The Company announced on January 29, 2021, an update to its exploration strategy and programs targeting result-driven exploration programs leading to resource replacement and near-mine growth, and longer-term organic growth through regional exploration. The programs for 2021 include: a 90,000 m drilling program across all of its operating mines and certain of its exploration projects with a planned expenditure of $13.4 million, the majority of which ($8.4 million) is focused on Tucano and includes a combination of open pit resource replacement and expansion drilling, Urucum underground drilling and regional and near target evaluation totalling 60,000 m. For more information, see the Company’s press release on January 29, 2021.

The Company has undertaken the reclamation of certain legacy tailings facilities at Coricancha under a remediation plan approved by the MEM, the relevant regulatory body. In addition, as part of the purchase of Coricancha, the Company has an agreement with Nyrstar for the reimbursement of the cost of these reclamation activities. The Company is seeking approval of a modification to a remediation plan from the MEM in accordance with the recommendations of an independent consultant to preserve the stability of nearby areas. The Company has changed the scheduling of the reclamation work, pending a decision from the MEM regarding the proposal to modify the approved remediation plan. To protect itself from any pending or future fines, penalties, regulatory action or charges from government authorities and to request that the MEM issue a decision on the proposed modification of the remediation plan for legacy tailings, the Company initiated a Constitutional Case and successfully obtained an injunction to prevent fines and penalties until MEM issues its decision.

Subsequent to the year ended December 31, 2020, the Company was notified of a second instance decision in the Constitutional Case, which unfavourably dismisses the Company’s constitutional challenge, but requests that the MEM issue a technical report evaluating the remediation plan within two months of the second instance decision. The Company expects that the related injunction will be cancelled in the near future. While the Company has appealed the Constitutional Case proceeding, it will not be possible to appeal the cancellation of the injunction. The cancellation of the injunction will expose the Company to potential fines, penalties, regulatory action or charges from government authorities. Separately, the Company plans to develop alternatives to propose to MEM to allow for the full reclamation while preserving the stability of the surrounding areas.

For a discussion for a discussion of the risks associated with this matter and Coricancha more generally, see Section 8 of this AIF under the headings “Risk Factors - Risks Associated with the Coricancha Acquisition” and “Risk Factors - Political Risks and Government Regulations”.

The Company did not complete a significant acquisition in the year ended December 31, 2020, for which disclosure is required under Part 8 of NI 51-102. Information concerning the Company’s acquisition of Tucano that occurred on March 4, 2019 is described in more detail under Section 18 under the heading entitled “Material Contracts”.

Great Panther produces gold doré at Tucano in Brazil. The gold doré is refined and sold directly to refiners or metal traders. The Company also continued to produce metallic concentrates containing silver, gold, lead and zinc at its Mexican operations. These concentrates are then sold to metal traders or directly to smelters and refiners that extract the metals from the concentrates (See Section 4.B of this AIF under the heading “Product Marketing, Sales and Distribution”). In 2020, gold accounted for 89% of the Company’s revenues, and silver accounted for 9%. The remaining 2% of the Company’s revenues are from the production of lead and zinc at Topia.

Gold and silver are precious metals traded as commodities primarily on the London Bullion Market Association (the “LBMA”) and Comex in New York (the “CME”). The LBMA is an international trade association, representing the London market for gold and silver bullion, which has a global client base. This includes the majority of the gold-holding central banks, private sector investors, mining companies, producers, refiners and fabricators. The on-going work of the LBMA covers a number of areas, among them refining standards, trading documentation and the development of good trading practices. The maintenance of the “Good Delivery List”, including the accreditation of new refiners and the regular retesting of listed refiners, is the most important core activity of the LBMA.

The LBMA gold price auction takes place twice daily by ICE Benchmark Administration at 10:30 and 15:00 London time with the price set in US dollars per ounce. The price is displayed on the LBMA’S website with a 30-minute delay. The LBMA silver price auction is operated by CME and administered by Thomson Reuters. The price is set daily in US dollars per ounce at 12:00 noon London time and is displayed on the LBMA’s website with a 15-minute delay. Reference prices for both gold and silver are also available in British Pounds and in Euros.

The gold and silver business is cyclical as smelting and refining charges rise and fall depending upon the demand for, and supply of, gold bullion and silver-gold concentrates in the market. In addition, the market prices of gold and silver have historically fluctuated widely, and are affected by numerous global factors beyond the control of the Company and the mining industry in general. A decline in such market prices may have an adverse effect on revenues from the sale of gold and silver.

Gold demand comprises four primary categories: jewelry, investment, central banks and other financial institutions, and technology. Jewelry has always been a dominant source of demand for gold and accounts for approximately half of world gold demand. Investment in gold by institutional and private investors accounts for around one third of global demand and is made up of direct ownership of bars and coins, or indirect ownership via Exchange-Traded Funds and similar products. Gold is also one of the few assets that is universally permitted by the investment guidelines of the world’s central banks due, in part, to the gold market being deep and liquid. Around 8% of the world demand for gold is for technical applications.

The electronics industry accounts for the majority of this, where gold’s conductivity and resistance to corrosion make it the material of choice for manufacturers of high-specification components. In addition, the metal’s excellent biocompatibility means that it continues to be used in dentistry. Beyond electronics and dentistry, gold is used across a variety of high-technology industries, in complex and difficult environments, including the space industry and in fuel cells. Gold’s catalytic properties are also beginning to create demand both within the automotive sector, as the metal has now been proven to be a commercially viable alternative to other materials in catalytic converters, and within the chemical industry.

In 2020, total physical silver demand accounted for 991.8 million ounces per the Silver Institute, World Silver Survey 2020, and comprised the following end markets categories: industrial use (52%), coins and bars (19%), and silver jewelry (20%) and silverware (6%). Approximately 58% of the industrial use is for electrical and electronic components and 19% is accounted for by use in the manufacturing of photovoltaics (solar cells). Silver has many key, and in some cases unique, properties such as durability, malleability, ductility, reflectivity, electrical conductivity, and antibacterial properties, which makes it valuable in numerous industrial applications. The applications include circuit boards, electrical wiring, superconductors, brazing and soldering, mirror and window coatings, electroplating, chemical catalysts, pharmaceuticals, filtration systems, solar panels, batteries, televisions, household appliances and automobiles. The unique properties of silver also make it difficult to substitute the element in its industrial applications.

The principal customers for the Company’s gold and metallic concentrates are international traders, smelters and refineries in Europe, Mexico, and Asia. For the year ended December 31, 2020, eight customers accounted for all of the Company’s revenues. Tucano produces gold doré and accounted for $223.7 million of revenue in 2020. Topia produces a lead concentrate and a zinc concentrate, and the GMC produces a silver-gold concentrate. Topia and GMC generated revenues of $15.9 million and $21.2 million in 2020, net of smelting and refining charges.

There is a global market for refined gold and metallic concentrates and the Company continues to identify and evaluate new buyers for its refined gold and metallic concentrates through an active marketing process. Great Panther’s head office in Vancouver provides sales and marketing services to its mining operations in respect of the sale of refined gold and metallic concentrates produced by its operations. The Company’s gold is typically sold once it has been refined to LBMA Good Delivery form.

