Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
South Korea Coronavirus Outbreak Data Analysis Warning Rate of Infection is Exponential! - 26th Feb 20
Gold Price Long-term Trend Analysis Forecast 2020 - 26th Feb 20
Fake Markets Are on Collision Course with Reality - 26th Feb 20
Microsoft is Crushing the S&P 500, Secret Trait Of Stocks That Soar 1,000%+ - 26th Feb 20
Europe's Best Ski Resorts For The Ultimate Adventure - 26th Feb 20
Samsung Galaxy S20+ vs Galaxy S10+ Which One to Buy? - 26th Feb 20
Gold Is Taking on $1,700 amid Rising Coronavirus Fears - 26th Feb 20
Is This What Falling Through the Floor Looks Like in Stocks? - 26th Feb 20
Gold Minsky Moment Coming - 26th Feb 20
Why Every Student Should Study Economics - 26th Feb 20
Stock Market Correction Over? - 26th Feb 20
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Mining In Mexico with Great Panther Resources, GPR:TSX

Commodities / Metals & Mining Jul 20, 2009 - 03:56 PM GMT

By: Richard_Mills

Commodities

Best Financial Markets Analysis ArticleIn 1992 mining laws were changed in anticipation of the North American Free Trade Agreement (NAFTA). The new laws allowed 100 percent foreign ownership of Mexican mines (except for hydrocarbons, radioactive materials and salt).


Under the Mexican Constitution the exploration, exploitation and beneficiation of the minerals will have preference over any other use for the land. Exploration concessions are granted for six years and are not renewable. There are no limits for the mining concession surfaces. Production concessions are awarded for 50 years and are renewable for a similar period.

In 1994 the North American Free Trade Agreement was implemented and the Peso was devalued. Because of low metal prices and a devalued Peso many walked away from toiling in the earth, shutting down their mines and finding new livelihoods.

But in the late ‘90’s a new era was beginning as Canadian miners quietly began to accumulate projects.

Great Panther Res. GPR:TSX

Great Panther is primarily a silver producer with two 100% owned operating mines in Mexico. The centerpiece of the Company's operations is the world class Guanajuato Silver-Gold Mine in the state of Guanajuato.

Great Panther also owns and operates the Topia Silver-Lead-Zinc Mine in Durango State.  The Company has increased production to a new all time high and is growing the resource base through continued surface drilling and underground development.

The Mapimi project is an advanced stage exploration project with a global resource of 28.6 million silver equivalent ounces that appears amenable to open pit mining.

Great Panther is one of the fastest growing silver producers in the industry - 313,000 oz in 2006 to 1.21 million oz in 2008. The company is strongly leveraged to future rises in the price of silver.
Free cash flow should show sustained quarter over quarter improvements and this should continue through 2009 and into 2010.

FIRST QUARTER HIGHLIGHTS

  • 75% increase in earnings from mining operations (before amortization and depletion) to $2.6 million in the first quarter 2009 from $1.5 million for the fourth quarter 2008.
  • Net cash provided by operating activities of $0.7 million in the first quarter 2009 compared to $0.3 million used in operating activities in the first quarter 2008.
  • 11% increase in total quarterly production to 480,267 silver equivalent ounces (Ag eq oz) in the first quarter 2009 from 431,639 Ag eq oz in the first quarter 2008.
  • 6% and 14% increase in revenues for the three months ended March 31, 2009 to $6.3 million compared to $5.9 million for the three months ended March 31, 2008 and $5.5 million for the three months ended December 31, 2008, respectively.
  • 29% decrease in overall cash operating cost per silver ounce (net of by-product credits) to US$6.49 for the first quarter 2009 from US$9.20 for the first quarter 2008.
  • Positive adjusted EBITDA(1) of $1.0 million for the three months ended March 31, 2009 compared with adjusted EBITDA loss of $1.4 million for the three months ended March 31, 2008.
  • Re-opened eight mines at Topia in late January 2009 which had been closed during the fourth quarter 2008.
  • Successfully negotiated more favourable terms for spot sales of Topia's lead concentrate to Asian smelters.
  • Underground drilling and mine development at Topia and Guanajuato proved the continuity of high grade mineralization.

GPR recently released its second quarter production results and these numbers generated a huge sigh of relief among investors. Total metal production reached a new record, they negotiated a new lower cost concentrate sales contracts for Topia and have their first NI 43-101 compliant 5 million Ag eq oz resource for the Guanajuato Deep Cata Clavo zone.
This is definitely a company being steered in the right direction, here’s the second quarter production numbers:

  • Total metal production of 499,845 Ag eq oz, a 15% increase from Q2 2008 and a new record.
  • Total silver production of 333,358 Ag oz, a 16% increase from Q2 2008.
  • Guanajuato metal production of 327,295 Ag eq oz, a 19% increase from Q2 2008.
  • Guanajuato silver production of 220,742 Ag oz, a 9% increase from Q2 2008.
  • Guanajuato metallurgical recovery of gold, at 84.6%, a quarterly record.
  • Guanajuato concentrate quality, at 15,126 g/t Ag and 94.5 g/t Au, a record high.
  • Topia metal production of 172,550 Ag eq oz, a 7% increase from Q2 2008.
  • Topia silver production of 112,616 Ag oz, a record high and a 32% increase from Q2 2008.
  • Topia metallurgical recoveries of silver and zinc, at highs of 88.8% and 87.3% respectively.
  • New, lower cost, concentrate sales contracts for Topia.
  • First, NI 43-101 compliant, 5 million Ag eq oz, resource for Guanajuato Deep Cata Clavo zone.

Investing in Silver itself, through ETF’s, has become the main driver of silver’s bull market. In this author’s opinion the most leverage to silver’s price rise is gained from investing in one, or a few, primary silver producers. Great Panther appears well-positioned to leverage silver’s gains and to greatly reward investors over the course of this bull market.
Great Panther is going to continue to grow and is going to be one of the largest silver producers in Mexico. If you’re an investor looking at the PM’s, in particular silver, then as strongly leveraged to future rises in the price of silver as GPR is, it definitely warrants your further DD.

Share Structure as of Tue Jun 2, 2009

Shares Issued: 86,789,521  
Warrants: 2,552,500  
Finder Warrants: 169,050  
Executive and Employee Options: 6,332,700  (GPR has a policy of granting EVERY employee, not just officers and directors, stock options. These options cover every employee from the President to company secretaries working in Mexico).
Consultant's Options: 1,120,000  
Fully Diluted: 96,963,771

Treasury

Currently, the treasury has a little over $2 million. Great Panther management has been able to keep ahead of costs and a financing is not contemplated at this time.
As of March 31, convertible notes total $6 million: $2 million is due in 2010 and $4 million in 2011. 

If you're interested in the junior resource market and would like to learn more please come and visit us at www.aheadoftheherd.com

    By Richard (Rick) Mills

    www.aheadoftheherd.com

    rick@aheadoftheherd.com

    Copyright © 2009 Richard (Rick) Mills - All Rights Reserved

    Legal Notice / Disclaimer: This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules