Led by Robert (Bob) Archer, a seasoned geologist and explorationist, the Vancouver-based Company has implemented a sound strategy for success since its reorganization in late 2003. This new focus offers investors the best of both worlds. The recent reactivation of the Company's Topia Mine is sure to steadily build considerable intrinsic value in the Company's share price. Meanwhile, the Company's commitment to developing existing silver-gold ore bodies while also hunting for new ones offers plenty of “blue sky” potential. Indeed, this finely calibrated risk/reward formula should ensure a very bright future for Great Panther.

 

Meanwhile, the centerpiece of Great Panther’s portfolio of projects is the newly rehabilitated, high-grade silver-lead-zinc Topia Mine, which comes complete with a mill and other mining infrastructure in Durango State. The Company has a 100% interest in the Topia Mine Property, which comprises a total of 6,482 hectares, including the mine itself. Notably, most of this land package has never been exposed to modern exploration methodology. And with a focus on targeting high-grade veins in hillside stopes (tunnels), the initial production is being achieved on a far more cost-effective basis than sinking shafts.

 

Significantly, this mine also boasts an untouched mineral inventory that could exceed several million ounces of silver, alone. (This resource has not been confirmed or quantified and is not yet compliant with the relatively new National Policy 43-101 guidelines —– a Canadian federal government recognized standard of a “measured resource”). However, there is no uncertainty about past mining grades which are impressive, to say the least. Reliable and comprehensive mining records attest to 437 grams per tonne (g/t) of silver, 0.87 g/t of gold and 3.0% lead and 4.2% zinc. Great Panther can also look forward to exceedingly high recovery rates of over 85% for all but the gold (which historically has averaged 55%).

 

Another compelling dynamic that weighs in Great Panther’s favour is the opportunity to generate near-term cash flow from the reprocessing of existing tailings. An estimated 2.25 million ounces of silver and 13,000 ounces of gold are waiting to be fed into the on-site mill, which could be producing concentrate as early as mid summer. And the ore’s overall value also benefits from the additional base metal credits. All told, this inferred resource offers one million tonnes with an average silver grade of 70 g/t, as well as 0.4 g/t of gold, 0.3% lead and 0.7% zinc. Importantly, this ready supply of cash flow offers the Company the opportunity to defray on-going exploration costs at the mine site and elsewhere.  

 

By way of background, the mine was formerly owned by Industrias Penoles, Mexico’s largest silver producer. Over the span of three and a half decades (1952-1989), Penoles processed in excess of 15 million ounces of silver, 18,500 ounces of gold, 48,000 tonnes of lead and 44,500 tonnes of zinc. Though far from mined-out, this lucrative deposit eventually became the flashpoint for a bitter labour dispute. Peñoles, however, refused to set a precedent by conceding to the flexing of union muscle. So the mine was sold to a former mine manager. And Peñoles just walked away.

 

The mine was subsequently worked on a small-scale for 10 years by this much smaller company. But silver prices were at cyclical lows at the time. And the mine’s mineral inventory was only partly depleted by the time that its cash-strapped owners wound-down operations in 1999. Significantly, however, the mineral inventory that had already been outlined for extraction by Peñoles still remains largely untouched.

 

Again, this potential resource is not National Policy 43-101 compliant. However, Great Panther is confident that most of it can be brought up to current reporting standards and proven to be much larger. Indeed, the unforeseen departure of Peñoles meant that the mine’s scope for expansion was never properly delineated. This is where Bob Archer sees a great opportunity for Great Panther.

 

Thus, the Company purchased the mine and surrounding property for $2.57 million dollars, much of which can be made in staggered payments. It can even be generated from production revenues —– which fortuitously negates any need to dilute the Company’s exploration budget or share structure.

 

Now newly reactivated, the mine’s mill is capable of producing at a rate of 200 tonnes per day, translating into about three quarter of a million ounces of silver per year. And with a modest expenditure for upgrades, production capacity could conceivably be doubled. 

 

By way of background, the mine sits at the heart of a mineral-rich mining district where an estimated 30 million-plus ounces of silver have been produced, dating as far back as 1538. Much of this silver has been unearthed at near-surface, small-scale operations using primitive mining technology. In fact, the region still offers considerable largely-untapped potential as much of it has yet to be exposed to sophisticated, modern mineral exploration know-how.

 

Accordingly, Great Panther’s management believes that this mining camp is ripe for the discovery and development of large polymetallic deposits. All told, the district could host up to a further 30 million ounces of silver, Archer suggests.

 

Meanwhile, the Company has now completed a 7,000-metre drill program to better define a mineable resource to re-start the Topia Mine.  The 30-hole program, conducted in 2004/2005, has provided further evidence of the continuity of silver-lead-zinc vein systems at the first five zones targeted on the property.  However, since the multiple veins represent many kilometres of strike length, the 30 drill holes have as yet only tested a small portion of the Topia Property.

