Robert Archer
Former President and CEO
Great Panther Silver
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View from the Top

Pioneering Guanajuato Mining Activities

Sat, 10/28/2017 - 14:50

Q: To what does the company attribute its success, given its over 400 percent increase in operating earnings from mining?

A: Great Panther was extremely disciplined during the downturn. We managed to avoid significant staff redundancies and emerged from this cycle in an extremely strong position. One of the biggest contributing factors was the exchange rate. The fact that the peso is weaker relative to the dollar means our costs have gone down substantially relative to our revenues, which are dollar-denominated. We have also made some operational efficiencies at the mines. AISC declined by 20 percent, which can be attributed to a reduction in cash costs, in part because of the exchange rate but also because of the impact grade has on unit costs. We produced a record amount of gold last year and this is our main byproduct. Higher gold prices and significant gold production made a huge contribution to decreased cash costs and decreased AISC. We also reduced CAPEX. One of the strongest features of our company right now is our balance sheet. We have US$57 million in cash, US$67 million in working capital and no debt. This puts us in a very good position to invest in new projects or to make a strategic acquisition.

Q: What are your plans for the Guanajuato mine?

A: This mine equates to more than 75 percent of our production so it is very much our flagship project. The complex is made up of two mines: the main Guanajuato mine and the San Ignacio mine, which is a satellite operation located 22km outside the city. Right now, we are expanding the resource base at the San Ignacio mine and this is where we are seeing most of our expansion and benefiting from higher gold grades and higher levels of production.

Q: What progress is being made on the Topia mine given the fact that processing activities were halted in 2016?

A: We shut the plant down to conduct some upgrades at the processing plant and to change over the processing circuits from what used to be wet tailings to dry stack tailings. Environmentally, this is a more favorable option and the topography in the region means dry stack tailings is a better option for this project. It was a planned shutdown and will last for around three to four months until the project is completed. We continued operating the mines during this period and stockpiled the ore, meaning that when the plant comes back online, we can process the stockpiled ore to catch up on our yearly production guidance. This means that, although we lost production in December 2016, this will be added to 2017 totals, giving us 13 months of ore production this year.

Q: For 2018, what is the company’s main priority?

A: Aside from expanding into Peru, we want to expand the resource base we currently have and get Topia back up and running after its renovations. Right now, we are at the point where AISC and cash costs are close to the lowest they can get so now we need to make sure we can keep them at a similar level. AISC will increase slightly because we are investing US$3-4 million in the Topia tailing sfacility, undertaking more drilling activity and investing in operations to ensure continuity. In terms of regions we find attractive, we have evaluated projects throughout Mexico, mainly in central and northern Mexico, in states like Sonora, Chihuahua, Durango and Zacatecas. In the next five years, we would like to make another acquisition to inorganically continue to grow the company in Mexico. If we are able to expand the resource base at Guanajuato and San Ignacio, it is possible we will be able to consider expansion of the processing plant in Guanajuato.