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Great Panther Silver Limited

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Great Panther Silver Reports Annual Net Profit of $5 Million

Mar. 16, 2011 (Marketwire Canada) --

VANCOUVER, BRITISH COLUMBIA -- GREAT PANTHER SILVER LIMITED (TSX:GPR)(NYSE Amex:GPL) (the "Company") is pleased to announce the audited financial results for the Company's year ending December 31, 2010. The full version of the financial statements and the management discussion and analysis can be viewed on the Company's web site at www.greatpanther.com or on SEDAR at www.sedar.com. To view the Company's Annual Report on Form 20-F which includes the Company's audited financial statements for the year ended December 31, 2010, please click on the following link http://sec.gov/edgar.shtml.

"Great Panther continued to achieve record revenue and earnings from mining operations in the fourth quarter of 2010, up 40% and 60% respectively, over 2009," said Kaare Foy, Executive Chairman. "In addition, 2010 marks a significant milestone for the Company as we report our first year of net income."


Change from Change from
Fourth Fourth Full Year Full Year
Highlights Quarter 2010 Quarter 2009 2010 2009
Revenue $ 13.8 million Up 40% $ 42.2 million Up 33%
Earnings from mining operations (1) $ 6.8 million Up 60% $ 18.7 million Up 63%
Net income $ 0.8 million Dow n 25% $ 5.0 million Up 673%
Earnings per share - basic and diluted $ 0.01 no change $ 0.04 Up 500%
Silver ounces produced (excluding equivalent 385,022 Dow n 1% 1,534,958 Up 5%
ounces of gold, zinc and lead)
Silver equivalent produced (2) 565,660 Dow n 9% 2,255,801 Up 2%
Silver payable ounces 369,940 Up 2% 1,428,758 Up 4%
Total cash cost per silver ounce (3) $ 8.41 Up 75% $ 7.43 Up 33%
Average revenue per silver ounce sold $ 28.01 Up 59% $ 21.26 Up 42%
  • 33% increase in mineral sales revenues to $42.2 million for the year ended December 31, 2010 from $31.7 million for 2009.
  • 40% increase in mineral sales revenues to $13.8 million for the three months ended December 31, 2010 from $9.9 million for the same period in 2009.
  • 63% increase in earnings from mining operations to $18.7 million for the year ended December 31, 2010 from $11.5 million for the same period in 2009.
  • 60% increase in earnings from mining operations to $6.8 million for the three months ended December 31, 2010 from $4.2 million for the same period in 2009.
  • 212% increase in cash flows from operations to $4.2 million for the year ended December 31, 2010 from $1.4 million in 2009.
  • $5.8 million increase in net income to $5.0 million for the year ended December 31, 2010 from a net loss of $0.9 million for 2009.
  • Record annual metal production of 2,255,802 silver equivalent ounces ("Ag eq oz"), up 2% from 2,202,456 Ag eq oz in 2009.
  • Record silver production of 1,534,957 silver ounces, up 5% from 1,456,830 in 2009.
  • Record metal recoveries of gold and silver at Guanajuato and silver, lead and zinc at Topia
  • 33% increase in cash cost per silver ounce, net of by-products, to US$7.43 in 2010 from US$5.58 in 2009. This increase in costs during 2010 was primarily due to lower than forecasted production, lower ore grades, higher smelting and refining charges and development costs at Guanajuato, and lower ore grades and higher mining costs at Topia.
  • 75% increase in cash cost per silver ounce, net of by-products, for the fourth quarter of 2010 to US$8.41 from US$4.80 for the fourth quarter of 2009 primarily due to lower than forecast production and ore grades, general inflation and higher power costs.
  • Updated NI 43-101 compliant mineral resource/reserve estimate for the Los Pozos, Santa Margarita, and Cata Clavo at the Guanajuato Mine. The new Measured and Indicated mineral resource contains 5,455,650 silver equivalent ounces. Inferred mineral resources are estimated at 2,676,924 Ag eq oz. The Measured and Indicated mineral resources include 4,372,000 Ag eq oz categorized as Proven and Probable mineral reserves, using a cut-off grade of 185 g/t silver equivalent.
  • A successful surface drilling program at the San Ignacio mine property in Guanajuato commenced during the third quarter of 2010 and is continuing throughout 2011. A $2.8 million budget has been approved for 2011 to drill approximately 24,000 metres and to prove up as many ounces as possible in the highly prospective San Ignacio area which has the potential to be a separate mine.


