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Great Panther Mining, Ltd. (NYSEMKT:GPL)
Q1 2019 Earnings Call
May 16, 2017, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Thank you for standing by. This is the conference operator. Welcome to Great Panther Mining's First Quarter 2019 Financial Results Conference Call and Webcast. As a reminder, all participants are in listen-only mode, and the conference is being recorded.

After the presentation there will be an opportunity to ask questions. To join the question queue, you may press * then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing * and 0.

I would now like to turn the conference over to Alex Heath, Director of Corporate Development and Investor Relations. Please go ahead.

Alex Heath -- Director of Corporate Development and Investor Relations

Thank you, Arielle. Good morning, everyone, and thank you for taking the time to participate in our call today. With me here this morning are James Bannantine, President and CEO, and Jim Zadra, Chief Financial Officer.

Before we begin, I'd like to mention that some of the commentary on today's call contains forward looking statements. You should be cautioned that actual results and future events may differ from those noted in today's presentation. The commentary also refers to various non-GAAP measures, definitions, and reconciliations that are included the company's MBNA for the quarter ended March 31, 2019. All dollar amounts expressed in this presentation and the associated financial statements and MBNA are in US dollars unless otherwise noted.

I'd like to remind everyone that this conference call is being recorded and will be available for replay later today. Replay information on the presentation slides accompanying this conference call and webcast will be available on our website at greatpanther.com.

I will now turn the call over to Great Panther's President and CEO, James Bannantine.

James Bannantine -- President and Chief Executive Officer

Thank you, Alex. Good morning, everyone. On our call today, I'll start with highlights of the first quarter, then follow with an overview of our operational and financial results, discuss our outlook for 2019, and conclude with a question and answer session.

The highlight of the first quarter was us closing the acquisition of Beadell Resources, Ltd. This acquisition has transformed Great Panther into an intermediate precious metals producer, focused on leading mining jurisdictions across Latin America. Our portfolio is well-diversified in terms of asset types, with three producing mines, an advanced stage growth project, and significant exploration potential.

As announced on Tuesday this past week, we've now commissioned the supplemental oxygen system at Tucano, which is performing well. Through to the middle of the May, the Tucano plant processed an average of 1.75 grams per ton of gold, with gold recoveries at 94.5%. By comparison, April in the first quarter was limited to processing material at just under 1 gram per ton, and recoveries were down at 88%. We expect Tucano to produce between 125,000 and 135,000 ounces of gold, effective March 5 onwards to the end of 2019.

At Coricancha, we're in the final processing stage of our bulk sample program, or BSP, and expect to announce results in the restart decision in late June.

At Topia in Mexico, we're advancing the process plant expansion project. During the first quarter, we announced an increase resource estimate, which increased measured and indicated resources by 28%. Production also increased 16% compared to the same quarter in 2018.

With the acquisition of Tucano, gold is now our primary metal produced by value. For the quarter, consolidated gold equivalent ounce production was up by 7%. Our updated consolidated production guidance for 2019 to account for acquisition of Tucano on March 5, 2019, is 171,500 ounces to 185,000 gold equivalent ounces. Based on our 2019 guidance, we expect gold production to account for approximately 83% of our metal production by value.

At Tucano, our reported production of 14,000 -- excuse me -- our reported production 14,860 gold equivalent ounces for the first quarter only includes Tucano gold production from March 5, the date of acquisition. For the 26 day period, Tucano produced 5,164 ounces.

Production at Tucano has been limited to processing lower-grade oxide material due to the lack of sufficient oxygen as we continue to turn around the operation. With limited grade of oxides under 1 gram per ton, this lowered our production and raised our all-in sustaining cost for the first quarter and for the year-to-date versus what we expect the rest of the year and for future years. However, as announced earlier this week, the supplemental oxygen system was commissioned by the end of April, and we've been able to process higher grade sulfide ore with excellent recoveries upwards of 94% since the beginning of May.

I previously noted that in the first half of May, Tucano produced an average grade of 1.75 grams per ton, and we've successfully run the plant with grades over 2 grams per ton at those same recoveries. With the implementation of the supplemental oxygen, the final phase of the Tucano plant optimization is now complete, and the mine can be operated in a manner that maximizes grade.

Through a continuous improvement program going forward and having looked at the operation in detail since taking ownership, we believe there is opportunity to significantly reduce all-in sustaining costs further over the midterm. Tucano's production guidance for 2019 from March 5 onwards is between 125,000 to 135,000 gold ounces. It's worth noting the significant seasonal trend of the production at Tucano with a rainy and a dry season with 70% of the year's production guidance planned for the last two quarters of the remaining three quarters. This also includes a very low month for the month of April.

Moving on to Peru, at our Coricancha project we've completed the mining phase of our bulk sample program and have moved on to processing phase. We just recently started to process the approximately 4,200 tons of stockpile material generated during the mining phase. We successfully completed trucking the mine material to the plant via surface roads to avoid a blocked main ore path to the plant and, as previously mentioned, are now processing that material. We expect to announce the result of the processing, the completion of the bulk sample program, and be in a position to make a decision on a restart at Coricancha in late June this year.

Moving on to Mexico, although the company's primary metal produced by value is now gold as a result of the acquisition of Tucano, we'll continue to use and report cost metrics for payable silver ounce to manage and evaluate operating performance at our Mexican operations. Metal production at Topia in Durango was over 420,000 silver equivalent ounces for the quarter, which represent a 16% increase over the first quarter of the previous year. The increase was attributed to higher throughput, improvement in average gold and zinc grades, and in silver and zinc recoveries.

As we have previously announced, we're only sourcing production in Guanajuato from the San Ignacio mine. This is enabling us to focus on an exploration program for the Guanajuato mine aimed at identifying high-margin mineral resources to feed the plant in the future. Metal production from the Guanajuato mine complex was approximately 350,000 ounces of silver equivalent ounces for the first quarter. This is down from 750,000 equivalent ounces produced last year in the same quarter as we are only sourcing from San Ignacio.

In addition, average silver and gold grades were also lower in the first quarter of 2018 -- excuse me, lower than in the first quarter of 2018 due to variability of mineral resource. Recoveries were also lower than planned and were a function of the lower ore grades as well as the change in processing to only process San Ignacio ore. It should be noted the grades and recoveries have improved since late in the first quarter, and the company's operations and geology teams are focused on optimizing and improving San Ignacio's mineral supply while we explore at Guanajuato.

I'll now hand the call over to Jim Zadra to discuss our financial summary for the first quarter.

Jim Zadra -- Chief Financial Officer

Thanks, Jim, and welcome everyone. For the first quarter of 2019, we reported a net loss of $0.05 per share. Although we reported mine operating earnings of $2.5 million, these were about a penny and a half per share lower than those of Q1 2018 due to noted operating factors at GMC and Tucano. Tucano also accounted for about a penny and a half in non-cash foreign exchange translation losses in the quarter since the acquisition date due to the depreciation of the Brazilian real.

As noted, Tucano's operations improved with the successful commissioning of the supplemental oxygen completed in late April, and these improvements are expected to positively impact financial results, particularly in the second half of the year with the benefit of the dry season. We've also seen improved results from our GMC operations since the start of the second quarter.

In connection with the acquisition we incurred about $2.6 million, or again a penny and a half per share, in non-recurring acquisition funds. Our G&A also reflected added head office overhead and G&A from the acquisition of Beadell. We're actively working on a program of winding down the former head office to realize cost synergies and expect the program to be substantially completed by Q3.

Jim previously discussed our progress with the Coricancha bulk sample program. We're continuing to expense all the costs associated with the project, and these, along with G&A and care and maintenance costs, amounted to about $1.6 million of expenditures in Q1 or about a penny a share.

For Q1, consolidated cash cost was $793.00 per gold ounce, and all-in sustaining cost excluding corporate G&A was $1,422.00 per gold ounce, reflecting the aforementioned operating factors, which affected both Tucano and GMC.

