VANCOUVER, British Columbia, July 20, 2007 (PRIME NEWSWIRE) -- Pan American Silver Corp. ("Pan American")(Nasdaq:PAAS), (TSX:PAA) has today filed with the applicable Canadian securities regulatory authorities on SEDAR a Technical Report dated effective June 6, 2007 (the "Technical Report") for a project to expand production capacity at its San Vicente silver-zinc mine located in the Department of Potosi, Bolivia (the "Project"). The Technical Report is available for viewing under the Company profile on SEDAR at www.sedar.com and on the Company's website at www.panamericansilver.com.
Although the San Vicente mine derives revenues from copper production, the Company concluded, in the course of preparing the Technical Report, that there is insufficient data at this time to include copper as a mineral reserve or resource. As a result, the economic model used in the Technical Report for the purposes of estimating the internal rate of return ("IRR") and capital payback for the Project does not incorporate revenues from anticipated copper production from the San Vicente mine. These revenues were originally included in estimates published in a press release issued by the Company on June 6, 2007.
Without incorporating any revenue from anticipated copper production, and using metal price assumptions of $9.00 per ounce silver and $2,100 per tonne zinc (other than for 2007 where $10.00 per ounce silver and $3000 per tonne zinc was assumed), the Technical Report concludes Pan American's 95% interest in the San Vicente mine will provide an undiscounted after-tax cash flow of $50.9 million, generate an IRR of 22% and have a capital payback of 2.9 years. The Project economics estimated in the Technical Report differ from those presented in the Company's June 6, 2007 press release, which included anticipated copper revenue based on a historical copper production head grade of 0.3%. The press release reported that Pan American's 95% interest in the San Vicente mine would provide an undiscounted after tax value of approximately $64.8 million, generate an IRR of 26% and have a capital payback of 2.6 years.
Using current silver and zinc prices, and taking into account opportunities to incorporate undefined copper mineralization at current prices, the IRR and capital payback period for the Project should improve considerably.
Investors should rely solely on the economic information contained in the Technical Report when assessing the viability of the Project for their investment purposes. The Technical Report is prescribed by National Instrument 43-101 ("NI 43-101") and includes a summary of the results of a number of engineering studies into the feasibility and economic returns of the Project, as well as information relating to the geology of the San Vicente property, the technical basis for the property's reserve and resource estimates, and the capital and operating cost estimates for construction of a new plant and expanded mining infrastructure. The Technical Report has been prepared by and under the supervision of Martin G. Wafforn, P. Eng., Michael Steinmann, P. Geo., and Douglas K. Maxwell, P.E., each of whom is a qualified person as the term is defined in NI 43-101.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS "FORWARD-LOOKING INFORMATION" WITHIN THE MEANING OF THE UNITED STATES "PRIVATE SECURITIES LITIGATION REFORM ACT" OF 1995 AND APPLICABLE CANADIAN SECURITIES LEGISLATION. STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION EXPRESS, AS AT THE DATE OF THIS PRESS RELEASE, THE COMPANY'S PLANS, ESTIMATES, FORECASTS, PROJECTIONS, EXPECTATIONS, OR BELIEFS AS TO FUTURE EVENTS OR RESULTS AND THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE SUCH STATEMENTS CONTAINING THE FORWARD-LOOKING INFORMATION. GENERALLY, FORWARD-LOOKING INFORMATION CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "PLANS", "PROJECTS" OR "PROJECTED", "EXPECTS" OR "DOES NOT EXPECT", "IS EXPECTED", "ESTIMATES", "FORECASTS", "SCHEDULED", "INTENDS", "ANTICIPATES" OR "DOES NOT ANTICIPATE", OR "BELIEVES", OR VARIATIONS OF SUCH WORDS AND PHRASES, OR STATEMENTS THAT CERTAIN ACTIONS, EVENTS OR RESULTS "MAY", "CAN", "COULD", "WOULD", "SHOULD", "MIGHT" OR "WILL BE TAKEN", "OCCUR" OR "BE ACHIEVED". STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS WITH RESPECT TO INTENDED EXPANSION PLANS AT SAN VICENTE, INCLUDING ESTIMATED CONSTRUCTION, MINING AND PRODUCTION SCHEDULES, THE ANTICIPATED CAPITAL AND ECONOMIC RETURNS OF SAN VICENTE, THE ACCURACY OF MINERAL RESERVE AND RESOURCE ESTIMATES AND ESTIMATES OF ANTICIPATED SILVER AND GOLD PRODUCTION FROM SAN VICENTE.
STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, LEVEL OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS OF PAN AMERICAN AND ITS OPERATIONS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, POLITICAL RISKS RELATING TO OPERATING IN BOLIVIA, INCLUDING RISKS RELATED TO THE EXPROPRIATION OF ASSETS, CHANGES IN LOCAL GOVERNMENT LEGISLATION, LABOUR UNREST, ROAD BLOCKAGES, TAX INCREASES, THE FAILURE TO OBTAIN NECESSARY APPROVALS AND PERMITS FROM GOVERNMENTAL AUTHORITIES; RISKS RELATED TO THE ABILITY TO HIRE AND RETAIN EXPERIENCED SUPERVISORY STAFF, PARTICULARLY IN REMOTE LOCATIONS SUCH AS SAN VICENTE AND IN THE CURRENT COMPETITIVE ENVIRONMENT. FURTHER RISKS ARE RELATED TO THE TECHNOLOGICAL AND OPERATIONAL NATURE OF THE COMPANY'S BUSINESS, EXPOSURE TO FLUCTUATIONS IN THE LOCAL CURRENCY IN BOLIVIA, THE ACTUAL RESULTS OF CURRENT EXPLORATION ACTIVITIES, THE FUTURE PRICES OF SILVER, GOLD AND BASE METALS, INCREASED COMPETITION IN THE MINING INDUSTRY FOR PROPERTIES, EQUIPMENT, QUALIFIED PERSONNEL, AND THEIR RISING COSTS, FLUCTUATIONS IN THE PRICE FOR NATURAL GAS, FUEL OIL AND OTHER KEY SUPPLIES, AS WELL AS THOSE FACTORS DESCRIBED IN THE SECTION "RISKS RELATED TO PAN AMERICAN'S BUSINESS" CONTAINED IN THE COMPANY'S MOST RECENT FORM 40F/ANNUAL INFORMATION FORM FILED WITH THE SEC AND CANADIAN PROVINCIAL SECURITIES REGULATORY AUTHORITIES. ALTHOUGH THE COMPANY HAS ATTEMPTED TO IDENTIFY IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN FORWARD-LOOKING STATEMENTS, THERE MAY BE OTHER FACTORS THAT CAUSE RESULTS TO BE MATERIALLY DIFFERENT FROM THOSE ANTICIPATED, DESCRIBED, ESTIMATED, ASSESSED OR INTENDED. 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 IN SUCH STATEMENTS. ACCORDINGLY, READERS SHOULD NOT PLACE UNDUE RELIANCE ON STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION.