TORONTO (miningweekly.com) – Vancouver-based Great Panther Resources produced 499 845 silver-equivalent ounces from its two Mexican mines in the second quarter, a new record for the company and an increase of 15% compared with the same period a year ago.

Output at the Guanajuato mine rose 19% year-on-year, to 327 295 silver-equivalent ounces, while the Topia mine produced 172 550 oz of silver equivalent, up 7% from the second quarter of 2008.

Guanajuato produced 220 742 oz of silver and 1 379 oz of gold, from milling 32 607 t of ore.

Metal recoveries from the operation averaged 84,6% for gold and 83% for silver, compared with 78,3% and 84% respectively in the same quarter last year.

The quality of concentrate produced for sale was a record high of 94,5g/t gold and 15 126 g/t silver.

At the Topia mine, output rose to 112 616 oz of silver, 125 oz of gold, 513 338 lb of lead and 594 677 lb of zinc, from milling 7 837 t of ore.

The company also reported that it has signed new long-term sales contracts for concentrates produced at Topia with Louis Dreyfus Commodities Metals Suisse.

“The new terms represent a significant unit cost saving for Topia,” Great Panther said on Tuesday.

The company said it remains on track to meet or exceed its production target of 2,07-million silver-equivalent ounces for 2009.

“Costs are being controlled and the improved concentrate sales contracts for Topia facilitate lower unit costs and higher profitability,” the miner said.

The combined unit costs for the two mines are estimated to be in the range of $6,00/oz to $6,50/oz of silver, net of by-products for the year.

Shares in the company jumped 10,87% on Tuesday, to C$0,51 apiece by 15:38 in Toronto.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.