For the Company’s sale of refined gold, the delivery of gold doré is made via land and air to one of two refineries, and is then refined to LBMA Good Delivery form. Typically, the refinery then allocates the refined gold to the Company’s end customer. The price for the refined gold is based on the prevailing market price of gold at the time of trading, and no adjustments to revenue are made subsequent to the initial recognition.

For the Company’s sale of metallic concentrates, the smelters and international traders pay the Company for an agreed upon percentage of the contained gold and other metals contained in the Company’s concentrates, net of refining, smelting, and other applicable charges. Revenues reported by the Company are net of these charges. The pricing for the contained metals in the concentrate is typically the average of all the daily quoted market prices within a specific month or other agreed period of time.

The delivery of metal concentrates is typically made by truck to customers’ warehouses. As concentrates can vary in terms of grade and quality from shipment to shipment, the sales are subject to a final settlement process to adjust for any variances. After the physical transfer of the metal concentrate, the Company has the right to request advance payments based on the provisional value of shipments calculated at spot prices for the contained metals. Such advances are typically 90% to 95% of the provisional value and are typically payable within 15 days from the date of the provisional invoice, depending on the specific contract. A final payment or adjustment is made on the date of final settlement, once all information regarding concentrate content is known, typically within five business days after the final weights, assays and prices are known and invoiced.

For the metallic concentrates, the sales and marketing generally involves an annual competitive tendering process and marketing and relationship development throughout the year. The tendering process culminates in the Company’s Mexican subsidiary entering into contracts with metal traders or smelting and refining companies for generally a one-year term. The tendering process enables the Company to review and renegotiate the terms of its contracts annually to ensure that it receives the most competitive pricing and terms possible. In 2019, the Company entered into a two-year agreement with an international trader for 100% of concentrate production from the GMC.

On February 4, 2020, the Company completed a $11.25 million gold doré prepayment agreement (the “Advance”) with Samsung C&T U.K. Ltd. (“Samsung”), a wholly owned subsidiary of Samsung C&T Corporation, headquartered in Seoul, South Korea and a part of the Samsung Group, in consideration of delivery and sale of approximately 3,000 ounces of gold contained in doré per month over a two-year period commencing January 2020 from Tucano. Gold deliveries are sold at a 0.65% discount to the benchmark price of gold at the time of delivery. The Advance is required to be repaid in equal instalments of $0.8 million per month commencing December 2020 until January 2022 such that all amounts outstanding to Samsung will be repaid in full. The Advance bears interest at an annual rate of 3-month USD LIBOR plus 5% and is secured by a pledge of all equity interests in Great Panther’s Brazilian subsidiary that owns Tucano. Great Panther has a full option for early re-payment of the Advance, subject to a 3% penalty applied to the outstanding balance. The agreement also provides Samsung a right of offer for concentrates produced from Coricancha in certain circumstances.

The Company’s Tucano operation is subject to seasonal fluctuations as a result of weather conditions. Specifically, Tucano’s production is typically stronger in the second half of a calendar year (normally August until January) as the dry season enables higher rates of mining productivity and the mine plan is characterized by lower strip ratios and access to higher grades in the open pits. Accordingly, Tucano typically has more favourable operating results in the second half of the year. The climate in Mexico allows exploration, mining and milling operations to be carried out year-round. Therefore, revenue and cost of sales generally do not exhibit variations due to seasonality. The exceptions are periods of excessive drought, which may limit or defer processing of mineralized material and/or concentrate. The dry season in Mexico generally extends from October through April. The Company has not experienced a suspension of mining and processing activities due to drought in any of the last three fiscal years.

The climate in Peru at the location of Coricancha, which is currently on care and maintenance, also allows mining activities to be carried out year-round. There is a rainy season from January to March that has in the past caused flooding and disruptions to operations in the area where Coricancha is located.

The Company’s business requires specialized skills and knowledge in the areas of geology, mining, metallurgy, social and environmental studies, permitting, claim management and finance. The Company has a number of employees with extensive experience in mining, engineering, finance, geology, exploration and development, including but not limited to, Robert Henderson, President & Chief Executive Officer and non-independent director; Jim Zadra, Chief Financial Officer; Neil Hepworth, Chief Operating Officer; Fernando Cornejo, Vice President of Operations, Brazil; Brian Peer, Vice President, Operations Mexico & Peru; and Nicholas Winer, Vice President, Exploration.

The Company’s business is to mine and process mineralized material and sell gold doré and precious and base metals concentrates. Prices for its products are determined by world markets over which it has no influence or control. The Company also competes with other mining companies, some of which have greater financial resources and technical facilities, for the acquisition of mineral interests, as well as for the recruitment and retention of qualified employees.

Brazil is a jurisdiction with a long history of mining. In Brazil, the National Mining Agency (“ANM”) is the federal agency entitled to regulate mining activities in Brazil. ANM was created in 2017, through Law No. 13.575/2017, replacing the National Department of Mines (“DNPM”), and regulates the conduct of exploration, development and mining operations.

Mining operations in Brazil are regulated primarily by Decree No. 227 of February 28, 1967, the Brazilian Mining Code enacted by Decree No. 62,934 of July 2, 1968, and certain rulings, such as the Consolidation of DNPM Regulations issued by DNPM Ruling No. 155 on May 17, 2016, and more recently federal laws No. 13.540/2017 and No. 13.575/2017 and, more recently, Decree No. 9,406 of June 12, 2018, which updated DNPM Ruling 155/2016 and established the new regulation of the Brazilian Mining Code.

The ANM requires certain fee payments for exploration licences (known as the Annual Fee per Hectare), certain royalty payments to the federal government for the mining concessions (known as Financial Compensation for the Exploitation of Mineral Resources - “CFEM”) and for royalty payments to be made to the landowner if the surface rights are not held by the holder of the mineral rights. Mining activities are subject to a statutory royalty, CFEM, on the revenue arising from the sale of mineral product. Federal Law No. 13,540/2017 increased the CFEM rate for gold from 1.0% to 1.5% on the gross revenue.

In Brazil, failure to demonstrate the existence of technical and economically viable mineral deposits covered by an exploration licence within the validity of such licence may lead to the licence being required to be returned to the federal government. The federal government may then grant the exploration licence to other parties that may conduct other mineral prospecting activities at said area. Nonetheless, mining activities are also subject to state and municipal laws, particularly on taxes and environment.

Exploration activities are authorised by Exploration Licences granted by the ANM. In general, such licences are valid for a three-year period. Licences are usually renewable upon request for an additional three years, at ANM’s discretion. Exploitation activities are authorised by Mining Concessions, granted by the Ministry of Mines and Energy. Mining Concessions have no expiration date, being valid until the depletion of the mineral deposit.

