Great Panther Mining Limited (TSE:GPR) (NYSEAMERICAN:GPL) is putting its Coricancha polymetallic mine into production, the company announced Monday.
Coricancha is a gold-silver-lead-zinc-copper underground mine and mill complex in Peru, 90 kilometres east of the capital Lima.
The former producing mine is expected to reach full scale production in less than a year.
Vancouver-based Great Panther said in a statement that the decision was made based upon the final results of a bulk sampling program that confirmed the operating assumptions outlined in the Preliminary Economic Assessment (PEA) in May 2018.
"We are pleased with the results of the BSP and look forward to advancing Coricancha towards commercial production,” said Great Panther CEO James Bannantine.
According to the miner, the actual restart date is expected in the first half of 2020 and will be aligned with its other mining operations to ensure the project has the necessary planning and resources in place to optimize operations and profitability.
Bannantine said that Coricancha is expected to produce approximately 40,000 gold equivalent ounces annually and will be an “important addition” to Great Panther's production portfolio going forward.
The PEA assumes using standard cut-and-fill mining techniques providing ore to support a target annual throughput rate of 550 tons per day to the mill.
Using base case metal prices, including gold at US$1,300 per ounce and silver at US$16.50 an ounce, Great Panther said the mine was estimated to generate an after-tax net present value of US$16.6 million and an after-tax internal rate of return of 81%.
All-in sustaining costs were estimated by the report to be US$2.20 per payable silver ounce, or US$547 per payable gold ounce, over the life of the mine.
The mine plan envisages 608,053 tons being processed over a life of mine of 3.75 years, with 193,500 tons of annual average throughput.
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As part of the bulk sampling program, nearly 5,000 tons of mineralized material mined from two veins were processed through the plant. The program produced over 15,500 ounces of silver, 303 ounces of gold, 107,319 pounds of lead and nearly 100,000 pounds of zinc.
Great Panther told shareholders that it identified a number of opportunities to enhance the overall economics of Coricancha and increase the life of the mine by incorporating additional resources not included in the PEA.
The company will keep Coricancha on care and maintenance while additional engineering and operational planning is completed to further de-risk the project.
Shares of Great Panther added nearly 1% in Toronto at C$1.04 and 2% in New York at US$0.80.
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