TSX: GPR | NYSE American: GPL
VANCOUVER, BC, May 25, 2021 /PRNewswire/ - Great Panther Mining
Limited (TSX:GPR; NYSE-A:GPL) ("Great Panther" or the "Company"), a
growing gold and silver producer focused on the Americas, reports
that wall movements have been detected in the west wall of the
south-central portion of the Urucum Central South ("UCS") open pit
at Tucano, the Company's wholly-owned mining operation in
Brazil. Heavy rainfall, well above
seasonal average, triggered higher phreatic levels in the west wall
impacting slope stability. In order to ensure health and safety for
workers, mining activities in UCS were temporarily halted. The mill
will continue to receive ore from the Urucum North open pit and
from stockpiles.
"We are working with our consultants to make operations safe,
with the expectation that mining of the higher-grade gold ore in
the UCS pit will start back up again in the third quarter of this
year," stated Rob Henderson,
President & CEO of Great Panther. "As a consequence, 2021
consolidated guidance is being reduced by 10,000 ounces to 125,000
to 140,000 gold equivalent ounces."
Activities are underway to improve wall stability, including
unloading additional waste material and improving drainage from the
upper benches. The Company expects this additional waste movement
will impact ore mining in UCS throughout Q2 and Q3 2021. These
activities are being carried out with monitoring of movement by
radar and within strict safety protocols. Water levels are being
monitored closely, and preparations are being made for horizontal
drainage holes that may be required in the lower part of the west
wall.
The Company's preliminary assessment is that 2021 production at
Tucano will be reduced by approximately 10,000 gold ounces ("Au
oz") to 100,000 – 110,000 Au oz. The second half of 2021 is
expected to account for 60% of this guidance. All-in-sustaining
costs (excluding corporate general and administrative expenses)
("AISC") are expected to increase to $1,450 – $1,550 per
Au oz sold. Revised 2021 consolidated guidance is stated in the
table below.
Revised 2021 Consolidated Guidance
|
Tucano
|
Mexico
|
Consolidated
|
|
Budget
|
Revised
|
Budget
|
Revised
|
Budget
|
Revised
|
Au eq
oz(1)
|
110,000 –
120,000
|
100,000 –
110,000
|
25,000 –
30,000
|
25,000 –
30,000
|
135,000 –
150,000
|
125,000 –
140,000
|
Ag oz
(000)
|
–
|
–
|
1,500 –
1,600
|
1,500 –
1,600
|
1,500 –
1,600
|
1,500 –
1,600
|
Au
oz
|
110,000 –
120,000
|
100,000 –
110,000
|
8,000 –
10,000
|
8,000 –
10,000
|
118,000 –
130,000
|
108,000 –
120,000
|
AISC ($/Au oz
sold)(2)
|
$1,350 –
1,450
|
$1,450 –
1,550
|
N/A
|
N/A
|
$1,350 –
1,450
|
$1,450 –
1,550
|
(1)
|
Gold equivalent
ounces for 2021 are calculated using a 1:85 ratio of the silver
price to the gold price, which is representative of the average
ratio for the respective metal prices and approximate ratios for
the price per ounce of gold to price per pound of lead and
zinc.
|
(2)
|
AISC refers to all-in
sustaining cost per gold ounce sold, excluding corporate general
and administrative expenditures, and reflects the AISC at the
Company's operating mines. The calculation starts with cash cost
net of by-product revenue and adds accretion of reclamation
provisions, lease liability payments, sustaining exploration,
evaluation and development expenses, and sustaining capital
expenditures for the operating mines. Sustaining expenditures are
those costs incurred to sustain and maintain existing assets at
current productive capacity and constant planned levels of
productive output. AISC is a non-Generally Accepted
Accounting Principle ("non-GAAP") measure. This measure is widely
used in the mining industry as a benchmark for performance but does
not have a standardized meaning as prescribed by International
Accounting Reporting Standards ("IFRS") as an indicator of
performance and may differ from methods used by other companies
with similar descriptions. Refer to the Company's Management
Discussion and Analysis for the three months ended March 31, 2021
for a reconciliation of AISC to the Company's financial statement
measures. The Company's AISC guidance assumes a Brazilian real to
US dollar exchange rate of 5.30. Actual results may
differ.
|
(3)
|
The revised
production and cost guidance for 2021 assumes no COVID-19 related
shutdowns, the Company being able to successfully regain and
maintain geotechnical control/stability of the UCS pit and access
of the mineralization in the UCS pit, based on completion of the
planned additional technical work and in accordance with the
revised Tucano mine plan, such that ore mining can recommence in
the UCS pit in Q3 2021 and continued thereafter without additional
costs or significant interruption, as well as permitting of
additional tailings storage capacity at the GMC before June 30,
2021.
|
The revised production and cost guidance estimates are
forward-looking statements and information. They should be read in
conjunction with the Cautionary Statement on Forward-Looking
Statements section at the end of this news release. The Company may
revise guidance during the year to reflect actual results to date
and those anticipated for the remainder of the year.
