Mining In Mexico with Great Panther

By: Richard Mills | Mon, Jul 20, 2009
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In 1992 mining laws were changed in anticipation of the North American Free Trade Agreement (NAFTA). The new laws allowed 100 percent foreign ownership of Mexican mines (except for hydrocarbons, radioactive materials and salt).

Under the Mexican Constitution the exploration, exploitation and beneficiation of the minerals will have preference over any other use for the land. Exploration concessions are granted for six years and are not renewable. There are no limits for the mining concession surfaces. Production concessions are awarded for 50 years and are renewable for a similar period.

In 1994 the North American Free Trade Agreement was implemented and the Peso was devalued. Because of low metal prices and a devalued Peso many walked away from toiling in the earth, shutting down their mines and finding new livelihoods.

But in the late '90's a new era was beginning as Canadian miners quietly began to accumulate projects.

Great Panther Res. GPR:TSX

Great Panther is primarily a silver producer with two 100% owned operating mines in Mexico. The centerpiece of the Company's operations is the world class Guanajuato Silver-Gold Mine in the state of Guanajuato.

Great Panther also owns and operates the Topia Silver-Lead-Zinc Mine in Durango State. The Company has increased production to a new all time high and is growing the resource base through continued surface drilling and underground development.

The Mapimi project is an advanced stage exploration project with a global resource of 28.6 million silver equivalent ounces that appears amenable to open pit mining.

Great Panther is one of the fastest growing silver producers in the industry - 313,000 oz in 2006 to 1.21 million oz in 2008. The company is strongly leveraged to future rises in the price of silver.

Free cash flow should show sustained quarter over quarter improvements and this should continue through 2009 and into 2010.


GPR recently released its second quarter production results and these numbers generated a huge sigh of relief among investors. Total metal production reached a new record, they negotiated a new lower cost concentrate sales contracts for Topia and have their first NI 43-101 compliant 5 million Ag eq oz resource for the Guanajuato Deep Cata Clavo zone.

This is definitely a company being steered in the right direction, here's the second quarter production numbers:

Investing in Silver itself, through ETF's, has become the main driver of silver's bull market. In this author's opinion the most leverage to silver's price rise is gained from investing in one, or a few, primary silver producers. Great Panther appears well-positioned to leverage silver's gains and to greatly reward investors over the course of this bull market.

Great Panther is going to continue to grow and is going to be one of the largest silver producers in Mexico. If you're an investor looking at the PM's, in particular silver, then as strongly leveraged to future rises in the price of silver as GPR is, it definitely warrants your further DD.

Share Structure as of Tue Jun 2, 2009

Shares Issued: 86,789,521
Warrants: 2,552,500
Finder Warrants: 169,050
Executive and Employee Options: 6,332,700 (GPR has a policy of granting EVERY employee, not just officers and directors, stock options. These options cover every employee from the President to company secretaries working in Mexico).
Consultant's Options: 1,120,000
Fully Diluted: 96,963,771


Currently, the treasury has a little over $2 million. Great Panther management has been able to keep ahead of costs and a financing is not contemplated at this time.

As of March 31, convertible notes total $6 million: $2 million is due in 2010 and $4 million in 2011.

If you're interested in the junior resource market and would like to learn more please come and visit us at.

Disclosure: Great Panther Res. GPR:TSX is an advertiser on



Richard Mills

Author: Richard Mills

Richard (Rick) Mills

Richard Mills

Richard lives with his family on a 160 acre ranch in northern British Columbia. He invests in the resource and biotechnology/pharmaceutical sectors and is the owner of His articles have been published on over 400 websites, including:, WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Beforeitsnews, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire, Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks, SeekingAlpha, BusinessInsider, and the Association of Mining Analysts.

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