The Brazilian state and federal governments from time to time implements changes to tax laws and regulations. Any such changes, as well as changes in the interpretation of such laws and regulations, may result in increases to the Company’s overall tax burden, which would negatively affect its profitability. The Brazilian federal government has frequently implemented multiple changes to tax regimes. Potential changes include (among others) modifications to prevailing tax rates and the enactment of taxes, which may be temporary, the proceeds of which are earmarked for designated governmental purposes. Some of these changes may result in increased the Company’s tax burden, which could materially adversely affect profitability and increase the prices of products and services, restrict its ability to do business in existing and target markets and cause its financial results to suffer. Moreover, some tax laws may be subject to controversial interpretation by tax authorities, including, but not limited to, the regulation applicable to corporate restructurings.

For a discussion of risks associated with the regulatory framework that Company is subject to, see Section 8 of this AIF under the heading “Risk Factors – Political and Government Risk”.

The mining industry in Mexico is controlled by the Secretaría de Economía – Dirección General de Minas which is located in, and administered from, Mexico City. Mining concessions in Mexico may only be obtained by Mexican nationals or Mexican companies incorporated under Mexican laws. The construction of processing plants requires further governmental approval.

In Mexico, surface land rights are distinct from the mining concessions.

The holder of a mining concession is granted the exclusive right to explore and develop a designated area. Mining concessions are granted for 50 years from the date of their registration with the Public Registry of Mining to the concession holder as a matter of law, if all regulations have been complied with. During the final five years of this period, the concession holder may apply for one additional 50-year period, which is automatically granted provided all other concession terms have been complied with. Mining rights in Mexico can be transferred by their private holders with no restrictions or requirements other than to register the transaction with the Public Registry of Mining.

In accordance with the Federal Duties Law, the holder of a mining concession is obligated to pay biannual duties in January and July of each year based upon the number of hectares covered by the concession area.

Concessionaires must perform work each year that must begin within 90 days of the concession being granted. Concessionaires must file proof of the work performed each May. Non-compliance with these requirements is cause for cancellation only after the Secretariat of Economy of Mexico communicates in writing to the concessionaire of any such default, granting the concessionaire a specified time frame in which to remedy the default.

If a concession holder does not carry out exploration and exploitation activities for two continuous years within the first 11 years of its concession title, it will be required to pay an additional charge equal to 50% of the two-year concession duty. The concession duty increases to 100% for continued inactivity after the 12^th year. Payment of the additional concession duty is due 30 days after the end of the two-year period.

In Mexico, there are no limitations on the total amount of mining concessions or on the amount of land that may be held by an individual or a company. Excessive accumulation of concessions is regulated indirectly through the duties levied on the property and the production and exploration requirements as outlined above.

Mexican mining law requires the payment of a discovery premium related to National Mineral Reserves, Concessions in Marine Zones, and Allotments to the Council of Mineral Resources.

Environmental protection regulations in Mexico require permits for mine operations and exploration, for operating a processing plant, for the discharge and/or deposition, and for changes to grandfathered projects. There are four government departments that deal with and regulate such affairs.

Mining companies are subject to a special mining duty of 7.5% on profits derived from the sale of minerals, and an extraordinary mining duty of 0.5% on the gross value of sales of gold, silver and platinum.

On January 13, 2021, a bill proposing to replace the ordinary mining duty (surface fee up-to MXN$165 per hectare of the concession) with a royalty payment of 5% or 8% of the gross sales of minerals (8% in the case of gold, silver and copper). This would be in addition to the special mining duty and extraordinary mining duty currently applicable. If this legislation is approved in its current form, additional costs may be imposed on our Mexican operations, the impacts of which could be significant. Also, as part of the 2021 tax reform, the right to credit the ordinary mining duty payments against the special mining duty payments was eliminated for 2022 onward, and reduced to 50% for 2021. This is expected to result in an increase in the tax burden for Mexican operations since 73% of the special mining duty collected from all mining companies was paid through such credit mechanism.

In late 2020, the President of Mexico introduced a Federal Bill that if implemented, would repeal various articles of the Federal Labour Law, Social Security Law, Law of the National Workers’ Housing Fund Institute, Federal Fiscal Code, Income Tax Law and the Value Added Tax Law. The intent of the Bill is to significantly limit the ability of operating companies to subcontract and outsource labour to contractors and to employ related service providers, likewise to limit the ability of operating companies to subcontract labour to insource companies. If this legislation is approved, fees payable to the Social Security based on the risk for activities will be increased since all employees and workers will be hired by the same company (operating company), profit sharing costs that did not apply to the operative companies due to either insource or outsourcing operations will apply, payroll taxes and benefits costs may be imposed on our Mexican operations, the impacts of which could be significant.

For a further discussion of risks associated with the regulatory framework that Company is subject to, see Section 8 of this AIF under the heading “Risk Factors – Political and Government Risk”.

In Peru, the General Mining Law allows mining companies to obtain clear and secure title to mining concessions. Surface land rights are distinct from mining concessions. The government retains ownership of all subsurface land and Mineral Resources, but the titleholder of the concessions retains ownership of extracted Mineral Resources. Peruvian law requires that all operators of mines in Peru have an agreement with the owners of the land surface above the mining rights or to establish an easement upon such surface for mining purposes. Mining concessions allow for both exploration and for exploitation.

Mining rights in Peru can be transferred by their private holders with no restrictions or requirements other than to register the transaction with the Public Mining Register. The sale of mineral products is also unrestricted, so there is no obligation to satisfy the internal market before exporting products.

Peru enacted environmental laws whereby the MEM and the Environmental Ministry have issued regulations mandating environmental standards for the mining industry. Under these standards, new mining development and production requires mining companies to file and obtain approval for an Environmental Impact Assessment, which incorporates technical, environmental and social matters, before being authorized to commence operations.

OEFA is the government agency that monitors environmental compliance. OEFA has the authority to carry out audits and levy fines on companies if they fail to comply with prescribed environmental standards and permits. OSINERGMIN is the government agency in charge of supervising the compliance of safety and technical regulations. In a similar way to OEFA, the OSINERGMIN may impose fines and sanctions in case such regulations are not complied with.

In addition, there is regulation for obtaining permits for the use and acquisition of explosives for civilian use, through SUCAMEC, the National Superintendency of Control of Security Services, Weapons, Ammunition, and Explosives for Civilian Use authority, a specialized technical institution attached to the Ministry of the Interior.

The following permits are generally needed for a project: Certificate for the Inexistence of Archaeological Remains Environmental Impact Assessment; Mine Closure Plan; Establishment of a Financial Guarantee for Closure; Beneficiation Concession; Mining Transportation Concession; Permanent Power Concession; Water Usage and Discharge Permits; Easements and Rights-of-way; District and Provincial Municipality Licenses and Construction and Operation Permits within its jurisdiction.

Companies incorporated in Peru are subject to income tax on their worldwide taxable income, while foreign companies that are located in Peru and non-resident entities are taxed on income from Peruvian sources only. The corporate income tax is 29.5%, in addition 8% of profit sharing to employees. In general terms, mining companies in Peru are subject to the general corporate income tax regime. If the taxpayer has elected to sign a Stability Agreement, an additional 2% premium is applied on the regular corporate income tax rate. The Company has not signed a Stability Agreement. Also, 50% of income tax paid by a mine to the Central Government is remitted as “Canon” by the Central Government back to the regional and local authorities of the area where the mine is located.

