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Great Panther Mining still expects 4Q production growth but cuts guidance for Tucano Gold Mine

Great Panther is lowering its 4Q guidance for the Brazilian mine to between 39,000 and 44,000 ounces of gold

Gold nuggets
Full-year guidance for Mexico has also been revised downward to between 40,000 and 45,000 gold equivalent ounces

Great Panther Mining Limited (NYSEAMERICAN:GPL) (CVE:GPR) still expects to deliver fourth-quarter production growth relative to the third quarter of 2019, although it has had to lower its production guidance for the Tucano Gold Mine in Brazil. 

In a statement, the company noted that, as previously reported, a geotechnical issue was discovered on Sunday, October 6 in the west wall of the Urucum Central South pit (UCS) at Tucano, one of the five pits scheduled for production in the fourth quarter and into next year.

READ: Great Panther Mining increases quarterly production from its Mexican and Brazilian operations

It said that there has since been deterioration to sections of the west wall of the pit, including failures along the lower southern portion of the west wall and cracks along the central section of the pit.

As a precautionary measure and following safety protocols, the pit and access roads were closed, an adjacent haul road was re-routed and stockpiles moved away from the pit, the group added.

As an additional safety precaution and with a view to returning the UCS pit to production, the company said it has initiated a full geotechnical review of UCS and all other pits including installing additional monitoring equipment.

Great Panther said a plan has also been initiated to re-sequence and accelerate production from the other pits, primarily the Urucum North and Urucum South pits.

The company pointed out that geotechnical analysis and mine planning for additional stripping and rehabilitation of UCS is ongoing to calculate any impact on Mineral Reserves and to determine when production at the UCS pit can be recommenced.

An update will be provided when the analysis is complete, no later than the first quarter of 2020 when an updated Mineral Reserve and Mineral Resource statement is published for the Tucano Gold Mine, the group added.

UCS represents approximately 150,000 ounces of the company’s Mineral Reserves that were scheduled for production mainly in 2021 and 2022.

Tucano guidance lowered

As a result of this event, Great Panther said it is lowering its fourth-quarter guidance for the Tucano Gold Mine to between 39,000 and 44,000 ounces of gold.

Full-year guidance for Mexico has also been revised downwards to between 40,000 and 45,000 gold equivalent ounces, it added.

The company said it is conducting further detailed analysis and will provide a timely announcement of any further changes in guidance.

James Bannantine, President & CEO of Great Panther said: "Based on this updated guidance we are still projecting to deliver growth in production relative to the third quarter of 2019.”

“Our first priority is to take all necessary steps to ensure the safety of our employees and contractors at the Tucano Gold Mine while working diligently to minimize the impact to short-term and medium-term production," he added.

Great Panther operates three mines including the Tucano Gold Mine in Amapá State, Brazil, and two primary silver mines in Mexico - the Guanajuato Mine Complex and the Topia Mine.

It also owns the Coricancha Mine in Peru and, having executed a successful bulk sample mining program in accordance with the May 2018 PEA for the project restart, the company is establishing the conditions under which a restart of production can be implemented.

Contact the author at [email protected]

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Price: 0.84 CAD

Market: TSX
Market Cap: $296.22 m

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