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Great Panther cuts FY'19 gold guidance on Tucano safety concerns

Great Panther Mining Ltd. slashed its gold equivalent production guidance for 2019 to a range of 150,000 ounces to 160,000 ounces, from 171,500 ounces to 185,000 ounces, following geotechnical issues at the Tucano gold mine in Brazil.

The company decreased its fourth-quarter guidance for Tucano to between 39,000 ounces and 44,000 ounces, putting the mine's annual guidance at 110,000 ounces to 115,000 ounces from 125,000 ounces to 135,000 ounces. The company also reduced guidance for its Mexican operations at 40,000 ounces to 45,000 ounces from 46,500 ounces to 50,000 ounces previously.

The company said Oct. 15 that it closed Tucano's Urucum Central South pit, one of the five pits scheduled for production in the fourth quarter, due to the deterioration of the pit's west wall. It added that it launched a full geotechnical review of all the pits.

A geotechnical analysis and mine planning are ongoing to calculate the impact on mineral reserves and determine when production can be resumed. An updated resource estimate is scheduled for release in the first quarter of 2020. Urucum Central South represents about 150,000 ounces of reserves that were scheduled for production in 2021 and 2022.

"There has ... been deterioration to sections of the west wall of the pit, including failures along the lower southern portion of the west wall and cracks along the central section of the pit," the company said.

As a result, Great Panther now plans to accelerate production from other pits, primarily the Urucum North and South pits.

The company acquired Tucano through its 2018 takeover of Beadell Resources Ltd.