In Peru, a dividend tax rate of 5% is imposed on distributions of profits to non-residents and domiciled individuals by resident companies and by branches, permanent establishments, and agencies of foreign companies.

Peru has a royalty referred to as the Modified Mining Royalty (“Peruvian Royalty”) that applies to operating income at marginal rates ranging from 1% to 12%, and is payable quarterly. Operating income is defined as revenues from the sale of Mineral Resources, less cost of goods sold, less operating expenses, based on Peruvian statutory reporting regulations, with minor adjustments for interest and exploration expenditures.

Under the Peruvian Royalty regime, an “operating income” to “mining operating revenue” measure (operating profit margin) is calculated each quarter and the royalty rate increases with the increase in operating margin. Although the Peruvian Royalty is based on operating income, a company must pay at least 1% of sales, regardless of its profitability.

In addition, a Special Mining Tax (“SMT”) is a tax imposed in parallel with the Peruvian Royalty. The SMT is applied on operating mining income based on a progressive scale, with marginal rates ranging from 2% to 8.4%. The SMT is also payable on a quarterly basis.

For a discussion of risks associated with the regulatory framework that Company is subject to, see Section 8 of this AIF under the heading “Risk Factors – Political and Government Risk”.

The Company has taken a proactive approach to managing environmental risk. In Mexico, it is participating in a voluntary environmental audit of its GMC and Topia operations. The outcomes of these audits are multi-year environmental programs, working in cooperation with PROFEPA to ensure compliance with regulations governing the protection of the environment in Mexico.

In Brazil, all licences required by various government agencies covering the operation of Tucano and its mill, and processing plant have been obtained or applications for renewals have been filed and expected in the ordinary course. The complete environmental studies, permitting, and social or community impact was carried out by third-party consultant in 2011 for the Operating Licence issued by the State Secretariat of Environment in Amapá, SEMA to operate a SAG7 mill/CIL processing plant. The Company will be required to obtain further approvals with respect to construction of certain of its additional TSFs. For a discussion of these additional TSFs, see Section 5.A.12 of the AIF under the heading “Mining Properties – Tucano - Infrastructure, Permitting and Compliance Activities”.

Groundwater and surface water monitoring is performed through field checking of daily monitoring activities and collection of samples for chemical analysis at Tucano’s facilities. There are also monthly, quarterly, and half-yearly sample collections as required by environmental agencies, which are required to be sent to a certified external laboratory.

In Peru, the Company is required to remediate certain legacy tailings facilities at Coricancha under a remediation plan approved by the MEM, the relevant regulatory body. In addition, as part of the purchase of Coricancha, the Company has an agreement with Nyrstar for the reimbursement of the cost of reclamation or remediation activities associated with the legacy tailings facilities up to a maximum of $20 million. The Company is seeking approval of a modification to a remediation plan from the MEM to remediate the tailings in situ in accordance with the recommendations of an independent consultant to preserve the stability of nearby areas. The Company has stopped reclamation activity, pending a decision from the MEM regarding the proposal to modify the approved remediation plan. To protect itself from any pending or future fines, penalties, regulatory action or charges from government authorities and to request that the MEM issue a decision on the proposed modification of the remediation plan for legacy tailings, the Company initiated a Constitutional Case and successfully obtained an injunction to prevent fines and penalties until MEM issues its decision. The Company was recently notified of a second instance decision in the Constitutional Case, which unfavourably dismisses the Company’s constitutional challenge, but requests that the MEM issue a technical report evaluating the remediation plan within two months of the second instance decision. The Company expects that the related injunction will be cancelled in the near future. While the Company has appealed the Constitutional Case proceeding, it will not be possible to appeal the cancellation of the injunction. The cancellation of the injunction will expose the Company to potential fines, penalties, regulatory action or charges from government authorities. Separately, the Company plans to develop alternatives to propose to the MEM to allow for the full reclamation while preserving the stability of the surrounding areas. For more information on the impact of the Constitutional decision, see Section 3.B.2 of this AIF.

In addition to the Coricancha legacy tailings, material removal from old waste dumps is required by OSINERGMIN. In 2020, the waste that showed favourable economics was processed in the Coricancha process plant. Approximately 150,000 tons of waste remains to be moved to a purpose-built waste dump at Huamuyo Alto.

As at December 31, 2020, the Company has a provision of $68.3 million on its Statement of Financial Position for the estimated present cost of reclamation and remediation expenditures associated with the future closure of its mineral properties, and plant and equipment, at the GMC, Topia, Tucano and Coricancha. The estimated expenditures are to commence near the end of each mine’s useful life except as may be required by applicable law. For a discussion of risks associated with the estimate of reclamation liabilities, see Section 8 of the AIF under the heading “Risk Factors - Substantial Decommissioning and Reclamation Cost”.

For additional discussion of environmental considerations, please refer to sections entitled “Infrastructure, Permitting and Compliance” in Sections 5 and 6 of this AIF.

Note:

Great Panther is committed to responsible mining and believes that sharing the value created by the Company’s activities contributes to its host communities’ social and economic development.

The Company’s sustainable development approach is planned to ensure that programs are designed as catalysts for mutual and lasting socio-economic benefits. These initiatives are based on active collaboration with host communities and aim to contribute to healthy and sustainable societies. Great Panther believes that two-way engagement builds trust and fosters genuine partnerships with local stakeholders. Consequently, it relies on respectful, open, and frequent communication with the members of its neighbouring communities.

Stakeholder engagement and social investment programs implemented by the Company in Brazil, Mexico, and Peru also include partnerships with local governments and civil society organizations and are focused on three main areas: socio-economic development, public health and safety, and natural and cultural heritage. As described in its Social Investment Policy, the Company prioritizes social investment initiatives that contribute to improving the quality of life of the communities surrounding its operations and that continue to make positive impacts beyond its participation.

Great Panther’s community relations teams implement comprehensive stakeholder engagement initiatives with the local communities to create and maintain mutually beneficial relationships by understanding the positive influence that mines and projects can have on regional development.

Specifically, at Tucano, as part of its operating licence requirements, the Company annually contributes capital to the Social and Environmental Compensation Funds of the local municipalities of Pedra Branca and Serra do Navio in the state of Amapá. An elected council with representatives of the communities, City Hall, City Council and the Company reviews and analyzes the community development to be executed under this agreement in their respective municipalities.

In 2020, Great Panther published its inaugural Sustainability Report, which was prepared following the Global Reporting Initiative (“GRI”) Standards and the GRI Mining & Metals Sector Disclosures. The Sustainability Report outlines the Company’s sustainability approach across various topics deemed material by its stakeholder groups and summarizes the 2019 sustainability performance. The Sustainability Report also underscores Great Panther’s ongoing commitment to transparency with all stakeholders and is available for viewing on the Company’s website (www.greatpanther.com). The Sustainability Report does not form part of this AIF.

