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Great Panther Silver puts resource estimate for San Ignacio temporarily on hold

Published: 16:18 24 May 2011 BST

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Great Panther Silver (TSE:GPR)(AMEX:GPL) said Tuesday that it has decided to temporarily postpone the NI 43-101 compliant resource estimate for its San Ignacio mine property pending further drilling, as sampling returned inconsistent grades.

As diamond drilling results were compiled from the property, which is located in Guanajuato, central Mexico, steps to prepare a resource estimate were taken, including a "Quality Assurance" control procedure, under which drill core from select samples was assayed to compare to the original results.

During this process, it was observed that there was no consistent correlation between the original and check assays, the company said.

"While we are puzzled by the inconsistent assays at San Ignacio, we have identified the issue early on in the exploration program," said president and CEO Robert Archer.

"Extreme grade variation is not uncommon in mining and it requires a greater level of sampling detail.

"Through an increase in check assays and the twinning of certain holes, we will be able to increase our database and understanding of the grade distribution."

So far, only about 10% of the samples taken from the holes have been subjected to the check program.

Great Panther said that it remains clear that significant silver-gold mineralization exists at San Ignacio, and that it will continue to delineate these zones to establish an NI 43-101 compliant resource at the site, with more rigourous logging and sample collection protocols now in place.

CEO Archer explained that in hindsight, the company “jumped the gun” in anticipating a resource by the second quarter based on only a dozen or so holes, which were drilled anywhere from 50 metres to 150 metres apart – a rather large spread. “More data points and a lot more information is necessary,” he added.

However, Archer confirmed that plans to drill 24,000 metres at San Ignacio this year are continuing as planned. The company is waiting on permits for its next phase of drilling, at which point a second drill rig is due to come on site.

The inconsistent samples in question from San Ignacio were originally processed at the SGS-operated laboratory at the Guanajuato mine site, and check assaying was completed at the ALS Chemex in Vancouver, B.C.  Any lab errors were ruled out, Great Panther said in a release on Tuesday.

Trace element testing and mineralogical studies are also currently being conducted in an attempt to identify any differences between sample sets. According to the company statement, the use of larger diameter core is also being considered in order to increase the sample size.

Any further results from San Ignacio will not be released until the check program is complete.

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