 

Overall, the recent drill program has nonetheless provided the Company with sufficient confidence that the veins have excellent continuity. Furthermore, they returned ore grades that are consistent with the mining grades reported by Peñoles —– and over comparable mining widths.

 

Much of the drilling focused on the strike extensions of the three principal veins that have historically been the most productive. Notably, these individual veins have demonstrated strike lengths exceeding four kilometres and vertical extents of up to 300 metres. They include the Veta Madre vein. Appropriately named “the Mother Lode”, this rich vein still offers considerable luster to this day. Last year’s drill highlights include 534g/t of silver, 4.5% of lead and 5.6% of zinc over 0.6 metres in one hole, and 462g/t of silver, 1.7% of lead and 0.26% of zinc over 1.3 metres in another.

 

The Company also followed up on a 1988 step-out drill hole completed by Penoles. This exploratory hole assayed an attention-grabbing 0.23 metres of 315 g/t silver and 7.5 g/t gold along the western extension of the Veta Madre —– more than 200 metres along strike from the nearest mine workings. Management believes that this one hole (that Peñoles never had an opportunity to follow-up on) corroborates other exploration data suggesting an increase in gold grades to the west of the main ore body. Notably, a number of rich veins are demonstrated to be “open” (continuous) in that direction.

 

Accordingly, five holes were drilled to test this theory in a zone known as Las Trancas.  Great Panther is now seeing preliminary evidence that the Company is correct in its assessment. The most significant intersections encountered assayed at 315g/t of silver, 2.1% of lead and of 4.4% zinc over 1.9 metres. This includes “bonanza grade” highlights of 2,570g/t of silver, 18.1% of lead and of 16.8% zinc over 0.15 metres. Also from the same hole, impressive values of 537g/t of silver, 1.75g/t of gold, 9.7% of lead and 2.5% of zinc over 0.25 metres were reported. All told, these drill results suggest that there still remains considerable scope for the expansion of the mine’s main ore body on its western flank and with a potential overall improvement in grades, particularly for the gold.

 

Elsewhere at the mine site, at the El Rosario Zone, assays from only one of four holes drilled in 2004 has been reported so far but results are very encouraging. They include 301g/t of silver, 0.74% of lead and 2.06% of zinc over 2.1 metres. One intersect ran as high as 1,070g/t of silver, 2.79% of lead and 8.06% of zinc over 0.5 metres. The El Rosario vein system lies approximately two kilometres southeast of the main underground workings and has seen only minor underground development. The Company believes that there is significant potential to build a resource here. Additional drilling was conducted in January 2005 but results are not yet available.

  
The continued success of in-fill and exploratory drilling at the Topia Mine will be no surprise to SmallCapMedia. This is especially due to the fact that Great Panther has assembled a wealth of data from past mining records, drill results and historic estimates to build a high-tech geological model of the deposit and its vicinity. This invaluable database should give the Company a major competitive edge in its efforts to better outline the deposit’s overall potential, while also identifying the mine’s highest concentrations of silver. To this end, Great Panther’s management is therefore cautiously confident of the prospect of building up an inferred base resource of 10 million ounces of silver with the potential to at least double this figure over time.   

 

Several hundred kilometres further north, the Company is also zeroing-in on a major gold-copper prospect in the shape of the San Antonio Property in the well-known Guadalupe y Calvo Mining District in southwest Chihuahua State. A telling testament to the district’s potential is an estimated historical production from the small-scale mining of high-grade veins of between 1.2 million ounces of gold and 8 million ounces of silver to 2 million ounces of gold and 28 million ounces of silver. Regardless of how accurate these estimates may be, the fact remains that the region is still relatively virgin territory for the discovery and development of large (or significant?) gold deposits.

 

Great Panther views this scenario as an exciting challenge. And the aggressive development of the San Antonio Project is the Company’s way of rising to the occasion. Indeed, it covers 12,310 hectares and contains a large mineralizing system consisting of high-grade gold veins and stockwork mineralization with bulk tonnage potential. The property has recently been expanded by 2,219 hectares following the discovery of high-grade silver mineralization near its northwest corner. Remarkably, none of this expansive land holding has ever been exposed to modern exploration methods. Neither has it even been drilled.

 

Ongoing fieldwork has also revealed that high-grade mineralization at San Antonio is contained within a mineralized belt that extends for at least 17 kilometres along strike, up to 6 kilometres in width and several hundred metres in vertical extent, most of which lies on Great Panther's property. Moreover, at least a dozen predominantly high-grade gold-copper veins are evidence of the intensity of the mineralization, especially in the core project area. Some veins have been historically mined near surface on a small scale in just one zone that covers a two-kilometer wide area. Many other veins have never been touched. 

 

Among the most prospective targets is the Sary Vein which has returned bonanza chip and channel sample values of up to 31.7g/t of gold and 2.97% of copper over 0.9 metres. Detailed sampling of the Santo Niño Vein also assayed 7.75g/t of gold over an average width of 3.03 metres and a strike length of 25 metres.

