Great Panther Silver Limited is a Canadian company focused on silver production in Mexico and currently owns two mines, with the possibility of acquiring a third.
Robert Archer, President and CEO of Great Panther Silver at the Cambridge House Vancouver World Resource Investment Conference
According to Robert Archer, President and CEO of Great Panther Silver, “I'm an exploration geologist by training and have spent years working for major mining companies. I got tired of big company politics and got into the junior sector about fifteen years ago.” Once he'd been out for a while, Archer decided to start his own company. He said, “In 2002, I decided I'd like to start up a new company and so we started looking for projects in Mexico with my Mexican partner, who is a mining engineer. We wanted to get into production quickly and then use cash flow to build the company rather than always going back to the markets. That was the initial business model for the company that became Great Panther Silver.” That business model led to multiple acquisitions. Said Archer, “We acquired our first mine in 2004-2005 and the second one in 2005. They are both in production and we are growing our resources.”
Great Panther Silver has an aggressive plan to grow their production and resource base. Archer said, “We produced 2.2 million ounces of silver equivalents in 2010 from both mines combined. This year, in 2011, we are looking at doing almost 2.9 million ounces of silver equivalent and next year over three million ounces.” Great Panther Silver's goals don't stop there. Said Archer, “Our goal is to get our resource base up to 40 million ounces by 2012 and we already have 27 million, so we are well on our way.”
Great Panther Silver is increasing their resource base through an aggressive drilling program. Said Archer, “We currently have a 60,000 meter drill program going on at both mines. A lot of drilling going on this year.” With that drive to increase their resource, the mine life at each of their mines is growing practically daily. Originally thought to be a zero year mine life, their first mine is projected to proceed for the next fifteen years and their second, for eight years.
During the mining, Great Panther Silver does some of their own processing, but not to the stage where they are actually refining silver. Archer said, “We process our own ore. We don't refine our own silver. We just produce concentrates and then we sell our concentrates to metal traders and they basically pay us for the metal content.” Though they don't refine silver at this time, Archer hasn't ruled it out for the future. He said, “We're looking at the economics of refining. We don't want to be locked in to sell our concentrate to one group or another.” But the cost of actually refining their own silver has caused the Great Panther Silver team to take a hard look. Archer said, “It would likely cost several millions of dollars to build our own refinery. It's something we are looking at, but we haven't decided yet. It will depend upon the economics.”
For investors that are looking for an opportunity in the silver market, Archer believes that Great Panther Silver has a lot to offer. He said, “The Company has lots of upside. We are growing our production and our reserve.” The two main mines that Great Panther Silver holds are not their only projects. Said Archer, “We have a development project underway as well at San Ignacio. We're also looking at acquisitions to add a third mine to the portfolio, so there is certainly a lot of upside.” Archer said that the upside is dependent on the price of silver, though, and that investors would have to be prepared for the volatility that the silver market is currently enduring. Said Archer, “We've seen in the last eight months or so how the company's share price responds to changes in the price of silver. For anyone who believes that silver is going up in the long term, and if they can stomach all the volatility, then there is lots of upside.”
Not only does Great Panther Silver have the benefit of being part of a high-demand silver market, but the company is stable. According to Archer, Great Panther Silver is financially in a good position. “We are cash flow positive. We have almost $40 million dollars in the bank and we're going to be around for a long time. For a long term investment with a lot of upside, we are in good shape,” he said. Their capex budget for this year is $24 million and all of their activities are being paid for out of cash flow. Given where the silver price is right now, Archer believes that the company is relatively fairly valued. “It comes back to what you think the future for silver is,” he said. Currently, silver is trading at approximately $37 an ounce. Great Panther Silver is prone to following the silver price as their share price was $0.75 last summer and recently went to $5.00 shortly after they listed on the NYSE Amex.
Great Panther Silver is focused on the future. Archer said, “We're always looking at other things, whether it is an individual project or a corporate acquisition. Mexico is still our favorite jurisdiction. We are production focused, So we are looking for something in an advanced stage of exploration or that is close to our existing operations or has potential for production.” All of these reasons, plus the fact that Great Panther Silver is focused on production in a high-demand market may be excellent reasons for Great Panther Silver to be positive about their future.
On July 18th GREAT PANTHER SILVER LIMITED (TSX: GPR; NYSE Amex: GPL; the "Company") announced ” the acquisition of four mining concessions, totaling 1,514 hectares, approximately 10-15 kilometres northeast of Guanajuato, Mexico (see maps on Great Panther Silver's website). The claims are located on the north-west extension of a system of multiple northwest-southeastern trending parallel structures that could be part of the "La Sierra" vein system. The La Sierra system is the most easterly of the three structural systems in the prolific Guanajuato district along with the main Veta Madre and the La Luz trends. Presently the Company is mining on the Veta Madre system at its Guanajuato Mine and exploring on the westerly La Luz system at the San Ignacio project.
There are numerous past producing mines along the La Sierra system, including AuRico Gold's currently operating El Cubo mine, with 620,000 gold equivalent ounces in reserves (AuRico Gold Inc. website). Several old mines, some with multiple levels, are evident on the newly-acquired concessions, collectively called the Santa Rosa Project, but no production records exist.”
For more information:
http://www.greatpanther.com
Great Panther Silver Limited
Suite 2100
1177 W. Hastings St.
Vancouver, BC
Canada V6E 2K3
Telephone: 604-608-1766
Toll Free: 1-888-355-1766
Facsimile: 604-608-1744
Email: info@greatpanther.com