In a Dec. 21 research note, Euro Pacific Capital analyst Bhakti Pavani reported that Great Panther Silver Limited (GPR:TSX; GPL:NYSE.MKT) released an updated mineral resource estimate for its Coricancha mine, which it had acquired from Nyrstar in June 2017. "We believe the overall mineral resource update at Coricancha is positive," Pavani commented.
In the updated version, the Measured and Indicated (M&I) resource totals 752,759 tons. The M&I silver equivalent is higher, having increased to 24.2 million ounces from 21.96, Pavani highlighted. However, Inferred silver equivalent are lower, having decreased to ~0.9 million tons from 4.9, primarily due to the difference in methodologies used to calculate the resource.
Most noteworthy about the estimate, Pavani noted, is the metal grades "are comparatively higher than" those in the previous estimate. Comparison of the grades in the newly calculated resource to those initially determined showed 200 versus 174.6 grams per ton (200 vs. 174.6 g/t) gold, 5.8 vs. 5.04 g/t silver, 2.06 vs. 1.97% lead, 3.26 vs. 3.11% zinc and 0.53 vs. 0.42% copper, respectively.
For the resource update, Great Panther used the results from its own drilling of 33 diamond holes, (~6,000 meters) on the property along with the data Nyrstar had amassed and used in the historical resource in 2012.
The miner aims to complete and announce the results of optimization and technical studies on Coricancha by Q2/18, Pavani reported, with production likely starting there sometime in 2020. Euro Pacific believes Great Panther has sufficient cash to advance the project to that point.
Euro Pacific has increased its valuation on Coricancha to $85 million from $74 million based on the updated, NI-43-101-compliant resource estimate and "assuming the recovery of 80% of the M&I resource and 64% of the Inferred resource," Pavani explained.
Regarding an update at the company's Topia mine, Pavani indicated that in a "significantly positive development," Great Panther now holds all of the required permits to build and run the new phase 2 tailings storage facility there, and plans to start construction immediately. The analyst added that the company has "sufficient capacity remaining at phase 1 to allow uninterrupted mining operations at the Topia mine and expects a seamless transition to deposition at [the] phase 2 tailings storage facility."
Euro Pacific has a Buy rating and a CA$2.90 per share target price on Great Panther Silver, whose stock is currently trading at around CA$1.70 per share.
Source: Streetwise Reports