Health and Safety is an issue that affects workers around the globe. Health and Safety risks are inherent to all mining operations, and the mining industry has developed best practices at international and national levels. Great Panther believes that all injuries and occupational diseases can be prevented and recognizes that everyone is entitled to work in a safe and healthy workplace. Potential safety hazards at mines include working near heavy equipment and working near rock faces either on surface or underground. Health and Safety also include the prevention of occupational diseases or injury resulting from exposure to harmful elements such as noise and dust. With the commitment to ensuring that employees and contractors can perform their work safely, the Company’s vision is that every person goes home safely every day.

All sites are responsible for producing a Safety Management Plan. This plan establishes clear accountability for safety and health performance, details the controls and practices for minimizing hazards, and ensures effective safety systems audits. There is also a requirement for regular reviews and updates of these plans, informed by employee feedback.

The Company invests significantly in onsite training at its mines to comply with national safety regulations and in response to employee consultations, which helps to identify specific issues that require further attention. Training focuses on creating an overarching ‘safety culture,’ including through the Abordagems system (safety approach) in Brazil, and the SafeStart program in Mexico, which targets personnel’s values, attitudes and behaviour, and involves their family members.

In alignment with a Health and Safety Declaration developed for each of the mine sites, the Company monitors types and rates of injury to understand if its efforts effectively increase safety in the workforce.

These indicators are:

A good safety culture includes a process of constant improvement by which risks are continuously identified and responsibly managed. Complying with, and going beyond, safety regulations is essential for the Company’s business. Great Panther’s mine sites work closely with Ministries of Labour in all countries where it operates and carries out audits to identify risks and prevent accidents. The Company also conducts detailed risk analyses to identify the risks and hazards associated with all routine and specialized tasks. During this process, probability and severity of an injury are evaluated. This process results in a recommendation of the type of equipment for female and male workers that must be used and other measures to mitigate risks. Risk analyses are updated every one to two years or whenever a new task or change in the environment warrants it.

The Company also engages third parties to carry out specific work environment studies (noise, dust, vibration, temperature and lighting). The outcomes of these studies determine whether or not the current exposure is within the permissible limit of the norm.

The Company has introduced safety programs to promote and foster safety awareness and recognize safety champions within its operations, including a Safety Olympics program in Brazil. On February 22, 2018, Great Panther regretfully announced the passing away of Mr. Kenneth W. Major, who had served as Director of the Company since March 2011, including distinguished service as Chair of the then Safety, Health and Environment Committee, in addition to service on other committees of the Board. In Mr. Major’s honour, the Company has established the Kenneth W. Major Award for Safety Excellence to annually recognize Great Panther employees and contractors who exemplify Mr. Major’s value of safety in the workplace. Since its introduction, the Kenneth W. Major Award for Safety Excellence has been awarded to 19 individuals.

Great Panther has a corporate crisis plan and emergency response plans for different situations or contingencies at each operation that are reviewed and updated throughout the year. The emergency response plans focus on protecting its people, the environment and the Company’s assets. During the year, Great Panther mine sites conduct emergency preparedness activities to test and refine procedures for a variety of incidents, from landslides to chemical spills. These activities include evacuation drills, emergency simulations, first aid and search and rescue training by the Company’s emergency brigades.

Despite our constant focus and numerous initiatives around worker safety, Great Panther experienced a fatal accident at the GMC during the second quarter of 2020 as a result of a vehicle accident during care and maintenance activities. Great Panther personnel immediately followed mine rescue protocols, and authorities arrived at the mine to review the site of the accident. A full internal investigation was completed. The Company considers the health and safety of its workers and others in the communities in which it operates to be a top priority and provides safety training as discussed above and continuously updates safety procedures and practices.

Great Panther has been closely monitoring the effects of the spread of COVID-19 with a focus on the jurisdictions in which the Company operates and its head office location in Canada. The rapid worldwide spread of COVID-19 has resulted in governments implementing restrictive measures to curb the spread of the virus. During this period of uncertainty, Great Panther’s priority is to safeguard the health and safety of personnel and host communities, support and enforce government actions to slow the spread of COVID-19 and to assess and mitigate the risks to our business continuity. As of the date of this AIF, mining and processing operations at Tucano, the GMC and Topia are operating without any significant impacts related to COVID-19.

In response to the increased rate of spread of COVID-19 infection, including the high incidence of infection in areas where the Company operates, the Company has developed and implemented COVID-19 prevention, monitoring and response plans following the guidelines of the World Health Organization and the governments and regulatory agencies of each country in which it operates to ensure a safe work environment at its offices and sites. There is no assurance the Company’s plans and protocols will be effective in stopping the spread of the COVID-19 virus and the Company may experience an increase in COVID-19 infection amongst its employees and contractors even with adoption of enhanced safety protocols and safeguards.

On April 2, 2020, the Company commenced an orderly suspension of mining and processing activities at the GMC and Topia in compliance with the directive of the Mexican Federal Government announced on March 31, 2020, to mitigate the spread of COVID-19. The first directive required suspension of activities until April 30, 2020, and was subsequently extended to May 30, 2020. On June 3, 2020, the Company restarted mining operations in Mexico following a government order adding mining to the list of essential services. The restart followed a phased approach to accommodate new protocols in response to COVID-19. Some administrative and technical staff continue to work from home.

On November 16, 2020, the Company temporarily suspended operations in Topia due to the detection of COVID-19 among the workforce. On December 17, 2020, the Company restarted Topia operations.

The Company has prepared contingency plans if there is a full or partial shutdown at any of its operations and is prepared to act quickly to implement them. If authorities seek to restrict mining activities to mitigate the spread of COVID-19 or if the Company faces workforce shortages as a result of the spread, the Company will endeavour to do so in a manner to satisfy authorities and address workforce availability without executing a complete shutdown. The Company cannot provide assurance there will not be interruptions to its operations in the future.

At Tucano, these measures may involve the curtailment of only mining operations with the mill continuing to process stockpiled ore at reduced rates and assessing options for phased operating reductions should they be necessary.

As a result of the high incidence of case numbers in Brazil, Tucano had to make operational adjustments in 2020 to minimize the impact on production resulting from its reduced work force. There is no assurance that such operational adjustments will be successful in the future or that Tucano will not experience interruptions to its operations in the future as a result of COVID-19.

The Company has experienced workforce shortages, including a reduction in the availability of supervisory staff at its operations as a result of COVID-19, particularly in its Mexican operations. The Company has also experienced delays in the permitting process associated with its operations and exploration and development work programs.

For more information about COVID-19 and the effects on the Company’s business, see Section 8 of this AIF under the heading “Risk Factors – COVID-19 and Other Pandemics”.

Great Panther has three wholly-owned mining operations including the Tucano gold mine acquired in 2019, which produces gold doré and is located in Amapá State in northern Brazil, the Topia mine in the State of Durango, Mexico, which produces concentrates containing silver, gold, lead and zinc, and the GMC in the State of Guanajuato, Mexico. The GMC comprises the Guanajuato Mine, the San Ignacio Mine, and the Cata processing plant, which produces silver and gold concentrates.

The scientific and technical information on Tucano in this Section 5.A of the AIF is based on the Tucano Technical Report described in Section 1.E. of the AIF. The conclusions, projections and estimates as well as certain other information included in this Section of the AIF are presented in summary form and subject to the qualifications, assumptions and exclusions set out in the Tucano Technical Report. Readers are recommended to read the Tucano Technical Report in its entirety to fully understand the project. The Tucano Technical Report in available on SEDAR (sedar.com) or on EDGAR (sec.gov).