Tucano's AIFC was also affected by a higher stripping sequence in March, and with the noted improvements in Tucano's processing and higher productivity in the second half AIFC is expected to trend toward guidance of $1,003.00 to $1,130.00 per payable gold ounce, excluding corporate G&A.

We ended the first quarter with cash and cash equivalents of $41.4 million. Following the end of the quarter we repurchased the Beadell convertible debentures in the amount of $10.5 million and made about $4.3 million in scheduled repayments to MACA Limited, Beadell's largest creditor. In addition, MACA also converted approximately $3.5 million of debt to equity under the terms of their loan agreement and has a right to convert a further AUS$5 million in the current quarter and another AUS$5 million in the third quarter.

We also funded approximately $11 million in working capital for Tucano to manage through the commissioning of the new supplemental oxygen plan. With the improvements in our operations since the end of Q1, we're seeing positive cash generation, but despite that we may seek opportunities to refinance the recent debt repayments in order to have more working capital to fund the Coricancha restart should the results of the BSP support positive decision.

I will now turn the call back to our President and CEO Jim Bannantine.

James Bannantine -- President and Chief Executive Officer

Thank you, Jim.

As mentioned previously, we're pleased to provide production guidance for Brazil and Mexico. Please note that the Brazilian production guidance is effective for March 5, 2019, the acquisition date.

For Brazil we expect gold production of between 125,000 and 135,000 ounces. For Mexico, our guidance remains the same, but quoted in gold equivalent works out to 46,500 to 50,000 ounces with an 80:1 silver to gold ratio. Total consolidated guidance is expected within the range of 171,500 to 185,000 ounces gold-equivalent.

Cash costs are expected to be between $820.00 and $890.00 per gold ounce sold, with all-in sustaining costs excluding corporate G&A of $1,030.00 to $1,130.00 per gold ounce sold.

With that I'd like to open the call for questions. Operator?

Questions and Answers:

Operator

Thank you. We will now begin the question and answer session. To join the question queue, you may press * then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press * then 2. Once again, to join the question queue, please press * then 1 now.

Our first question comes from Heiko Ihle of H.C. Wainwright.

Heiko Ihle -- HC Wainright -- Analyst

Hey, guys. Thanks for taking my questions.

Jim Zadra -- Chief Financial Officer

Hey, Heiko.

Heiko Ihle -- HC Wainright -- Analyst

Hey, I have a conceptual question, a financial question, and then a dumb clarification that you can hopefully help me with. Conceptually, with Beadell, can you just sort of provide a more detailed roadmap of what you expected to see throughout your first six months of ownership versus what you've actually encountered? And then also just sort of the factors that you think may sway results one way or the other throughout the next few months, call it throughout the end of the year.

James Bannantine -- President and Chief Executive Officer

Sure, Heiko. So we're now the owners of Beadell for two months, since March 5. The primary drivers at Beadell is a cyclical -- or Tucano. We should be using Tucano as the name going forward. It's the Tucano mine of Great Panther -- is a cyclical rainy season, dry season production profile with well more than half the production in the half of the year of the dry season. That's because you can only be low in the pit during the dry season, so there's a lot of stripping at the top of the pit in the rainy season and a lot of harvesting of gold in the dry season at the bottom of the pit with a lower strip ratio.

So we're seeing that as expected. As we've talked about on our call at the time of the acquisition, the insufficient supply of oxygen was not as expected. That is now solved. So we should be back on plan, which is outlined in our guidance. The guidance does show a heavy production in the third and the fourth quarter, particularly in the fourth quarter, but you can see it quarter by quarter production guidance. And that's pretty much, I think that's the key metric to look at for the rest of the year. Obviously as we produce a lot more with costs relatively fixed, our all-in sustaining cost goes down quite a bit.

Heiko Ihle -- HC Wainright -- Analyst

Okay. This may turn more into a Jim Z. question, but going through your inventories, in exhibit 6a of your financials, your inventories went up almost 10-fold on a year-over-year basis of $44.5 million. I was surprised. Obviously you bought Tucano. I had Beadell in my notes, but I changed it to Tucano as per your request. My question really revolves around how much debt do you anticipate being able to decrease a bit with increasing efficiencies? I mean some of this is essentially cash equivalence, especially the $6 million of gold bullion that appears to be just sitting around.

