VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 2, 2005) - GREAT PANTHER RESOURCES LIMITED (TSX VENTURE:GPR) is pleased to provide additional details on the proposed acquisition, announced July 20, 2005, of a 100% interest in a group of producing silver-gold mines in Guanajuato, Mexico. The Guanajuato District is one of the most prolific and best known silver districts in the world with silver being discovered in 1548 and estimates of historic production ranging from 700 million to 1.5 billion ounces of silver and 4 to 7 million ounces of gold. During the 18th century, the district was reportedly "producing one-third of the world's silver".
The three principal mines in Great Panther's proposed acquisition, the Valenciana, Cata and Rayas, are situated on the main Veta Madre (Mother Lode) structure that trends northwest-southeast through the district for at least 25 kilometres. The Valenciana Mine was once said to be "the richest silver mine in the world". Bonanza-style mineralization in the Veta Madre structure in this historic mine is still being extracted and is often considered as "direct shipping ore" (to the smelter) as the grades exceed those of the concentrates produced from average ore in the flotation plant.
Elsewhere in the mine complex, silver-gold mineralization is also found in quartz veins parallel to the Veta Madre and as large stockwork bodies on both sides of the structure. The stockworks can reach widths of 30 metres or more and locally exceed 100 metres in strike length and down-dip extent allowing for bulk tonnage underground mining methods to be used. One such body, in the Rayas Mine, has been mined continuously since its discovery in the early 1970's.
The main claim block covers more than 3.5 kilometres of strike length along the Veta Madre and contains 25 shafts, 4 winzes (internal shafts) and more than a hundred kilometres of underground workings. The main shaft at each of the aforementioned mines is currently operational with ore being hoisted up the central Cata shaft where the plant that services the mines (1,200 tonnes per day capacity) is located. A fourth mine, San Ignacio, located in the La Luz district, only a few kilometres away, is presently closed but will be re-evaluated for it's potential to support a new mining campaign.
Great Panther will be buying the mines from a mining cooperative, formed in 1939 when labour unrest resulted in the mines being turned over to the workers. As is the case with many Mexican mines, the operation has had little working capital in recent years and no holes have been drilled since 2000, with the result that there are no defined ore reserves, no systematic mine plan in place, and the plant is currently operating at about 20% capacity. Drill holes from the 1980's and 1990's, however, indicate that the mineralization continues to depth under the existing workings. In addition, there is significant potential to block out new resources on the existing levels with a comprehensive drilling and sampling program. Great Panther's management believes that with such a program in place, a new and substantial resource base could be established such that the mines could be brought back into full production.
The total purchase price for the proposed acquisition is US$7,250,000 which includes 1,100 hectares in 2 main properties, the 1,200 tonne per day plant, workshops and administration facilities, complete mining infrastructure, mining equipment, and certain surface rights (real estate). Upon signing the Letter of Intent, the Company paid US$125,000 to the Vendors and, upon completion of a formal inventory (in approximately 30 days), will pay an additional US$75,000. It is anticipated that the Formal Purchase Agreement will be signed within about 3 months, at which time, the Company will initiate a series of payments for the balance of the purchase. The acquisition is subject to the completion of satisfactory due diligence, the receipt of a positive NI 43-101 technical report (both underway), satisfactory financing, and acceptance for filing by the TSX Venture Exchange.
Through this proposed acquisition, Great Panther Resources Limited will be continuing its aggressive growth strategy focused on the exploration and development of silver and gold projects in Mexico. The Company is preparing to place the Topia Silver Mine, in Durango State, back into production and is exploring the Virimoa Gold Project in Durango and San Antonio Gold-Copper Project in Chihuahua.
ON BEHALF OF THE BOARD
Robert A. Archer, President and CEO
SEC 20-F Statement Filed
Standard & Poor's Listed
FOR FURTHER INFORMATION PLEASE CONTACT:
Great Panther Resources Limited
(604) 685-9744 (FAX)