Great Panther owns a 100% interest in Tucano through its wholly-owned subsidiary, Mina Tucano Ltda. Tucano consists of open pits which deliver ore to a 3.6 million tonnes per annum processing plant located at Tucano and has exploration licenses and mining concessions spread across approximately 2,000 square km. In 2020, Tucano produced 125,417 gold ounces.

The property comprises 39 mineral rights, concessions and leases, totaling 197,283 ha. Great Panther, through its wholly-owned Brazilian subsidiaries, has 100% ownership of all tenements except for one tenement that is not part of the key tenement package, of which it holds a 49% interest. References to the “property” in this Section 5.A are to Tucano.

Exploitation activities are authorised by Mining Concessions, granted by the Ministry of Mines and Energy. Mining Concessions have no expiration date, being valid until the depletion of mineral deposit. The Tucano Mining Concession (851.676/1992) and Exploitation Application (850.865/1987) are centered within an approximately 140,000 ha block of key, contiguous exploration tenements held by Great Panther. This ground area spans a strike length of approximately 90 km of Paleoproterozoic greenstone terrain and is owned 100% by Great Panther.

Tucano also has a Mining Lease (858.079/2014) with Zamin Amapá Mineração S.A. for the exploration of gold within Zamin mineral rights. These mineral rights are held by Zamin for iron ore and border, to the south, the Tucano Mining Licence. In 2017, Zamin entered into receivership and Tucano is awaiting clarification of its rights.

The balance of Tucano mineral rights are Exploration Licences granted by the ANM that authorize exploration activities and have varying degrees of exploration work associated with them. In general, such licences are valid for a three-year period. Licences are usually renewable upon request for an additional three years, at ANM’s discretion, and if justified by a partial exploration report. At the end of the second phase of exploration, a final exploration report must be submitted.

The surface rights for the Mining Concession and four other mineral rights concessions in the mining area have also been secured by agreement. These surface rights agreements are sufficient to cover the existing mining operations at Tucano.

Tucano is located in Amapá State, Brazil, at latitude 0.85°N and longitude 52.90°W. The mine is approximately 200 km from Macapá, the state capital, and is accessible by the Brazilian federal highway BR-210 or by chartered aircraft. The access comprises:

Tucano is subject to both federal and state royalties and other royalty agreements in relation to mineral product sales. In summary these are:

The CFEM is a federal royalty and is calculated over the amount of gross revenue obtained in the sale of mineral products. In respect to gold sales, Great Panther is liable to pay a royalty of 1.5% on gross revenue from production at Tucano.

The TFRM is a royalty levied by Amapá State. The TFRM is currently calculated based on the grams of gold produced multiplied by the state index rate of Brazilian real BRL 3.2437 which is then multiplied by a factor of 0.25. In prior years, the factor has ranged from 0.4 in 2017 to 0.1 in 2018 and 2019, respectively.

The Social and Community Development funds have resulted from various agreements with Amapá State and the municipalities of Pedra Branca do Amapari and Serra do Navio which are located near Tucano. Under the terms of the agreements, Great Panther will pay a maximum 1% royalty of the gross proceeds from gold sales from Tucano to support the socio-economic and community development of the municipalities of Pedra Branca do Amapari and Serra do Navio.

The Commodities Royalty is payable to the previous holders of 13 tenements acquired by Great Panther. These are tenements currently not being mined by Great Panther. The Commodities Royalty is levied at 0.75% of commodity sales revenue arising from those 13 tenements less transport and insurance expenses, and royalties payable. Mr. Winer, Vice President Exploration of Great Panther is a former partner of Mineracao Vale dos Reis and accordingly, if a Commodities Royalty becomes payable, Mr. Winer would be a recipient.

Anglo American Plc discovered a mineralized shear zone in 1994, undertook extensive exploration between 1995 and 2002, and through AngloGold, completed a feasibility study of the oxide Mineral Resources in October 2002.

In May 2003, Tucano was acquired by EBX Gold Ltd. (“EBX”). EBX carried out a feasibility study for the oxide mineral resources and a pre-feasibility study for mining the sulphide mineralization.

In January 2004, Tucano was acquired by Wheaton River Minerals Ltd. (which later merged with Goldcorp Inc. (“Goldcorp”) in 2005). Mine construction began in July 2004, with the first gold poured in late 2005. Goldcorp sold Tucano to Peak Gold Limited (“Peak Gold”) in April 2007. Peak Gold later merged with Metallica Resources Inc. and New Gold Inc. in June 2008.

The operation did not reach the predicted gold production due to issues related to the clayey nature of the saprolite mineralization. In response, metallurgical test work was conducted during 2007 to investigate the potential improvements of installing a wash-plant to remove fines and clays to improve heap percolation. Given that the results from the test work were inconclusive, and considering the relative amount of oxide resource available, the plans for an integrated wash-plant and oxide and sulphide milling circuit were put aside in favour of a milling and CIL circuit to treat predominantly sulphide, and remnant oxide material.

Until the closure of Tucano in 2009, mining operations extracted 8.8 Mt of ore from four areas, TAP AB (pits 1, 2, and 3), TAP C, TAP D, and Urucum. Total gold production from the heap leach operations was approximately 316,000 ounces of gold.

In 2010, Beadell, through Mina Tucano (then known as Beadell Brazil Ltda), a wholly-owned subsidiary, acquired Tucano and commenced construction of a CIL plant to augment the existing process infrastructure. Mining and stockpiling of ore commenced in 2011 and the CIL plant was commissioned in November 2012. Beadell upgraded the plant from 2018 to 2019 including a ball mill, pre-leach thickener, leach tank and oxygen plant.

Great Panther acquired Tucano in March 2019 and holds a 100% interest.

The South American Precambrian Shield comprises approximately 50% of the bedrock in Brazil and consists of major Proterozoic deformation zones surrounding cratonic nuclei of Archean age. The three principal cratons are the Guyana Craton in the north, the Amazon (or Guapore) craton immediately south of the Amazon River, and the São Francisco Craton situated between the Amazon Craton and the coast. The cratons are mostly a granite gneiss complex including some highly metamorphosed supracrustal belts, of which greenstone belts represent a small portion. Remoteness and lack of outcrops due to deep weathering prevent detailed stratigraphic and structural mapping across most of the greenstone belts. However, stratigraphic and structural elements typical for greenstone belts worldwide are well recognized in most South American examples.

The mineralization at Tucano occurs in a series of deposits over a 7 km strike length associated with a north-south trending shear zone occurring coincident with a north-south line of topographic ridges. From south to north, these deposits have been named TAP A, B, C, and Urucum. TAP D is a separate structure in the west. Higher grades are associated with the more intensely hydrothermally altered rocks.

Deep weathering is present in most of the deposits with high grade mineralization extending to the surface where it is covered by a layer of colluvium several metres thick. Gold mineralization can be found in the fresh rock at depth, in the saprolite zone created by in-situ weathering of the underlying rocks, and in colluvial deposits that overlie the saprolite mineralization as a blanket, spreading out over the hill slopes.

