Great Panther Silver (TSE:GPR) (NYSEMKT:GPL) has signed a two-year option agreement with Belgium’s Nyrstar (EBR:NYR), the world’s largest zinc producer, with a view to acquiring the Coricancha mine, located some 90 km. east of the Peruvian capital Lima in the prolific Central Polymetallic Belt, in the Andes.
The property comprises more than 3,700 hectares in the prolific and production at the mine dates back to 1906. It contains 13.5 million silver equivalent ounces (Ag.eq.oz.) in Proven and Probable Reserves, 21.96 million Ag.eq.oz in Measured and Indicated Resources and 124.6 million Ag.eq.oz in Inferred Resources.
Coricancha features gold-silver-lead-zinc-copper mineralization (about 80% gold and silver) occurs as massive sulphide veins that have been mined underground by cut and fill methods.
Great Panther will pay US$1.5 million for the option, with the possibility of extending it another year for the same amount of money, the company said Tuesday.
But the Canadian group has the right to buy the mine for US$5 million at any time during the duration of the two-year option period.
Coricancha has been closed since August 2013 and has fully permitted and operational 600 tonne per day flotation and BIOX(R) bio-leach plants along with supporting mining infrastructure.
"Coricancha represents a near-term production opportunity and the two-year option will allow us to gain comfort with the project without having to make an immediate and significant financial commitment in the current environment of low metal prices and depressed market conditions. We intend to commence surface drilling as soon as possible, focused on defining and expanding zones of higher grade mineralization, followed by underground drilling, development, and start-up evaluations," said Great Panther’s President and CEO, Robert Archer.
The historical Mineral Reserve and Resource Estimate includes Proven and Probable Reserves of 0.64 million tonnes at a grade of 4.35 grams per tonne (g/t) gold, 149.12g/t silver, 0.32% copper, 1.77% lead and 2.60% zinc.
Measured and Indicated Resources are 0.89 million tonnes at a grade of 5.04g/t gold, 174.62g/t silver, 0.42% copper, 1.97% lead and 3.11% zinc while Inferred Resource are 4.88 million tonnes at a grade of 4.91g/t gold, 224.54g/t silver, 0.48% copper, 1.57% lead and 2.98% zinc.
Great Panther considers this estimate as historical in nature and Great Panther will verify the historical estimate through surface and underground drilling and sampling.
Great Panther has proven its expertise in taking exploration assets through to production in Mexico; last month the silver producer bolstered the mineral resource estimate at its new San Ignacio satellite mine, which forms part of its Guanajuato Mine Complex. It increased indicated resources by more than 30 percent, and more than doubled inferred resources.
The company recently posted 57% higher revenues and net income of C$3.6 million in for the first quarter of 2015, compared to a net loss of C$0.6 million in the same period of 2014.