Great Panther Mining is feeling bullish about its Brazil prospects, and is planning to expand operations at its primary mine while expanding exploration to promising areas which border it.

Great Panther is pushing ahead at full steam at its already producing Tucano mine, determined to increase its production further. Tucano accounts for approximately 85% of the company's revenue, Great Panther chief executive Rob Henderson said. Great Panther acquired the mine from Beadell Resources in 2019.

"Tucano will become both an open pit and an underground mine next year," Henderson said.

The ore level of the underground mine is only 100 meters below, so the amount of development required to kick off activities at the underground level is minimal.

"It would require a pretty short time frame," he said. Great Panther has earmarked USD$9 million for mine development in 2022. Construction of the portal is expected to begin in the last quarter of 2022, Henderson said.

"The idea is that we would run the open pit and the underground simultaneously," Henderson said. "The open pit produces 100,000 ounces a year, and we think we can ramp up to 150,000 by adding the underground mine."

Drilling has indicated that Great Panther can expect the grade in the first few years of underground production to be above 5 g/t . Production from the underground mine is expected to begin in 2023, Henderson said.

The key focus will be on conveying more ore to the processing plant, the Great Panther chief executive said.

Mining operations will also be restarted in the UCS pit in the second half of 2022, with production expected in 2023 after the unstable wall pit is rectified and additional remediation work is completed.

Great Panther is also focusing on another pit at Tucano, TAP AB, where stripping is currently focused. This pit, which accounts for 40% of Tucano's reserves, will account for most of the mine's production in the second half of 2022. The second half will account for at least 65% of annual production guidance for 2022, the company said

Tucano's plant is a significant asset, and the conventional mill can process 10,000 tonnes per day.

"The Tucano processing plant started out as a heap leach plant," Henderson said. "We purchased the asset, spent over C$100 million putting in upgrades to the process plant, and it's working very well.

"We have recoveries at about 90%," he added. "We don't need to do anything to the plant, but we do need to secure the additional ore from the underground."

Great Panther also installed an oxygen plant in 2019 to process sulphide materials, with recoveries of sulphide ores now reaching over 90%.

Strong rebound from last year's  setback

2021 may have been a challenging year for Great Panther Mining, but this hasn't dampened the company's plans for future expansion in gold production.

Production for 2021 declined to 105,006 gold ounces, down from 2020's 150,051 ounces. The Tucano mine accounts for the majority of production, producing 79,348 gold ounces, compared to 125,417 gold ounces year-on-year.

The company produced 1.2 million silver ounces, a slight increase from 1.1 million ounces in 2020.

The production declines are largely due to structural problems at Brazilian mine Tucano.

The instability of a wall pit in the UCS open pit scuppered any possibility of increasing yearly production in 2021.

"The pit wall was not stable," chief executive Rob Henderson said. "We have radar detectors, similar to the ones operating on highways, with accurate measurements of the pit wall's movements. When it moves, it's not safe to be down there."

Great Panther spent a lot of money attempting to fix the issue, and has made considerable progress.

"We know why it's moving, we know it's fixable," Henderson said.

The other complicating factor which limited production at Tucano was supply chain issues which hindered their mining contractor.

"The equipment of the first contractor required spares which needed to be brought into Brazil," Henderson said. "There were supply chain issues, but it was exaggerated by the aging nature of the fleet."

Maintenance requirements for mining equipment typically go up as they get older, Henderson added.

Great Panther has hired a second contractor to work alongside the first contractor, which is able to source materials from Brazil which will resolve the procurement issue, Henderson said.

Brazil exploration

Great Panther believes there is significant opportunities yet to be found in the land surrounding its Tucano mine, which is located in the Amapa state of Brazil.

The land has been of interest to gold mining companies for many years, Henderson said.

"That area has been known for gold for a long time," Henderson said. "When Tucano started up in 2005, BHP and Anglo were both looking at the region, and were very interested in the greenstone district geology, which has all the right signatures for gold mines."

Great Panther has a tenement package there which measures 90 kilometres by 20 kilometres. "It's a massive area of land," Henderson said. "We've only really explored around the Tucano mine - in an area roughly 7 kilometres by 1 kilometre. We haven't even touched 5% of the area."

Henderson is confident that Great Panther will be able to find another large gold mine in this tenement package, if not two.

Exploration of this tenement package will be a major focus in the coming year, he added.

"We're investing into exploration efforts in the region, and have already identified four or five high-priority targets," he said.

Last year, Great Panther identified a 16-kilometer-long elevated gold trend. In 2022, the company will prioritise targets on this trend using multi-element geochemistry as well as ground magnetics, to eventually map for drilling.

Great Panther is particularly focusing on targets which will be easier to access, Henderson said.

"The ones we're fast-tracking are in truckable distance," he said. "We have a footprint that's working well, and we're working to ensure the future of Tucano."

The open pit mine's proven mineral reserves estimate contains 1.69 billion tonnes at 1.61 g/t of gold for 87,000 ounces, while probable resources amount to 3.88 billion tonnes at 1.70 g/t of gold for 212,000 gold ounces.

The underground mine contains proven mineral reserves of 189 million tonnes at 3.78 g/t of gold for 23,000 ounces of gold, and probable mineral reserves of 1.98 billion tonnes at 4.17 g/t of gold for 265,000 ounces.

At Tucano's Urucum North underground project, Great Panther kicked off a drilling program to upgrade the resource estimate. This drill program is expected to be completed by the end of March.

Work will continue at Great Panther's other properties, Henderson said.

Great Panther owns the Topia silver-gold-lead-zinc mine and the silver-gold Guanajuato mine complex in Mexico, as well as the Coricancha gold-silver-lead-zinc-copper mine project in Peru.

"In Mexico, Topia is running along quite nicely and pretty consistently," Henderson said. "It doesn't need a lot of capitalisation, and the veins are very predictable."

At the Guanajuato Mine Complex, the tailings storage facility will need to be expanded.

"We have run out of [storage] capacity in our tailings, and we have applied for a lift on that," Henderson said.

Great Panther has run into some delays with permitting.

"When we ran out of capacity, we had to suspend operations," he said. "We're engaging with the permitting authorities, have submitted our application, and we do expect a reply."

Great Panther is very pleased to be focused on its mining opportunities in Brazil, Henderson said.

"I think Brazil has huge potential, it has very good infrastructure," he said. "There are good mining universities, and we could hire a lot of Brazilian talent, with no need to put in foreign advisors. Tucano is run by Brazilians," he said.

"Permitting is taking more time and money these days, but Brazil is not alone in this," he said. "But the bottom line is that this is a country that understands mining."