  • On February 8, 2011, the Company's shares were listed on NYSE Amex stock exchange in the United States under the trading symbol "GPL."
  • On February 16, 2011, Minera Mexicana El Rosario S.A. de C.V., Great Panther's Mexican subsidiary, was awarded its first distinction as a "Socially Responsible Company" for the year 2010 by CEMEFI, Centro Mexicano para la Filantropía (Mexican Centre for Philanthropy). This annual award is a milestone for the Company and has been awarded for its commitment to sustainable environmental, social and economic development.
  • Issued an update on March 7, 2011 to the ongoing mineral resource development at the Topia mine. The 2011 mineral resource estimate increased Measured and Indicated mineral resources to 7,440,000 silver equivalent ounces, a 36.3% increase over the 2009 resource estimate, and Inferred resources to 11,910,000 silver equivalent ounces, a 109.3% increase over the previous estimate.
  • On March 8, 2011, the Company paid off $4.05 million in two outstanding 8% unsecured convertible loan notes due on July 14, 2011 by the issuance of 1,800,000 fully paid common shares of the Company at the originally agreed upon conversion price of $2.25 per common share.


Great Panther's three-year strategy to accelerate production to 3.8 million Ag eq oz by 2012 is now commencing its second year. New equipment has been delivered to the mines, new production areas are being added, plant performance continues to excel, plant capacity is being increased, resources have been increased and reserves defined, and exploration drill programs have made significant new discoveries of high grade mineralization.

The combined production target for 2011 has been set at 2.87 million Ag eq oz, consisting of 1.94 million oz silver, 11,200 oz gold, 1,170 tonnes lead and 1,430 tonnes zinc. Silver equivalents for 2011 have been established using prices of US$1,200/oz Au, US$20/oz Ag, US$0.90/lb Pb and Zn.

Production from Guanajuato is planned to increase steadily throughout 2011 as output from the Los Pozos and Santa Margarita areas reach full capacity, Cata production returns to previous levels, and new production is added from the Guanajuatito area. Plant throughput is estimated to be 200,000 tonnes at grades of 240g/t silver and 1.80g/t gold for metal production of 1.38 million oz silver and 10,400 oz gold, equivalent to 2.0 million Ag eq oz.

Output from Topia is estimated to increase as new mine production is added as a result of development on existing and new veins and plant capacity is increased. Plant throughput is estimated to be 40,000 tonnes with metal production of 0.56 million oz silver, 800 oz gold, 1,170 tonnes lead and 1,430 tonnes zinc, equivalent to 0.87 million Ag eq oz.

No production from the new discoveries at the San Ignacio property is included in the 2011 target. However, as resources are estimated and mine plans are developed, it is anticipated that this project will positively impact the plans for 2012. Due to the proximity of San Ignacio to the Company's main operations at Guanajuato, any ore extracted during the development phase can be trucked to the plant for processing.

Diamond drilling in 2010, from both surface and underground, totaled 30,730 metres at Guanajuato, San Ignacio and Topia. Due to the success of this program in delineating new resources and making new discoveries, the drilling budget for 2011 has been more than doubled to over 60,000 metres, including at least 24,000 metres at San Ignacio, and 30,000 metres from underground at Guanajuato. This compares favourably with the 65,000 metres of diamond drilling originally proposed for the Company's overall three-year growth strategy.

Some highlights from the 2011 plan include:

Guanajuato Topia Consolidated
Tonnes milled 201,000 39,750 240,750
Silver ounces 1,376,000 562,700 1,938,700
Gold ounces 10,400 800 11,200
Lead tonnes - 1,170 1,170
Zinc tonnes - 1,430 1,430
Silver equivalent ounces 1,997,000 873,000 2,870,000
Silver head grades (grams/tonne) 240 490
Silver recoveries 88% 90%
Production costs per ounce US$5.00 - US$6.00 US$10.00 - US$12.50 US$6.50 - US$8.00

Operations produced 1,534,957 silver ounces and sold 1,428,758 ounces at a cash operating cost of US$7.43 per oz of silver, net of by-product credits, for the year 2010. As production increases over the next two years, unit costs will generally reduce due to efficiencies and the positive influence from higher gold production. Ranges in production costs are shown to allow for costs such as power, fuel and materials which are outside of our control and rising faster than average inflation. In addition, other costs, such as a portion of the smelting and refining costs, vary according to metal prices.