Sulphide zones follow shear plane foliation, often crosscutting the Banded Iron Formation (“BIF”) and other host meta-sediments and as bedding parallel lenses dipping either east or west along the limbs of the folded BIF units associated with calc-silicate units and hosted by metamorphic schists or sandwiched between and cut by feldspar quartz porphyritic dykes and sills. Outside the shears and faulted zones, host rocks are poor in sulphide and gold. The accumulation of auriferous massive and/or disseminated sulphides in zones of fractures and folds, and forming plunging mineralized shoots, often crossing lithological contacts, suggests an epigenetic event.

The gold mineralization at the Urucum and TAP AB deposits is observed to be related to elevated abundances of pyrrhotite that occurs in both stratiform and cross-cutting relationships with the host rocks. The primary host rock has been a BIF, with other host rocks containing lesser quantities of gold.

Digital interpretations of the distribution of the gold mineralization for the Urucum and TAP AB deposits were prepared using Seequent Limited’s Leapfrog software package by consultants specialized in wireframe modelling. The mineralization wireframes were created using a nominal cut-off grade of 0.3 g/t Au for oxide material and 0.4 g/t Au for fresh material, across a minimum width of 3 m to align with the cut-off grade and minimum width criteria that are currently being employed by the mine staff for establishing the ore/waste dig packets at the Urucum and TAP AB deposits.

Gold zones occur as a series of semi-continuous vertical to moderately dipping ore horizons that individually have continuity over tens to hundreds of metres and collectively can exceed a thousand metres. There are repeated zones of such mineralization along a 7 km strike length.

Great Panther recognizes the importance of the large, regional exploration tenement portfolio that it now controls. The portfolio covers a trend of approximately 90 km by 20 km covering an underexplored Proterozoic aged greenstone belt. The multiple gold deposits along the 7 km long Tucano sequence, demonstrate the gold potential within the Vila Nova Belt. Typically, Proterozoic or Archean greenstone belts with a significant proven deposit have a higher likelihood of additional deposits or mines. Most belts host a number of gold deposits, often of different size and styles of mineralization. When compared to other similar belts in the Guianas and West Africa, it is evident that the Vila Nova belt lacks the same level of exploration activity. While there is not always a direct correlation, between exploration and discovery, recent exploration activities carried out by Great Panther over the last 12 months, lead Great Panther to believe that the belt requires quality, focused exploration.

Regional programs announced in February 2020 included a re-evaluation of the historical data. The main product developed was an interpretation of the structural framework within the greenstone belt and definition of four deformation events and their relative timing. The combination of this interpretation with structural knowledge both in the mine and surrounding areas led to the identification of the key deformation events most likely associated with gold mineralization. These key structural events were mapped using the aerogeophysical data to define zones that potentially had higher probability to focus hydrothermal fluids. Combining this with interpreted lithology types allowed definition of corridors and targets with higher prospectivity, which are the base for the development of a focused exploration strategy and work program. This new strategy has identified four key pillars to exploration success on the Tucano tenement portfolio.

In 2020, exploration was focused on resource drilling with four diamond drills (“DD”) and a reverse circulation (“RC”) drill. In the first half of 2020, drilling was on the TAP AB deposits and in the second half of 2020 focus moved to Urucum North and Urucum East. In regional exploration two Final Exploration Reports fell due and work programs were focused on these two exploration licenses, Mutum and Saraminda. In both cases, programs of auger drilling have identified geochemically anomalous gold zones within the weathered zone. These have been followed up by RAB drilling and in December, two lines with five shallow diamond holes were drilled to evaluate the geology and mineralization potential at Mutum.

The 2021 exploration budget has been increased to $8.4 million with the objective of defining new targets through regional soil sampling, fast tracking prioritized targets within a 20 km radius of the mine, replacing mined resources, and confirmation and extension drilling of the higher-grade underground resource. In 2021, over 500 km of regional multi-element soil geochemistry will be carried out over the highly prospective exploration corridors defined in the third quarter of 2020. In parallel, an evaluation program to prioritize targets in the regional exploration area, that could provide ore to the Tucano plant, will be conducted with a view to fast-tracking one or two key targets. Near-mine resource drilling will initially focus on TAP C, between TAP AB and Urucum, as part of a 24,000 m near-mine resource definition program. At Urucum diamond drilling will be conducted on shallower (200-400 m deep) zones of higher-grade ore beneath Urucum pits, where 8,000 m is planned for 2021.

Auger, RAB, RC and DD methods have been employed at Tucano. Auger and RAB drilling are considered exploratory drilling methods used to evaluate early-stage exploration targets. The methods provide geochemical samples in the top 5 m to 30 m of the highly weathered lateritic profile to guide drill target definition. RC and DD drilling are deeper drilling methods and the preferred methods for obtaining gold grade information from known or high potential mineralization zones.

Drilling in 2020 initially focused on the TAP AB deposit with highlights presented in the Company’s June 23, 2020 press release. During the second half of 2020, resource drilling was focused on the testing potential mineralization within the shallow, down plunge extension of mineralization to the north of the Urucum North pit with two diamond drills and an additional two drills on infill resource drilling, and along strike evaluation, of the Urucum East mineralized zone. The drilling intersected various mineralization intervals confirming and extending the Urucum East deposit but failed to detect a sub-parallel ore zone to the west. Positive drill results were received from Urucum North and these are to be modelled to determine if further drilling is warranted and to evaluate the potential impact on the current resource, pit shell. In total, 32,471m of drilling was carried out in 2020. All drilling results up to September 30, 2020 were included in the Mineral Resource and Mineral Reserve estimate for 2020 and included in the Tucano Technical Report.

Great Panther abides by industry standards for the collection, analysis and quality assurance of the sampling processes, analysis procedures, and storage and use of the data. These are discussed in greater detail in the Tucano Technical Report. The company protocols ensure due care in the collection, logging, documentation and handling of samples whether from drilling or reconnaissance programs. (i.e., streams, soils, rock, auger and channel samples).

Sample preparation is carried out on site at Tucano where it has two, geographically separate, preparation facilities, one for mine grade control and the second exclusively for exploration samples, including those to be used in the long-term resource modelling. Sample preparation quality is monitored through the insertion of blank samples into the pulverization process while the laboratories are additionally monitored with the insertion of Reference Samples, duplicate field samples and duplicate lab preparation samples. Quality control samples represent approximately 10% of all samples analysed.

All mineralized samples that may be included in the Mineral Resource estimates and all multi-element geochemistry analyses are carried out by Certified laboratories in Belo Horizonte, Brazil either SGS or ALS.

Great Panther uses the Acquire database management system to maintain and manage all mineral resource and exploration data. Prior to data being accepted for upload into Acquire it passes through validation procedures. In the case of geochemistry data, all quality control samples must be within pre-defined industry standard quality assurance limits prior to being uploaded into the database. In the case of failures, samples are re-analysed, firstly using pulps retained by the laboratory or if required, duplicate samples generated during the preparation process and routinely stored on site.

