The Gold Report - Tue, Oct 18, 2016

Production at Guanajuato and a Strong Balance Sheet Bolster Great Panther's Q3 Numbers

Production numbers were lower than expected for Q3/16, but analysts following Great Panther Silver remain buoyed both by the company's financial strength and silver output from its Guanajuato Mine Complex.

Great Panther Project Map
Great Panther Project Map

In an Oct. 13 research report on Great Panther Silver Ltd. (GPR:TSX; GPL:NYSE.MKT), Bhakti Pavani of Euro Pacific Capital wrote, "The silver recovery at GMC [Guanajuato Mine Complex] improved and returned to the historical levels primarily due to an increase in silver grade and an improvement in metallurgical procedures."

"The company's exploration program has successfully increased mineral resource estimate at both GMC and San Ignacio," Pavani added, noting that San Ignacio, a "satellite mine located in GMC has consistently delivered higher grades and recoveries," will be "the focus of development for the company in the near term."

While Great Panther reported recoveries at GMC that were mostly in line with analysts' expectations, a decrease in production at the Topia mine, which both Pavani and Heiko Ihle of Rodman & Renshaw commented on, "was mainly attributed to the two temporary plant shutdowns during the quarter," according to the company's Oct. 12 press release. "In addition, Q3 production was challenged by narrower veins, which increased dilution and decreased grade."

"While Q3/16 production results were negatively impacted by two temporary shutdowns and lower grades, we feel it is important to maintain a long-term perspective," wrote Ihle in an Oct. 13 research report. "To this end, management has executed on its goal of reducing costs in 2016, while positioning the firm well to meet its year-end production guidance of 4.0-4.2 million silver equivalent ounces."

Rodman & Renshaw also continues to "like the firm's strong balance sheet, with an estimated pro forma cash position of over $45 million and no debt," Ihle wrote. "Given this, we expect the firm to evaluate opportunities to expand its existing portfolio of producing assets in the near term, and think 2017 could serve as a transformational year for Great Panther assuming an acquisition is made."

Vancouver-based Great Panther operates two mines in Mexico, Guanajuato and Topia. In addition to silver, the company also produces gold, zinc and lead.

1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Great Panther Silver Ltd. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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