Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Pan American Silver Corp (PAA-T) -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (338)	3/7/2000 12:30:00 AM
From: The Vet	Read Replies (1) \| Respond to of 358

Maybe Russia is not so critical now? FOR: PAN AMERICAN SILVER CORP. TSE SYMBOL: PAA NASDAQ SYMBOL: PAAS MARCH 6, 2000 Pan American Acquires Majority of Huaron Silver Mine in Peru VANCOUVER, BRITISH COLUMBIA--Pan American Silver Corp. (TSE: PAA; NASDAQ: PAAS) announces that it is today acquiring 71.8% of Compania Minera Huaron S.A., a Peruvian corporation, which owns 100% of the Huaron mine in central Peru, with mineral rights covering 80,000 hectares of ground. Huaron is a major silver-zinc vein deposit. It is located 300 km northeast of Lima in the heart of the Cerro de Pasco mining district, one of Peru's most important, which contains 12 large producing mines and the La Oroya lead-copper smelter. Since 1912 the Huaron mine has produced 22 million tonnes of ore from 70 known veins resulting in silver production of over 220 million ounces. In April 1998, operations ceased at Huaron due to accidental flooding of a portion of its underground workings by a neighboring mine. Mine dewatering at Huaron is nearly complete. Huaron's mineral resources, as calculated by its mine staff when operations ceased, were 13 million tonnes grading 239 g/t silver, 4.0% zinc, 2.2% lead and 0.5% copper (103 million ounces of silver). These resource calculations have not been subject to independent verification or verification by a qualified person, however, Pan American has performed a detailed audit on approximately 20% of the Huaron resource calculations (Qualified Person: John Wright, President and Chief Operating Officer) which confirmed these calculations. Pan American intends to use the existing infrastructure to place the Huaron mine back into operation by the end of 2000. Planned production will be 600,000 tonnes of ore per year, yielding average annual production of 4.3 million ounces of silver and 18,000 tonnes of zinc. An extended mine life is probable since all veins are open to depth. All permitting is in place for development and resumed production. Capital costs, including working capital, are estimated at $10.1 million, which will be funded from the Company's available capital sources. Forecast cash operating costs, net of by-product credits, are $3.24 per ounce of silver produced at Huaron, and forecast production costs are $3.60 per ounce. Pan American is acquiring its stake in Huaron for 1,780,389 Pan American common shares, and certain post-closing adjustments by way of cash payments which may be in favor of either the sellers or Pan American. The shares carry a four-month hold period. A 2.16% net smelter return royalty will become payable to the sellers after the first 4.3 million tonnes of production. In addition, 700,000 ten-year Pan American stock options, at a $4.00 exercise price, will be granted to a representative of the sellers who will remain active in the affairs of Huaron, subject to regulatory approval and approval by Pan American shareholders of an increase in the number of shares available under its stock option plan to 10% of the Company's currently issued shares. Production from Huaron could nearly double Pan American's Peruvian silver production in 2001 from 3.5 million ounces to almost 7 million ounces. In addition, the Huaron acquisition will result in management synergies and reduced administration costs at Pan American's Quiruvilca mine in northern Peru, since both mines are similar sized underground silver-zinc operations that produce concentrates from similar processing facilities. Pan American Silver Corp. is a mining company focused exclusively on silver. In 1999, the Company produced 3.24 million ounces of silver from its Quiruvilca mine in Peru and continued development of new silver mines in Mexico and Russia. These development projects, in addition to Huaron in Peru, should add significantly to the Company's near-term silver production. Pan American now controls over 930 million ounces of silver in reserves and resources and maintains active exploration programs in Bolivia, Peru and Mexico. The Company is in good financial condition with $15.7 million in working capital (as at Jan. 31, 2000), no debt and positive cash flow from its Quiruvilca mine. The statements that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties that could cause actual results to vary materially from the targeted results. Such risks and uncertainties include those described in the Company's Form 40-F as amended. All amounts are expressed in U.S. dollars.