Jim Zadra -- Chief Financial Officer

Yeah, and a good part of it is also stockpile, and with the -- I can't talk to specific numbers, but with the commissioning of the oxygen plant it's gonna reduce the need to stockpile ore. It's gonna effectively enable processing of run-a-mine ore, whereas previously Tucano was limited in processing the higher grade. So that should bring down the inventory levels going forward.

Heiko Ihle -- HC Wainright -- Analyst

You wanna throw a swing at quantifying that?

Jim Zadra -- Chief Financial Officer

Heiko, you can see that during the first quarter we would process an average grade of 0.95 grams per ton. The average grade on the mine, life of mine, is 1.7 grams per ton. We were stockpiling high-grade sulfides waiting for the oxygen to get there during the majority of the quarter and through the month of April, so that adds up to a lot of gold in stockpile. That's a big part of that number.

Heiko Ihle -- HC Wainright -- Analyst

Okay. And then just sort of going through your MBNA -- Actually it might have been from the financial statements. I'm not sure. But just to clarify, in your financials you list a bank overdraft of $770,000.00 or 3 million reals. It states that the account is already fully drawn. Annualizing the 1.1% per month interest rate you're paying 18.2% per year. Am I missing something? And I understand that the real's been devaluing. Or should that just be payed back as soon as possible, maybe with some of these inventories that get turned into cash?

Jim Zadra -- Chief Financial Officer

That's just a working capital item, Heiko. It just happened to be that that account was in overdraft. It's not one of the Tucano facilities, if you will. That was --

Heiko Ihle -- HC Wainright -- Analyst

Well, it sounds like it got maxed out, no?

Jim Zadra -- Chief Financial Officer

Correct, but it was just sort of a transitionary matter at the end of the quarter.

Heiko Ihle -- HC Wainright -- Analyst

So that should be gone by the end of Q2?

Jim Zadra -- Chief Financial Officer

Correct.

Heiko Ihle -- HC Wainright -- Analyst

Got it. Thank you, guys.

James Bannantine -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Mark Reichman of Noble Capital Markets.

Mark Reichman -- Noble Capital Markets -- Analyst

Good morning. I just have two questions. The first would be for Jim. It seems that you've already identified an abundance of opportunity to capture margin growth in subsequent quarters, but just focusing at the mine level beyond the addition of the supplemental oxygen plant in May, what other opportunities are there to improve performance at Tucano that might involve the mill, workforce issues, or other? Perhaps you could reconcile the first quarter AISC of $1,422.00 per ounce to the full year guidance range. Based on the much higher level of production in Q4, where would you expect AISC to land in the fourth quarter?

Jim Zadra -- Chief Financial Officer

Yeah, so thanks, Mark. I would say there's two -- It's kind of a two-step function. The first step in the function is obviously getting the supplemental oxygen there and processing much more normal grades for the mine, which...not only bring you more production and lower unit costs with more production but lower cyanide consumption. During the first quarter and the month of April, there was marginal grade material put through that would not have been put through were it not for the lack of oxygen. It would have been way at the end of the mine plan. So the first step in the function is just a recovery from those first four months of not having the oxygen, which dramatically lowers the AISC.

The second element in the function is a longer term element. I quoted it as midterm, which is cost reductions across the major cost elements of the mine. So right now we are using 9 megawatts out of 15 megawatts off-the-grid power. That means 6 megawatts of diesel firepower, big number. We have been, for lack of oxygen, consuming a lot of cyanide. Obviously getting the supplemental oxygen there not only helps on goal recoveries but it decreases cyanide consumption. We've got...many, many supplier/vendor contracts that once we have if you wanna call it a financially strong owner we should be able to realize savings on those contracts.

There are multiple small what I would call processing projects that we think have potential: a potential pebble crushers, a potential gravity gold element in the circuit. There's a long list of opportunities there. They're not gonna be overnight. So the overnight function is the oxygen being there. The over time, what we call continuous improvement opportunities, are the latter set.

