For
Immediate Release
February
20, 2008
PAN
AMERICAN SILVER INCREASES ESTIMATED PROVEN AND PROBABLE SILVER RESERVES TO 228
MILLION OUNCES
Vancouver, British Columbia – February 20, 2008 – Pan
American Silver Corp.
(PAAS: NASDAQ; PAA: TSX) is pleased to announce the results of its 2007
year-end silver reserve and resource estimate.
In addition to replacing 100% of the 20.8 million ounces
of contained silver that were mined during 2007, the Company added new proven
and probable silver reserves of 14.5 million ounces and increased measured and indicated
silver resources by another 4.9 million ounces.
“Once again, we have not only replaced what we
mined, but have meaningfully added to our proven and probable silver reserves,”
said Geoff Burns, President and CEO.
“In the last two years we have discovered, upgraded and added through
acquisitions of joint venture interests over 86 million ounces of silver,
before considering ore mined. In anyone’s book, this represents
significant value creation.”
Reserve increases were driven by the Huaron, Morococha
and San Vicente mines where net estimated proven and probable silver reserves
rose 7.6 million ounces, 3.8 million ounces and 11.5 million ounces,
respectively. At Morococha, proven and probable silver reserves have tripled
since Pan American acquired the operation in mid-2004.
The following represents the changes in the
Company’s estimated silver reserves, year over year:
Proven and probable silver reserves, as at January 1,
2007 213.3 million ounces
Less: mined ounces (contained) during 2007 (20.8)
Discovered or acquired ounces during 2007
35.3
----------------------------------------------------------------------- -------
Proven and probable silver reserves, as at January 1,
2008 227.8 million ounces
Pan American has focused much of its exploration efforts
over the past two years on its portfolio of operating properties. In 2007, the
Company drilled over 95,000 meters, almost exclusively at its existing mines. The
full results of the Company’s 2007 drilling programs have been
incorporated into the year-end silver reserve and resource estimate.
In 2008, the Company plans another plus 90,000 meter
exploration drilling program and while much of this effort will again be
focused on increasing proven and probable reserves at operating mines, it will
also include for the first time in many years testing of a number of newly
acquired, highly prospective greenfield projects
in Peru and Mexico.
Mr. Burns commented: “I am very excited about our greenfield exploration plan in 2008 and hope
we will be able to announce a significant new silver discovery by this time
next year.”
Complete
reserve and resource information for all metals, including tonnage, grade and
accompanying metal price assumptions is available at www.panamericansilver.com.
Complete silver reserve and resource information are as follows:
Notes:
The table illustrates Pan American’s share of estimated silver reserves
and resources for each property. Pan American’s interest in properties
which are not wholly-owned are noted next to the property name.
Silver
resources are exclusive or silver reserves.
The
silver reserve and resource estimates are prepared in accordance with the Canadian
Institute of Mining (“CIM”) Definition Standards On Mineral
Resources and Mineral Reserves, adopted by CIM Council on November 14, 2004,
and the CIM Estimation of Mineral Resources and Mineral Reserves Best Practice
Guidelines, adopted by CIM Council on November 23, 2003, using geostatistical
and/or classical methods, plus economic and mining parameters appropriate to
each project. You will find the definitions and guidelines at www.cim.org.
Silver
resource and reserve estimates for Huaron, Quiruvilca, San Vicente, La
Colorada, Manantial Espejo, Alamo Dorado and Morococha were prepared under the
supervision of, or were reviewed by Michael Steinmann, P.Geo., Senior Vice
President Geology & Exploration and Martin G. Wafforn, P.Eng., Vice
President Mine Engineering as Qualified Persons (“QPs”) as that
term is defined in National Instrument 43-101 (“NI 43-101”). They
have also reviewed and approved the contents of this press release. Silver reserve
and resource estimates for Silver Stockpiles were prepared in previous years by
other Qualified Persons, and are based on 2006 silver reserve and resource
estimates adjusted for 2007 production where applicable. Estimates for Hog
Heaven and Waterloo
are based on historical third party estimates.
Metal
Prices Used for all Mines (except Manantial Espejo) are: Ag: $11.00/oz, Au:
$625/0z, Pb: $1,600/Tonne, Cu: $6,000/Tonne, Zn: $2,100/Tonne. Metal Prices
Used for Manantial Espejo are: Ag: $9.00/oz, Au: $525/0z, Pb: $1,000/Tonne,
Cu: $5,000/Tonne, Zn: $2,100/Tonne
Varyingcut-off values have been used depending on the mine and type of ore contained
in the silver reserves. Pan American’s normal data verification
procedures have been employed in connection with the calculations. Silver
resources have been estimated using varying cut-off values, depending on both
the type of mine or project, its maturity and ore types at each property.
There
are no known environmental, permitting, legal, taxation, political or other
relevant issues that would materially affect the estimates of the silver
reserves and resources at any of Pan American’s properties.
Silver
resources do not have demonstrated economic viability.
(i) The
historical estimate for Hog Heaven was calculated by Gregory Hahn, Chief
Geological Engineer for CoCa Mines Inc., a previous owner of the property, in a
report titled “Hog Heaven Project Optimization Study” dated May
1989, prior to implementation of NI 43-101. The historical estimate was based
on extensive diamond drilling, and was calculated using a silver price of $6.50
per ounce and a gold price of $400 per ounce (these were relevant prices at the
time of the calculation). Michael Steinmann, P.Geo., QP for the Company, has
reviewed the available data, including drill sections, surface maps, and
additional supporting information sources, and believes that the historic
calculation was conducted in a professional and competent manner and is
relevant for the purposes of the Company's decision to maintain its interest in
this property. In the study, the historic estimate was sub-categorized as
follows:
However,
the Company has not completed the work necessary to verify the historical
estimate. Accordingly, the Company is not treating the historical estimate as
NI 43-101 compliant categories of mineral resources based on information
prepared by or under the supervision of a QP. These historical estimates should
not be relied upon.
