Silver Mining

Sean Brodrick takes a closer look at silver production and mining. Mr. Brodrick examines the silver production company, Great Panther and how it's developing a world class mine.

Guanajuato, Mexico is a city that was founded on silver. A large silver vein found in the 16th Century sparked a silver rush. As the number of miners grew, the mines became larger and the mountains of ore became mountains of silver.

When the conquistadors ruled Mexico, Guanajuato's biggest mine was Valenciana. It was one of the richest silver finds in all of history, and there were other lucrative mines in the area as well. In the 18th Century, the Guanajuato Mining District alone accounted for 30% of the world's total silver production. Over a billion ounces of silver were hauled out of the Guanajuato Mining District's hard rock during its peak.

Great Panther, a silver production company, picked purchased mining properties in Guanajuato very cheaply some years back, when silver was near its nadir and the mines had been run into the ground by the co-op that owned it. Despite pumping out all those riches over the centuries, Valenciana still contains plenty of silver, though it is not in production right now.

These mines are along the main Veta Madre (Mother Lode) structure that trends northwest-southeast through the district for at least 16 miles. Great Panther has found a really rich vein with bonanza grade samples.

Great Panther is not only trying to develop a world-class mine, they're trying to do it smarter. The tonnage of rock put through the mill dropped to 40,393 in the first quarter from 45,773 in the fourth quarter, but that's because Great Panther's mining engineers purposely avoided rock that would bring down the grade and raise their cost-per-ounce. At the same time, the average gold grade increased from 0.86 grams per tonne (g/t) to 1.40 g/t while the silver grade increased from 113 g/t to 188 g/t. This resulted in a 65% increase in the silver equivalent grade from 156 g/t to 258 g/t. Along with improvements at the mill, the higher grades helped the company produced 1,369 ounces of gold and 198,663 ounces of silver in the first quarter, 45% and 56% higher than in the previous quarter.

Guanajuato is the centerpiece of Great Panther's mining operations. It is also operating the Topia Mining project and has earmarked another project (Mapimi) for fast-track development as an open-pit mine.

However, much of the work that Great Panther is doing is still exploratory. Some of the projects it is working on may be economically feasible, or they may not. Also, while its cash cost per ounce is going down at Guanajuato, costs went up slightly at Topia. While overall cash operating cost per silver ounce decreased by 17% from 11.14 in 2007 to $9.20 in the first quarter of 2008, there are other silver miners with much lower cash costs," warns Brodrick.

"Bottom Line: While I don't think Great Panther is a near-term payoff, it may be worth tucking in your portfolio and forgetting about for awhile. Of course, that depends on your individual investment profile and your appetite for risk and reward. Never forget that this is a speculative mining stock," he continues.

To read this issue online, please visit:

http://www.moneyandmarkets.com/Issues.aspxSilver-Vein-Discovered-in-Mexico-1827

About SEAN BRODRICK & MONEY AND MARKETS

Sean Brodrick joined Weiss Research in 2000 as an analyst, bringing more than 25 years experience as a journalist and financial analyst to the position. He is Weiss Research's small-caps specialist, especially in natural resources, and is the editor of the company's Red-Hot Canadian Small-Caps, as well as a regular contributor to its daily e-letter, Money and Markets.

Previously, Mr. Brodrick was the investment director of The Sovereign Society, the world's leading publisher of offshore asset protection strategies and global investment opportunities.

Recognized for his expertise on Canadian and Australian investment opportunities, Mr. Brodrick has been featured on many financial talk shows, including CNBC Squawk Box and Bloomberg Market Line. He is a weekly guest on Market Matters Radio, a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada's premiere financial websites, HoweStreet.com. His report, "70 Days to Empty," has garnered acclaim for its analysis of the forces pushing America toward its next oil crisis and was described by

The Daily Reckoning as "the most important report you're likely to read this year," while his knowledge of uranium has helped investors earn solid gains on the commodity.

Mr. Brodrick holds a B.A. degree from the University of Maine.

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.

↑ Grab this Headline Animator

This article has been robotically scanned and tagged by Prnewsnow with the following search tags. No human manipulation of these tags take place.
| Justo | Justo Almario | 14th encuentro nacional |

4939 readers online...

, Local News

Subscribe in a reader