 

Adding to the dynamics in favor of the project’s economics is the fact that between most of the veins lies an extensive stockwork zone (small veinlets) that the Company believes has significant bulk tonnage potential. Accordingly, Great Panther initiated a drill program in February of this year to test targets outlined during last year’s exploration season.

 

A total of 2,000 metres of drilling spanning approximately 20 holes will initially focus on testing the continuity of high grade gold-copper vein systems, particularly in the central part of the property.  Meanwhile, mapping and sampling is continuing in the new high-grade silver zone in the northwest corner of the property with the goals of better understanding the nature of the mineralization and generating additional drill targets.

 

In short, during the 1995 exploration year, management expects to demonstrate the potential for the San Antonio Property to host a deposit containing at least a million ounces of gold and an equally impressive copper resource.

 

The Company can earn a 100% interest in the project’s four core claims by making staged cash payments over three years totaling US$1,130,000 with no net smelter royalty and no work commitments.

 

Earlier this year, Great Panther also signed a Letter of Intent for an option to acquire a 100% interest in the Virimoa Gold Property located in the Topia Mining District of Durango, Mexico. The project consists of two concessions spanning 148 hectares and hosts an extensive zone of gold-zinc mineralization that is exposed for more than 350 metres.

 

Continuous surface chip sampling over 250 metres of this zone has returned values averaging 1.08 g/t of gold, 20.5 g/t of silver and 1.66% zinc. This includes a higher grade section of 3.38 g/t of gold, 26.2 g/t of silver and 4.93% zinc over 16 metres. With this size and grade as a starting point and no previous drilling, the Company considers the property to have excellent potential to host a large bulk tonnage gold deposit.

 

The Company is already gearing up to explore the property by way of detailed surface mapping and geophysical surveying. Drilling of the most prospective anomalies and known mineralized structures is expected to get underway as soon as drilling is completed at the San Antonio Property, which is likely to be within several weeks.

In the eventuality that drilling at Virimoa outlines the existence of a potentially economic mineral resource, the project benefits considerably from the nearby presence of the Topia Mine and its mill, about 17 kilometres to the northeast. Further evidence of the geologically fertile nature of the mining camp that hosts both the Topia Mine and the Virimoa Property is illustrated by the nearby presence of several other major deposits.

 

It is also worth noting that all three of Great Panther’s projects sit at the heart of the famous 1,200 kilometre-long Sierra Madre Mineral Belt —– a vast golden corridor where numerous prolific gold and silver discoveries have been worked for over 400 years.  Famous for its Aztec gold, the mineral-rich Cordilleran belt clearly attests to Mexico’s undisputed status as the world’s largest producer of silver. It is also home to many of the highest-grade silver mines in the world —– most of which have succeeded without the benefit of sophisticated mining technology.

 

On a corporate note, the company is presided over by Bob Archer. With nearly a quarter of a century’s experience  with major mining companies and juniors, alike, he has worked extensively all over North America. It is this depth of experience that has led him to Mexico —– where he sees the greatest opportunities.

 

Mexico is a politically stable, emerging economy with a longstanding pro-mining business culture. Additionally, the reform of Mexico’s mining laws and legislation in recent years has been very well received by the international mining community. This has set the stage for the systematic exploration of large geologically fertile districts by well-financed exploration companies. Many of these major districts, until recently covered by a bewildering patchwork of claims, have now been consolidated. This has finally presented the opportunity to utilize district-scale exploration techniques for the first time —– and on an economically feasible basis.

 

Such a reality —– matched with the smart and innovative application of other modern exploration technology —– should herald the discovery of more than a few significant precious metals deposits. Accordingly, Bob Archer is using his past exploration experience in Mexico to strategically position Great Panther to capitalize on such golden opportunities.

 

Archer is also mindful of the “big picture” in which he foresees a continued resurgence in precious metals prices, especially in silver. The grey metal’s flirtation in 2004 with US $8 an ounce and its current buoyancy above the $7 range is due to demand clearly outstripping supply in recent years. Much of this burgeoning market for silver is now being driven by both consumer and industrial demand from China.  Archer believes that this economic backdrop will allow Great Panther to become a “force to be reckoned with” in Mexico’s mining community.

 

From a technical perspective, the Company has a relatively tight share structure with approximately 23.54 million shares outstanding (33.23 million fully diluted). Such a scenario, matched with positive news flow, typically acts as a catalyst to higher share price valuations. Furthermore, the milestone reactivation of the Topia Mine gives Great Panther considerable leverage to an emerging cyclical bull market for silver. And the Company’s two highly prospective gold properties offer investors considerable exposure to million-ounce-plus discoveries.

 

With the recent completion of a Cdn. $5.56 million financing, the Company also has an impressive war chest to aggressively pursue its mandate to become one of the world's leading primary silver producers. Accordingly, SmallCapMedia believes that there are numerous compelling dynamics converging to precipitate a sustained uptrend for the Company’s share price for the balance of 2005 and beyond. Hence, Great Panther’s share price is not expected to remain so undervalued for much longer.