuato was up 16% from last year and throughput at Topia was up 17%, a quarterly record, as upgrades were seen at both mines.

Great Panther Silver said for the year to date, the combined metal production is 1.65 million equivalent ounces of silver, as compared to 1.69 million equivalent ounces of silver for 2010.

At the flagship Guanajuato mine, Great Panther Silver said that ore grades are expected to improve in the fourth quarter. The deeper extensions of the Cata Alto 1 and 2 zones were explored and found to be significantly higher grade. While mining of these zones was expected in the third quarter, a short term delay to allow for additional diamond drilling means production improvements from Cata, typically the highest grade source of ore at the mine, are now anticipated in the fourth quarter, with the addition of high grade ore from the Alto 1, 1a and 2 zones at the 510 metre level, the company added.

Highlights of the Cata drilling include Alto 2 zone intersections from UG11-135 that returned 6,447 grams per tonne (g/t) silver and 29.44 g/t gold over a width of 3.20 metres, and UG11-137 that returned 2,114 g/t silver and 7.38 g/t gold over a width of 5.40 metres.

Earlier this month, the company published an initial inferred mineral resource estimate for its San Ignacio property of 611,000 tonnes at 127 g/t silver and 2.05 g/t gold, or 4.5 million silver equivalent ounces.

The San Ignacio mine covers approximately four kilometres of strike length on the La Luz vein system, which is parallel to, and five kilometres west of, the principal Veta Madre structure that hosts Great Panther's main Guanajuato mines. Diamond core drilling continued during the quarter, with the completion of 18 diamond core holes for a total of 4,881 metres.

During the course of development, any ore from the San Ignacio mine property will be trucked to Great Panther's Guanajuato plant for processing, where there is capacity to double ore throughput, the company said. The property is expected to enhance Great Panther's growth potential in 2013, with an extensive exploration and mine development program planned for next year. 

The company also announced Friday that it has appointed Graham Parsons as general manager of its Guanajuato operations. Most recently, Parsons was COO for Empire Mining (CVE:EPC), a junior exploration and mining company with interests in South-Eastern Europe.

Several opportunities exist to improve production output at Guanajuato and Parsons, a fluent Spanish speaker, is expected to add the mining expertise and management skills necessary to achieve the improvements, Great Panther Silver said.

Looking ahead, exploration drilling continues with encouraging results from the surface at San Ignacio and Topia, and from underground, at Rayas, Santa Margarita, Cata and Guanajuatito.

Great Panther Silver said it continues to work towards achieving the goals of its three-year growth strategy for its two operations and production targets for fiscal 2012 are currently under review.

Key to the success of the growth strategy is the delineation of new NI 43-101 compliant mineral resources, and drilling has been accelerated during 2011 to achieve these goals for 2012.