Mark Reichman -- Noble Capital Markets -- Analyst

Okay. Thank you. And the second question would be for Jim, and that is just to address his high-level view of Great Panther's liquidity this year given planned capital expenditures. I wanted to know if there might be ways to tweak the balance sheet. I think he mentioned refinancing opportunities to enhance financial flexibility and/or enhance borrowing costs.

Jim Zadra -- Chief Financial Officer

Right. Thanks, Mark. The debt levels have been brought down quite significantly since the end of Q1. As we mentioned, we've repaid about $10 million in convertible debentures. We've also paid down the $5 million of MACA debt, and MACA also converted about $3.5 million of debt to equity. So that's improved the balance sheet quite significantly, and as we also noted with the improvement in processing at Tucano that's having a very positive effect on working capital, whereas obviously working capital draw in March and April as a result of the...lower levels of processing of lower grade ore while we're continuing to strip the plan.

That said, we do have plans for Coricancha should we make a positive decision to restart, and that will -- We'll only go ahead with that on the basis of having adequate capital, whether that's our own capital or external capital. So that's one lever we have to manage the capital needs, and if we find financing on appropriate terms we will go forward with strengthening the balance sheet.

James Bannantine -- President and Chief Executive Officer

We also -- Our operating mode is we wanna have a healthy cash account, healthy cash in the bank. So with the very short term amortization of big chunks of the ex-Beadell debt, if there's an opportunity out there, I would expect we'll take advantage of it...Thank you, Mark.

Operator

Our next question comes from Jake Sekelsky of Roth Capital Partners.

Jake Sekelsky -- Roth Capital Partners -- Analyst

Hey, guys. Just a few items on my end. It looks like grades have picked up quite nicely at Tucano, obviously with the commissioning of the supplemental oxygen system. I'm just curious if this is a grade profile you feel comfortable with going forward and how it compares to what you expect to see over the remainder of the year.

James Bannantine -- President and Chief Executive Officer

Yeah, so the grade that we're seeing now is a very good grade. It's a result of the high grade stock piles that we accumulated during the wait for oxygen. But yes, the life-of-mine average grade is around 1.7 on the mine. So we're looking at 1.5 to 2.0 grams going forward of what we processed.

Jake Sekelsky -- Roth Capital Partners -- Analyst

Okay. So you're right there. And I'm looking at the capex table on the MBNA, and would you just be able to provide some color around those numbers. I mean my gut feeling is the vast majority is earmarked for Tucano, but I'm just trying to get a handle on the breakdown, mainly between Mexico and Brazil.

Jim Zadra -- Chief Financial Officer

Sure, Heiko. Sorry, Jake. If you look at the sustaining capital, it's probably split 50/50 between Brazil and Mexico. The stripping, obviously that's all attributed to Brazil and Tucano, and the sustaining exploration and development, that's primarily Mexico. Of the non-sustaining, the $3-3.6 million, that's Topia plant expansion. So that's Mexico. And of the other non-sustaining piece, it's split between Coricancha and Tucano. And Tucano is primarily exploration drilling, and Coricancha is obviously the Coricancha project, should we make the decision. But that is also subject to financing. So we've added that in there to be conservative, but again it depends on our decision at the end of June and it depends on our capital.

James Bannantine -- President and Chief Executive Officer

Project type financing for Coricancha to move that forward quickly. What I guess I would also emphasize is a derivative of your question, Jake, that of the non-sustaining EEND at Tucano, if you've heard me speak before you know exploration is a big part of the Tucano story, both what we call infill and near-mine step-out drilling to begin with and then regional exploration drilling across a large land package in sequence to that. So we have started, and we intend to execute on a relatively aggressive exploration program at Tucano.

Jake Sekelsky -- Roth Capital Partners -- Analyst

Okay, thanks for that. That was exactly what I was looking for. It's very helpful. And then just lastly a more conceptual question as it relates to Coricancha. Is it fair to say that Tucano and Mexico take capital allocation precedent over Peru with where we stand today? I'm just trying to get a handle on how you're prioritizing the three segments with Mexico, Brazil, and Peru.