(ii)
The Company believes that the historical estimate category of "proven
reserves" for Hog Heaven most closely corresponds to 2,705,000 tonnes in
the NI 43-101 category of "indicated resources".
(iii)
The Company believes that the historical estimate categories of "proven
& possible reserves", "heap leach ore stockpile",
"possible resources" and "inferred resources" most closely
correspond to 7,639,000 tonnes in the NI 43-101 category of "inferred resources."
(iv)
The historical estimate for Waterloo
was initially calculated by Asarco Inc. in 1968. In September 1994 Robert J.
Rodger, P.Eng., reviewed
the Asarco reports and prepared a Technical Evaluation Report on the Waterloo
property, prior to the implementation of NI 43-101. The Technical Evaluation
Report confirmed that the historical estimate was based on reverse circulation
drilling and underground sampling, and concluded the estimate was based on
sound methodology. The historical estimate at Waterloo was calculated using a silver price
of $5.00 per ounce (the relevant price at the time of the calculation).
Michael Steinmann, P.Geo., QP for the Company, has reviewed the Technical
Evaluation Report and believes the historic calculation was conducted in a
professional and competent manner and is relevant for purposes of the Company's
decision to maintain its interest in the property. The Company believes that
the historical estimate category of 37,235,000 tons (at 2.71 ounces per ton silver)
of "measured and indicated reserves" most closely correspond to
33,758,000 tonnes in the NI 43-101 category of "indicated resource." However,
the Company has not completed the work necessary to verify the historical
estimate. Accordingly, the Company is not treating the historical estimate as
NI 43-101 compliant categories of mineral resources based on information
prepared by or under the supervision of a QP. These historical estimates
should not be relied upon.
Pan
American’s estimated silver reserve and resources are forward-looking
information within the meaning of the Private Securities Litigation Reform Act
of 1995 and applicable Canadian securities laws as they constitute a prediction
based on certain estimates and assumptions as to the mineralization that would
be encountered if a deposit is developed and mined. Material factors that
could cause Pan American’s actual results to differ materially from these
estimates include: technological and operational challenges to Pan
American’s mines and mine development projects; changes in local
legislation or taxation or the local political or economic environment; changes
in mine or development project parameters to deal with unanticipated economic
factors; future prices of silver; increased competition in the mining industry
for equipment and qualified personnel, and their rising costs; unexpected work
stoppage or labour disputes; fluctuations in the price for natural gas, fuel
oil and other key supplies; and unpredictable risks and hazards relating to the
operation and development of Pan American’s mines. Material assumptions
that were applied in estimating Pan American‘s silver reserves and
resources are set out in the notes to the table above.
There
can be no assurance that any statements containing forward-looking information
will prove to be accurate as actual results and future events could differ
materially from those anticipated or assumed in such forward-looking
information. Accordingly, readers should not place undue reliance on
statements containing forward-looking information.
Pan American does not intend, and does not assume any
obligation, to update these forward-looking statements to reflect changes in
assumptions or changes in circumstances or any other events affecting such
statements, other than as required by applicable law.
About Pan American Silver
Pan
American Silver’s mission is to be the world’s largest and lowest
cost primary silver mining company, and to achieve this by increasing its low
cost silver production and its silver reserves. The Company has seven
operating silver mines in Mexico,
Peru and Bolivia. An
eighth mine in Argentina
is scheduled to commence operations late in the second quarter of 2008.
CAUTIONARY NOTE TO US INVESTORS
CONCERNING ESTIMATES OF MEASURED, INDICATED AND INFERRED RESOURCES
This press release uses the terms “measured resources”,
“indicated resources” and “inferred resources”. United States investors are advised that, while
such terms are recognized and required by Canadian securities laws, the United States
Securities and Exchange Commission (the “SEC”) does not recognize
them. Under United States
standards, mineralization may not be classified as a “reserve”
unless the determination has been made that the mineralization could be
economically and legally produced or extracted at the time the reserve
determination is made. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. United States investors are
cautioned not to assume that all or any part of measured or indicated resources
will ever be converted into reserves.
Inferred resources are in addition to measured and
indicated resources. Further, inferred resources have a great amount of
uncertainty as to their existence and as to whether they can be mined legally
or economically. It cannot be assumed that all or any part of an inferred
resource will ever be upgraded to a higher category. Therefore, United States
investors are also cautioned not to assume that all or any part of the
Company’s inferred resources exist, or that hey can be mined legally or
economically.
Disclosure of “contained ounces” is permitted
disclosure under Canadian securities laws, however, the United States Securities
and Exchange Commission (‘SEC”) normally only permits issuers to
report “resources” as in place tonnage and grade without reference
to unit measures. Accordingly, information concerning descriptions of
mineralization and resources contained in this release may not be comparable to
information made public by United
States companies subject to the reporting
and disclosure requirements of
the SEC.
For
more information, please contact Rob Doyle,
Chief Financial Officer at 604-684-1175 or e-mail Pan American at
info@panamericansilver.com.
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