Cash flow generated from mining activities will be reinvested in operations for exploration and capital expenditures to increase resources and production. Surplus cash flow will be available for potential acquisitions as the Company continues to grow.

Both operations have demonstrated the ability to achieve higher silver production at a competitive cost per ounce and with a higher profit margin. The Company's emphasis will be on maintaining positive operating cash flow while developing and exploring to continually increase metal production. The Company's production strategy is to increase silver production by 20% year-on- year at continually decreasing unit costs.

"Great Panther delivered strong financial results during 2010, setting several new records," said Robert Archer, President & CEO. "As we move into the second year of our three-year growth strategy, we expect to achieve a significant increase in production to 2.9 million silver equivalent ounces which will allow us to capitalize on the current strong precious metals prices."

All shareholders have the ability to receive a hard copy of the Company's complete audited financial statements free of charge upon request. Should you wish to receive Great Panther Silver's Financial Statements or the Annual Report on Form 20-F in hard copy, please contact us at the Company toll free at 1-888-355-1766 or 604-608-1766, or e-mail info@greatpanther.com.


Robert A. Archer, President & CEO

Kaare G. Foy, Executive Chairman

This news release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) (together, "forward-looking statements"). Such forward-looking statements may include but are not limited to the Company's plans for production at its Guanajuato and Topia Mines in Mexico, exploring its other properties in Mexico, the overall economic potential of its properties, the availability of adequate financing and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by such forward-looking statements to be materially different. Such factors include, among others, risks and uncertainties relating to potential political risks involving the Company's operations in a foreign jurisdiction, uncertainty of production and cost estimates and the potential for unexpected costs and expenses, physical risks inherent in mining operations, currency fluctuations, fluctuations in the price of silver, gold and base metals, completion of economic evaluations, changes in project parameters as plans continue to be refined, the inability or failure to obtain adequate financing on a timely basis, and other risks and uncertainties, including those described in the Company's Annual Report on Form 20-F for the year ended December 31, 2010 and reports on Form 6-K filed with the Securities and Exchange Commission and available at www.sec.gov and Material Change Reports filed with the Canadian Securities Administrators and available at www.sedar.com.

(1) "Earnings from mining operations" is a non-GAAP measure and is defined as mineral sales less cost of sales and amortization and depletion.

(2) Silver equivalent ounces in 2010 were established using prices of US$1,000/oz Au, US$16/oz Ag, US$0.80/lb Pb and US$0.80/lb Zn.

(3) The non-GAAP measure of cash cost per ounce of silver is used by the Company to manage and evaluate operating performance at each of the Company's mines and is widely reported in the silver mining industry as a benchmark for performance, but does not have a standardized meaning.


CONSOLIDATED BALANCE SHEETS (Expressed in thousands of Canadian Dollars)

December 31, 2010 and 2009

2010 2009
Current assets:
Cash and cash equivalents $ 13,967 $ 13,312
Restricted cash 151 -
Marketable securities 200 23
Amounts receivable 9,635 5,539
Income taxes recoverable 239 342
Inventories 2,615 1,438
Prepaid expenses, deposits and advances 1,240 1,585
28,047 22,239
Mineral properties, plant and equipment 17,538 14,935
$ 45,585 $ 37,174
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 4,724 $ 2,658
Current portion of capital lease obligations 369 801
Current portion of promissory notes 373 122
Current portion of convertible loan notes 3,792 -
Current portion of future income tax liability - 506
Liabilities under derivative instruments 53 -
9,311 4,087
Long-term liabilities:
Capital lease obligations 128 63
Promissory notes 77 118
Convertible loan notes - 3,356
Asset retirement obligations 516 1,382
Future income tax liability - 1,312
10,032 10,318
Shareholders' equity:
Share capital 83,470 75,910
Contributed surplus 9,470 10,268
Equity component of convertible loan notes 1,563 1,563
Accumulated other comprehensive loss (3,058) (23)
Deficit (55,892) (60,862)
35,553 26,856
Nature of operations
Commitments and contingencies
Subsequent events
$ 45,585 $ 37,174