James Bannantine -- President and Chief Executive Officer

That's absolutely the case. It's one project at a time. Tucano's first in line, really Topia's kind of in parallel/second, and Coricancha's third to make sure that we keep a strong balance sheet.

Jake Sekelsky -- Roth Capital Partners -- Analyst

Very good. That's all on my end. Thanks again, guys.

Operator

Our next question comes from Craig Stanley of Eight Capital.

Craig Stanley -- Eight Capital -- Analyst

Good morning, guys. How's it going?

James Bannantine -- President and Chief Executive Officer

Hi, Craig.

Craig Stanley -- Eight Capital -- Analyst

Throughput for the rest of the year at Tucano, do you see it changing that much? Throughput through the mill.

James Bannantine -- President and Chief Executive Officer

No, I think we're pretty much on track there, Craig. You may have noticed in one of our releases that we were working on a maintenance issue on the sag mill. That seems to be in order. We also have -- We didn't go into that. We've got a primary crusher replacement at Tucano in our capex there. We inherited a pretty worn out primary crusher, but we can do that with a limited -- we think we can do that with limited production interruption. So we're still looking at the roughly 300,000 tons a month through the plant. Right now, as you saw in our May-to-date press release from Tuesday, we were producing a little less than that as we commissioned this supplemental oxygen plan and as we tweaked the sag, but our guidance and our budget is based on that 300,000 tons a month level.

Craig Stanley -- Eight Capital -- Analyst

Okay. And then the new contractor, you were saying in the presentation they're actually delivering right now above plan in 2019. Can you quantify that? Is it like 5% above plan, 10%?

James Bannantine -- President and Chief Executive Officer

Yeah. So it's on that order of 10%. We actually, if you remember the rainy season/dry season cyclicality of Tucano, we've got -- during the rainy season we move about 2.5 tons a month, and during the dry season we move about 3.5 tons a month. So we actually turned them up a little bit in the rainy season, and they were able to accomplish that with no problem. They've got the capacity and the ability to move the larger amount in the dry season, so we expect to be on budget for that.

Craig Stanley -- Eight Capital -- Analyst

Perfect. Thank you so much.

James Bannantine -- President and Chief Executive Officer

Thanks, Craig.

Operator

Once again, if you have a question please press * then 1. Our next question comes from Bhakti Pavani of Alliance Global Partners.

Bhakti Pavani -- Alliance Global Partners -- Analyst

Good morning, guys. Thanks for taking my questions.

James Bannantine -- President and Chief Executive Officer

Hi, Bhakti.

Bhakti Pavani -- Alliance Global Partners -- Analyst

Just a couple from my side. You did talk about conducting the significant exploration program at Tucano. Would you mind providing some additional details as to what size are you guys looking at currently and what's the budget that's spent?

James Bannantine -- President and Chief Executive Officer

So if you look at our corporate presentation and you look at the maps around that, you can see the infill and the near mine targets that we're shooting at, and that's roughly...Of that non-sustaining EEND, it's roughly half of that.

Bhakti Pavani -- Alliance Global Partners -- Analyst

Okay. And I know there have been multiple questions asked about production, but just kind of curious, given the production guidance range, what factors at this point could lead the production to be higher than guidance range versus the lowest?

James Bannantine -- President and Chief Executive Officer

There's obviously a lot of operating factors that can move you up or down, but if you look at the nature of our mines, the Mexican mines and the Brazilian mine have been running as they are pretty steadily. So it's not like we're bringing a new project into operation. We are expanding Topia, so the Topia mine, or the Topia plant expansion, excuse me, comes in the second half of the year. So we have to execute on that. Tucano having the oxygen plant kind of pretty much secures that. There's not a lot of moving parts on Tucano, so I don't expect any huge variances around that.

Bhakti Pavani -- Alliance Global Partners -- Analyst

Okay. And lastly, at Coricancha, with the bulk sampling program, could you maybe -- I'm not sure if you would be willing to, but I was wondering if you could provide some details on the grade there? And do you expect to generate any revenue from processing those stockpiles?

