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Gold/Mining/Energy : PAAS : Pan American Silver -- Ignore unavailable to you. Want to Upgrade?

To: Al Collard who wrote (241)	6/17/2002 11:47:59 AM
From: Al Collard	Respond to of 294

Pan American completes loan and begins construction on La Colorada expansion VANCOUVER, June 17 /CNW/ - (all currency amounts in US dollars)... Pan American Silver Corp. (NASDAQ: PAAS; TSE: PAA) is pleased to announce the start of construction to quadruple production at its La Colorada silver mine in Mexico. This follows the signing of a $10 million project debt facility with International Finance Corporation (IFC), the private sector lending arm of the World Bank. The project's total capital costs are estimated at about $20 million and Pan American will fund the remaining capital from its cash on hand, currently totaling $18.7 million. Pan American will provide a corporate guarantee for the loan until financial completion, expected by mid 2004, and will repay the loan with semi-annual $1 million installments starting in November 2004. The loan agreement does not require Pan American to hedge any silver production. The increase in La Colorada's production should begin early in the third quarter of 2003, raising Pan American's consolidated silver output from all three mines to about 11 million ounces per year. Pan American acquired La Colorada in March 1998. The bankable feasibility study, completed in late 2000, defines total proven and probable reserves of 2.7 million tonnes of ore grading 458 grams of silver per tonne and 0.53 grams of gold per tonne. In early 2001, a small-scale mine was started at La Colorada and has produced over 1.1 million ounces of silver to date. This mine uses the existing mill to produce concentrates from sulfide ore and is currently operating at a rate of 200 tonnes per day. The expansion project will add a 600 tonne per day leach circuit to process oxide ore and will bring the mine's total production rate to 800 tonnes per day. Production from the expanded operation is expected to average 3.2 million ounces of silver per year at a total cash cost of less than $2.70 per ounce for a 13 year mine life. Pan American acquired ground covering a surface extension of the known oxide ore in 2001 and plans to drill test the zone in the second half of 2002. This zone and other targets on La Colorada provide excellent opportunities to extend the mine's life. CAUTIONARY NOTE Some of the statements in this news release are forward-looking statements, such as estimates of future production levels, expectations regarding mine production costs, expected trends in mineral prices and statements that describe Pan American's future plans, objectives or goals. Actual results and developments may differ materially from those contemplated by these statements depending on such factors as changes in general economic conditions and financial markets, changes in prices for silver and other metals, technological and operational hazards in Pan American's mining and mine development activities, uncertainties inherent in the calculation of mineral reserves, mineral resources and metal recoveries, the timing and availability of financing, governmental and other approvals, political unrest or instability in countries where Pan American is active, labor relations and other risk factors listed from time to time in Pan American's Form 40-F.