(Expressed in thousands of Canadian Dollars, except shares data)

Years ended December 31, 2010, 2009 and 2008

2010 2009 2008
Mineral sales $ 42,206 $ 31,732 $ 22,445
Cost of sales (21,161) (16,768) (18,144)
Amortization and depletion of mineral
properties, plant and equipment (2,362) (3,494) (4,183)
18,683 11,470 118
Amortization and depreciation 52 83 102
Accretion on asset retirement obligation 206 277 282
Mineral property exploration expenditures 7,110 1,582 6,328
General and administrative 5,858 5,803 5,965
Stock-based compensation 869 2,378 1,608
14,095 10,123 14,285
4,588 1,347 (14,167)
Income (expenses):
Interest income 116 59 241
Interest expense (934) (1,169) (1,155)
Debt settlement expense - (51) -
Foreign exchange gain (loss) (373) (383) 113
Gain (loss) on disposal of capital assets (16) (2) 31
Loss on derivative instruments (148) - -
(1,355) (1,546) (770)
Income (loss) before provision for income taxes 3,233 (199) (14,937)
Recovery of (provision for) income taxes 1,737 (668) 1,176
Income (loss) for the year 4,970 (867) (13,761)
Other comprehensive income (loss), net of tax:
Cumulative translation adjustment (3,025) - -
Unrealized gain (loss) on marketable securities (10) 15 (43)
Comprehensive income (loss) for the year $ 1,935 $ (852) $ (13,804)
Earnings (loss) per share
Basic $ 0.04 $ (0.01) $ (0.17)
Diluted $ 0.04 $ (0.01) $ (0.17)
Weighted average number of common shares
Basic 114,422,226 90,210,438 81,321,733
Diluted 118,932,620 90,210,438 81,321,733


CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in thousands of Canadian Dollars)

Years ended December 31, 2010, 2009 and 2008

2010 2009 2008
Cash flows provided by (used in) operating activities:
Income (loss) for the year $ 4,970 $ (867) $ (13,761)
Items not involving cash:
Amortization and depletion of mineral
properties, plant and equipment 2,414 3,577 4,285
Foreign exchange (gain) loss 51 (184) 135
Stock-based compensation 869 2,378 1,608
Shares issued for mineral exploration expenditures - - 191
Future income taxes (1,853) 603 (1,045)
Interest accretion on convertible loan notes 436 628 623
Debt settlement expense - 51 -
Accretion on asset retirement obligations 206 277 282
Write-down of inventory - - 241
Write-down of mineral properties 68 - -
Loss on derivative instruments 53 - -
Loss (gain) on disposal of capital assets 16 2 (31)
Other - (1) 25
7,230 6,464 (7,447)
Changes in non-cash operating working capital:
Amounts receivable (4,286) (1,801) 2,278
Inventories (1,086) (471) (358)
Prepaid expenses, deposits and advances 327 (1,090) 371
Accounts payable and accrued liabilities 1,926 (1,840) 1,960
Income taxes 104 89 (68)
Net cash provided by (used in) operating activities 4,215 1,351 (3,264)
Cash flows provided by (used in) investing activities:
Mineral properties, plant and equipment (8,036) (1,762) (1,928)
Proceeds from disposal of capital assets 37 5 101
Restricted cash (151) - -
Net cash used in investing activities (8,150) (1,757) (1,827)
Cash flows provided by (used in) financing activities:
Repayment of long-term debt - - (105)
Repayment of capital lease obligations (938) (364) (181)
Repayment of promissory note (292) (10) -
Proceeds from advances on share subscriptions - - 85
Proceeds from exercise of warrants 3,054 519 143
Proceeds from exercise of options 2,871 731 398
Issuance of shares for cash, net of issue costs (32) 12,288 -
Net cash provided by financing activities 4,663 13,164 340
728 12,758 (4,751)
Effect of exchange rate changes on cash and cash equivalents (73) (52) (1)
Increase (decrease) in cash and cash equivalents 655 12,706 (4,752)
Cash and cash equivalents, beginning of year 13,312 606 5,358
Cash and cash equivalents, end of year $ 13,967 $ 13,312 $ 606

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