ABOUT GREAT PANTHER
Great Panther is a growing gold and silver producer focused on
the Americas. The Company owns a diversified portfolio of assets in
Brazil, Mexico and Peru that includes three operating gold and
silver mines, four exploration projects, and an advanced
development project. Great Panther is actively exploring large land
packages in highly prospective districts and is pursuing
acquisition opportunities to complement its existing portfolio.
Great Panther trades on the Toronto Stock Exchange trading under
the symbol GPR and the NYSE American under the symbol GPL.
TECHNICAL INFORMATION
Scientific and technical information contained in this news
release have been reviewed and approved by Neil Hepworth, Chartered Engineer UK, Chief
Operating Officer, a Qualified Person, as the term is defined in
National Instrument 43-101 - Standards of Disclosure for
Mineral Projects.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform
Act of 1995 and forward-looking information within the meaning of
Canadian securities laws (together, "forward-looking statements").
Such forward-looking statements may include, but are not limited
to, statements regarding: (i) expectations of the Company's revised
2021 Tucano and consolidated production and cost guidance in this
news release, ability to meet such production and cost guidance and
the assumptions underlying; (ii) expectations regarding the success
of the Company's plan to regain and maintain geotechnical control
of the UCS pit and the related slope stability and the Company's
ability to successfully access the mineralization in the UCS pit;
(iii) expectations regarding the amount of unloading of waste
material, drainage or other technical work that will be required to
achieve stability of the UCS pit and the related expectations of
costs associated with such technical work; (iv) expectations that
the unloading and drainage will result in an increase in stability
such that mining can recommence in the UCS pit as planned; (v)
expectations regarding the timeline to achieve geotechnical control
and stability of the UCS pit, including the expectation that ore
mining will be impacted throughout Q2 and partially in Q3, 2021;
and the related timeline to recommence ore mining of the UCS
pit in Q3 2021; and (vi) the Company's plans to pursue acquisition
opportunities to complement its existing portfolio.
These forward-looking statements reflect the Company's current
views with respect to future events and are necessarily based upon
a number of assumptions that, while considered reasonable by the
Company, are inherently subject to significant operational,
business, economic and regulatory uncertainties and contingencies.
These assumptions include: the assumptions underlying the Company's
revised 2021 Tucano and consolidated production and cost guidance
continuing to be accurate, including the accuracy of the
geological, operational and price and exchange rate assumptions
(Brazilian real to US dollar exchange rate of 5.30) on which the
revised guidance is based; continued operations at Tucano in
accordance with the Company's revised mine plan, including the
expectations that the Company will be able to regain and maintain
geotechnical control of the UCS pit and related slope stability and
that the Company will be able to successfully access the
mineralization in the UCS pit as planned; that the amount of
unloading of waste material, drainage and other technical work
associated with the UCS pit will be as currently estimated at the
costs currently budgeted for such work; that unloading and drainage
will result in an increase in stability such that ore mining can
recommence in the UCS pit as planned in Q3 2021 and continued
thereafter without additional costs or significant interruption;
all necessary permits, licenses and regulatory approvals for the
Company's operations are received in a timely manner on favourable
terms, including the granting of permits for the expansion of the
GMC tailings storage facility ("TSF") in time (before
June 30, 2021) without condition
which if not granted or conditioned, could result in an
interruption to operations; the sufficiency of the Company's
tailing storage facilities; operations not being further disrupted
by issues such as pit-wall failures or instability, mechanical
failures, labour disturbances and workforce shortages, illegal
occupations or mining, seismic events, and adverse weather
conditions; continued operations at all three of the Company's
mines in 2021 without significant interruption, additional costs,
workforce or supply shortages due to COVID-19 or any other reason;
prices for gold, silver, and base metals remaining as estimated;
currency exchange rates remaining as estimated; the accuracy of the
Company's Mineral Reserve and Mineral Resource estimates and the
assumptions upon which they are based; ore grades and recoveries;
national and international transportation arrangements to deliver
Tucano's gold doré to international refineries continue to remain
available, despite inherent risks due to COVID–19; international
refineries that the Company uses continue to operate and refine the
Company's gold doré, and in a timely manner such that the Company
is able to realize revenue from the sale of its refined metal in
the timeframe anticipated, despite inherent risks due to COVID–19;
assumptions regarding the cost of capital, decommissioning and
reclamation, energy inputs, labour, materials, and supplies and
services (including transportation); Tucano will be able to
continue to use cyanide in its operations; the ability to procure