James Bannantine -- President and Chief Executive Officer

Not meaningful revenue, Bhakti. If you remember from our studies and our publications, the head grade at Coricancha at the mine is 770 grams per ton silver equivalent. Our objective has been to limit dilution from the mine to the plant to 40%. So we wanna deliver at least 60% of that head grade to feed grade at the plant. The results of our work to date look very positive to being able to achieve that. We'll publish that within the next month, the actual results of the mine grade to plant grade, and then take a decision on restarting it. Once we've taken that decision, the actual restart date will be a function of financing.

Bhakti Pavani -- Alliance Global Partners -- Analyst

Got it. Okay, that's it from my side. Thank you very much.

James Bannantine -- President and Chief Executive Officer

Thank you.

Operator

Our next question is a follow-up from Mark Reichman of Noble Capital Markets.

Mark Reichman -- Noble Capital Markets -- Analyst

Thank you. Just a quick question on priorities. I totally agree with the priorities you've set. I mean, I think there's a lot of value in Coricancha, but it was much more important prior to your acquisition of Beadell. So that kind of leads me to think about Guanajuato and the money you're spending there on exploration. At what point do you decide either to continue spending money on exploration at Guanajuato or move all of your chips over to Tucano?

James Bannantine -- President and Chief Executive Officer

That's a very good question, Mark. So Guanajuato and the results at the Guanajuato mining complex you can see suffered a bit from the lack of feed from Guanajuato. So San Ignacio is providing 2/3 of the feed, historically has provided 2/3 of the feed to the Guanajuato plant. It's a bit sub-scale without Guanajuato. We look at each Coricancha, Mexico, and Tucano as business units. So that business unit at Guanajuato would benefit greatly from extra resources that can turn that mine back on into a source of feed. And then given that, each business unit has its own intrinsic value.

We'd like to get that business unit up to full value and then keep an eye on it. It is run by the leader of the business unit, which is Brian Peer, our VP of Operations. So it doesn't really -- I mean with all honesty our focus is on Tucano, and the Guanajuato exploration is not a big dollar number and it's not a management distractor. So letting that run for the next few months and see how we do I think is prudent, but our big -- if you look at the company as a collection, our portfolio business units, you've got Mexico, you've got Peru, you've got Tucano, and you really have exploration as almost another business unit. And that mainly is Tucano exploration. The value of the exploration of Tucano is so significant that we're looking at that like a fourth business unit, and it will be the focus of exploration.

Mark Reichman -- Noble Capital Markets -- Analyst

Thank you very much.

Operator

This concludes the question and answer session. I would like to turn the conference back over to James Bannantine for closing remarks.

James Bannantine -- President and Chief Executive Officer

Thank you, Arielle. In closing I'd just like to say that we are really excited about executing on our strategy. For those of you who have followed Great Panther for the last few years, we're executing on the strategy that we announced a couple years ago in the acquisition of Tucano. We're also very excited about the integration of our Brazilian operation, our Brazilian team into the Great Panther Mining team. A lot of really bright people there. We also believe we're able to leverage some of our skills at Great Panther onto the Tucano asset and get the full value out of that.

We also are very optimistic on Coricancha and look forward to updating that over the next month or so. I believe that with the team that we have and our asset base and our balance sheet, we're really well-positioned to grow the company and add shareholder value through the rest of this year and then hopefully in further growth going forward in future years.

Thank you for your participation in the first call of Great Panther Mining, and on behalf of everyone here at Great Panther I look forward to sharing our progress with you in the next quarter and going forward. Thank you, Arielle.

Operator

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Duration: 43 minutes

Call participants:

Alex Heath -- Director of Corporate Development and Investor Relations

James Bannantine -- President and Chief Executive Officer

Jim Zadra -- Chief Financial Officer

Heiko Ihle -- HC Wainright -- Analyst

Mark Reichman -- Noble Capital Markets -- Analyst

Jake Sekelsky -- Roth Capital Partners -- Analyst

Craig Stanley -- Eight Capital -- Analyst

Bhakti Pavani -- Alliance Global Partners -- Analyst

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