News from Great Panther Silver Limited (TSE:GPR) is likely to come in two forms over the coming weeks or months.
The first will be the updates from the company’s two Mexican mines, Guanajuato and Topia, where things are running pretty much as normal.
“At Guanajuato,” says chief executive Bob Archer, “it’s steady as she goes. We’re going through an area of slightly lower grade, which will impact a little bit in the third quarter, but we’re progressing.”
And mining has now resumed at Topia after a brief hiatus that followed the death of the company’s mine manager, in an incident off-site and unrelated to Great Panther’s operations.
It seemed prudent to allow the new mine manager a little bedding in time, but that’s now done and the re-start almost a month in the past.
The target for this year is for production of between 4 mln and 4.2 mln ounces of silver equivalent across both projects, at an all-in sustaining cost of between US$12.00 and US$14.00 per ounce.
Sustaining costs are thus set to be higher than the first half as a new tailings dam is under construction at Topia, but with silver bobbing around at the US$20 mark for some months now, margins should be pretty comfortable.
So that’s the first form of news – operational progress, operating cashflow, and operating profits.
The second form is a lot more speculative.
But it’s no secret that Great Panther has been on the hunt for deals for some time now, and a huge fundraising undertaken over the summer was widely supported with this proposition very much to the fore.
“A big part of our focus is on the acquisitions front,” says Archer. “We’re still working on the Coricancha project in Peru although it’s difficult to say much because there are confidentiality agreements in place.”
Great Panther signed a two-year option on Coricancha back in May of 2015 but hasn’t said too much about it since. The project is a former producer, and was billed at the time as a near-term re-start opportunity, having only gone on care and maintenance in 2013.
And when the time came for the second US$1.5 mln option payment to be made over, in May of this year, the option was officially allowed to lapse. But even then, the company said that it was still evaluating the project.
And Archer’s mention of it again, some months on, shows that there’s still clearly something there for Great Panther if the right deal can be struck.
But that’s not the only iron in the fire for Archer.
Coricancha was already a known quantity when the company went out and raised just shy of US$30 mln in a bought deal in July.
“The financing in the summer was taking advantage of the run up in silver prices to give us a better balance sheet and to give us more flexibility when it comes to acquisitions,” says Archer. “It’s always better to take the money when it’s offered.”
Given that the company was already sitting on a sizeable cashpile before the financing was put together, Great Panther now has quite some warchest at its disposal.
But Archer’s clear that in the type of transaction he’s looking to undertake cash will be king. “Many of the things we’re looking at are not public and so we can’t really do share-for-share transactions,” he says, although at that point he also mentions that, although Nyrstar is public, it is divesting all its mining assets.
But after all, there could be more than one type of deal on the go with more than one type of company.
“We want to make sure that we have enough cash to make acquisitions,” continues Archer. “It’s conceivable that we could do one or two, or even three, if the price is right.”