equipment and operating supplies and that there are no material
unanticipated variations in the cost of energy or supplies; and the
Company's ability to comply with environmental, health and safety
laws. The foregoing list of assumptions is not exhaustive.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual
results, performance or achievements expressed or implied by such
forward-looking statements to be materially different. Such factors
include, among others, risks and uncertainties relating to: risk
that the Company may not be able to regain or maintain geotechnical
control or stability of the UCS pit as planned and on the timeline
expected such that it will not be able to achieve its revised
Tucano mine plan and Tucano and consolidated production and cost
guidance, generate the anticipated cash flows from its Tucano
operations and/or be able to access the UCS Mineral Reserves, each
of which risks could have a material adverse impact on the
Company's ability to continue to generate anticipated revenues and
cash flows to fund operations from and ultimately achieve or
maintain profitable operations, meet scheduled debt payments when
due or meet financial covenants to which the Company is subject;
risk that the Company may experience unforeseen additional costs
and delays associated with additional technical work required
for the UCS pit; operational and physical risks inherent in mining
operations (including pit wall collapses, tailings storage facility
failures, environmental accidents and hazards, industrial
accidents, equipment breakdown, unusual or unexpected geological or
structural formations, cave-ins, flooding and severe weather) may
result in unforeseen costs, shut downs, delays in production and
exposure to liability; the Company's ability to obtain all
necessary permits, licenses and regulatory approvals in a timely
manner on favourable terms, including the granting of permits for
the GMC TSF in time without condition which if not granted or
conditioned could result in an interruption to operations at the
GMC; gold, silver and base metal prices may decline or may be less
than forecasted; fluctuations in currency exchange rates (including
the U.S. dollar to Brazilian real exchange rate) may increase costs
of operations; the potential for unexpected costs and expenses or
overruns; the Company's ability to appropriately capitalize and
finance its operations, including the risk that the Company is
unable to renew or extend existing credit facilities that become
due which may increase the need to raise new external sources of
capital; or unable to access sources of capital which could
adversely impact the Company's liquidity and require the Company to
curtail capital and exploration program, and other discretionary
expenditures; developments with respect of COVID-19 that may
impact the Company's ability to operate as anticipated, including
the risk for further workforce and supply shortages, and unplanned
partial or full shutdown of the Company's mines and processing
plants, whether voluntary or imposed, including the risk that
shortages in purchased oxygen supply will decrease recovery rates
and throughput; the inherent risk that estimates of Mineral
Reserves and Resources may not be accurate and accordingly that
mine production will not be as estimated or predicted; risk that
dilution and mining recovery estimates used in the Mineral Reserve
estimation do not accurately reconcile with the Company's ability
to recover the tonnage, grade and metal content estimated in the
Mineral Reserves; as the Company's mines, including, but not
limited to its Mexican operations, do not have established Mineral
Reserves, except for Tucano, the Company faces higher risks that
anticipated rates of production and production costs, such as those
provided in this news release, will not be achieved, each of which
risks could have a material adverse impact on the Company's ability
to continue to generate anticipated revenues and cash flows to fund
operations from and ultimately achieve or maintain profitable
operations; employee and contractor relations; relationships with,
and claims by, local communities; there is no assurance that the
Company will be able to identify or complete acquisition
opportunities of, if completed, that such acquisitions will be
accretive to the Company; and other risks and uncertainties,
including those described in respect of Great Panther, in the
MD&A and its most recent annual information form and material
change reports filed with the Canadian Securities Administrators
available at www.sedar.com and reports on Form 40-F and Form
6-K filed with the Securities and Exchange Commission and available
at www.sec.gov/edgar.shtml.
There is no assurance that these forward-looking statements will
prove accurate or that actual results will not vary materially from
these forward-looking statements. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated, described, or
intended. Accordingly, readers are cautioned not to place undue
reliance on forward looking statements. Forward-looking statements
and information are designed to help readers understand
management's current views of our near- and longer-term prospects
and may not be appropriate for other purposes. The Company does not
intend, nor does it assume any obligation to update or revise
forward-looking statements or information, whether as a result of
new information, changes in assumptions, future events or
otherwise, except to the extent required by applicable law.
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SOURCE Great Panther Mining Limited