The Mineral Resources for Tucano include contributions from four deposits as well as material contained within various stockpiles present throughout the property. The Mineral Resources from these four deposits are composed of mineralized material that is envisioned to be extracted by both open pit and underground mining methods. Gold mineralization is contained within oxidized lithologies as well as their fresh, un-weathered equivalents.

Updated grade-block models were prepared for the open pit component of the Urucum deposit, as well as the open pit and the underground component of the TAP AB deposit using drill hole, sample information, and topography that was current as of September 30, 2019. The underground component of the Mineral Resource estimate for the Urucum North deposit was prepared from a grade-block model that used the drill hole and sample information that was current as of November 2, 2015. Drilling completed since the 2015 was reviewed and in the qualified person’s opinion does not materially impact the Mineral Resource estimate.

Notes:

The Mineral Reserve estimate for Tucano conforms to the CIM Definition Standards as incorporated by reference into NI 43-101. To convert Mineral Resources to Mineral Reserves, the Qualified Person applied modifying factors of dilution and mineral extraction to only the Measured and Indicated categories of the Mineral Resource. Inferred Mineral Resources are not included in the Mineral Reserves. Tucano consists of both open pit and underground Mineral Resources for which Mineral Reserves have been independently estimated.

The Mineral Reserve estimate for Tucano is presented in the table below. The open pit estimate is based on the newly developed 2019 resource block models. This Mineral Reserve estimate includes open pit mining in Urucum, TAP AB, Urucum East, and Duckhead and underground mining in the Urucum deposit.

Notes:

The Mine is a mature open pit mining operation in a steady state of mining production. The operations are sufficiently established to provide the basis of much of the technical and economic inputs required for the Tucano Technical Report.

Individual pit shell selection was made based on a gold price of US$1,750/oz Au for UCS, US$1,500/oz for Urucum North, TAP AB 1, Duckhead and Urucum East; and US$1,600/oz for TAP AB 3. These pit shells selection was conducted using the July 31, 2020 surfaces. All pit shells are reported with the base price (US$1,500/oz).

The mine planning block models used for the mine design are based on 3-dimensional (“3D”) resource block models for the Tucano deposit and is based on the resource model regularized to the minimum practical size dig block (i.e., selective mining unit), that can be selectively excavated by mining equipment currently employed on site. Each block in the regularized model contains the quantities of diluted mineralized tonnes and grades including the tonnages of mining dilution and ore loss, where ore loss (%) = 100% - mining recovery (%).

Mining dilution comprises internal dilution inherited during the model regularization and external (contact) dilution resulting from geological/geometric contacts with waste rock.

Geotechnical and pit design parameters are based on data, information, and results from previous geotechnical studies and incorporate the pre-split drilling and controlled blasting. There is a risk that the failure to attain the design pit slopes could result in pit wall instability and the loss of ore at the pit bottom.

Several geotechnical assessments have been conducted on Tucano. The pit slope design parameters used in Tucano are based on the geotechnical recommendations from third party consultants as more particularly described in the Tucano Technical Report.

Pit Slope Design Parameters – Tucano

All pits have been designed with eight m operating bench heights. To maximize ore selectivity and minimize dilution, it is expected that ore will be mined on four m benches. The catch-berms in fresh rock are stacked at 24 m intervals (Urucum) and 20 m intervals (other pits).

The west wall of the UCS pit underwent slope displacement on October 6, 2019. The pit was closed to mining while Great Panther worked toward a remediation plan with the assistance of independent consulting firm Knight Piésold. The pit remains in Mineral Reserves.

Knight Piésold carried out geotechnical drilling and installed piezometers to record water pressures. Using the drilling data, KP modelled the failure mechanism. Failure was slip along an existing structure when the toe of the slope was blasted. A high phreatic level was seen as the main contributing factor that allowed the slip to initiate. There was movement toward the pit, but not a massive slope collapse. Mining of free diggable material commenced in July, 2020 and was suspended in September, 2020 while Knight Piésold completed its analyses. Mining of UCS restarted at 161 masl in late October, 2020 based on the results of geotechnical drilling and analyses performed to that point and the independent consultant provided recommendations regarding slope angles and mining from 161 masl to 111 masl. Draining the pit and monitoring of water levels in piezometer holes is being carried out as mining progresses, and any mining below 111 masl will be evaluated on the basis of whether further drainage is required using horizontal drain holes in order to continue mining safely. If further drainage is required, there is a risk that there may be interruptions of several days, every month or so, if Tucano is required to continue with horizontal drainage.

Mining is expected to be complete in the first quarter of 2022 presuming no disruption in mining activity.

A pit production schedule was generated with the objective of meeting a target ore processing rate of approximately 10,000 tpd at an average 93% annual plant availability. ROM quantities and plant feed estimates are based on Proven and Probable Mineral Reserves.

The ultimate pit designs plus stockpiles contain sufficient ROM quantities to support a 10,000 tpd processing rate through to mid-2023, but mining constraints reduce the rate of ore production so that the actual life of mine is to the end-2023. The open pit Mineral Reserves are included in six pits, with the three largest pits, UCS, Tap AB 1 and TAP AB 3 containing over 80% of the total open pit Mineral Reserves. Oxide ore contributes 57% of the total open pit ore mined. The LOM average strip ratio is 13.2:1. The waste rock dumps are located as close as practical to the open pits to minimize haul distances and haul truck cycle time for each pit phase, considering the pit waste disposal requirements, access road and facility layout, and geotechnical parameters.

The plant feed comprises the ROM ore from the pit and from the stockpiles. The pit ROM production is projected to be a direct feed to the crusher, complemented with the ROM from the stockpiles re-handled on as needed basis.

The contract-operated mining is carried out using conventional open pit methods, consisting of the following activities:

Open pit mining is currently being undertaken by a mine contractor U&M, one of the largest mining contractors in Brazil. The mining operations are based on the use of hydraulic excavators and a haul truck fleet engaged in conventional open pit mining techniques. Excavated material is loaded to trucks and hauled to either the ROM, ore stockpiles, or the waste dump.

The Company’s personnel monitor the mining contractor and provide engineering support including survey and grade control. The open pit is scheduled to operate 365 days per year, 24 hours per day and the U&M work schedule utilizes four crews working eight-hour shifts.

Equipment productivity and utilization factors and equipment operating hour estimates are based on seasonal conditions (dry, transitional, or wet season during the calendar year), rock type, and various mining conditions including different bench mining width and ramp width.

The mine manpower at the end of December 2020 is 1,471 employees. This includes Tucano and the contractor’s workforce. The ongoing pit operations will require this level of manpower for most of the next two years.

Tucano is expected to produce 110,000 to 120,000 ounces of gold in 2021. For more information, see the “Guidance and Outlook” section of the 2020 MD&A.

Operating costs from 2018 through 2020 are shown below.

Note:

The Company presents operating cost forecasts for its Tucano operations annually. For more information, see the “Guidance and Outlook” section of the 2020 MD&A.

Tucano is an operating open pit gold mine and the open pit capital costs reflect those required to maintain the operations during the LOM plan as set forth below.