Great Panther Silver (NYSEMKT:GPL) (TSE:GPR) had its buy rating and $1.10 price target reiterated by analysts at H.C. Wainwright (HCW) on the back of a marked increase in the overall resource base at its Guanajuato mine complex in Mexico, sparked by the company's new San Ignacio mine.
On Monday, the precious metals miner announced that it had bolstered the mineral resource estimate at its new San Ignacio satellite mine in Guanajuato, increasing indicated resources by more than 30 percent and over doubling the inferred resources.
The San Ignacio mine, which started operations last year, is part of Great Panther's Guanajuato mine complex (Pending:GMC), which also includes the Guanajuato mine. San Ignacio's ore is trucked 22 km to the company's Cata processing plant at the complex.
The newest resource report includes the most recent drill results at San Ignacio, and the discovery of new high grade, silver-gold mineralization to the south of the 2014 mining area.
H.C. Wainwright analyst Heiko F. Ihle said the updated resource at San Ignacio is an "incremental positive."
Indicated resources at the mine are now estimated at 180,300 tonnes at a grade of 159 grams per tonne (g/t) silver and 3.49 g/t gold, containing some 2.35 million silver equivalent ounces, up 31 percent from the July 2014 report.
"Notably, the updated resource at San Ignacio has increased the overall M&I resource base at the GMC by approximately 550,000 silver equivalent ounces," wrote Ihle in a research report released to clients earlier Tuesday.
Inferred resources at San Ignacio also increased substantially, now comprising of 787,800 tonnes at 160 g/t silver and 3.26 g/t gold, containing 9.9 million silver equivalent ounces, an increase of 162 percent from the prior estimate, Great Panther said.
This means the entire GMC, including the undeveloped El Horcon project, hosts a total of 1.1 million tonnes of inferred resources grading 140 g/t silver and 3.31 g/t gold, for a total of 13.7 million silver equivalent ounces, up by 6.1 million ounces from before.
"The overall increase in the resource base at the GMC stems from Great Panther discovering wider zones with higher grades," said HCW.
"While we expect the new zones to become a part of the production mix at the GMC, we believe further expansion at San Ignacio is possible through continued drilling in 2015."
Indeed, Great Panther said underground drilling this year will focus on improving the classification of the resource adjacent to the Melladito and Intermediate veins at San Ignacio, while surface drilling will test the depth and strike continuity of all veins.
The vein structures at San Ignacio are known to extend for roughly 4km along the length of the property, leaving almost 3km of untested strike potential.
"We continue to believe San Ignacio represents a significant portion of future production growth at the GMC and expect overall grades to increase while cash costs lower as the mine becomes a larger part of Great Panther's production profile," said HCW's Ihle.
Shares of Great Panther rose 1.3 percent in Toronto on Tuesday, to 78 Canadian cents. The stock has advanced over 11 percent year-to-date.