Denver Gold Show September 24, 2013

Transcription

1 Denver Gold Show September 24, 2013

2 Cautionary Notes CAUTIONARY NOTE REGARDING NON IFRS MEASURE CASH COSTS PER OUNCE THIS PRESENTATION PRESENTS INFORMATION ABOUT OUR CASH COSTS OF PRODUCTION OF AN OUNCE OF SILVER FOR OUR OPERATING MINES. CASH COSTS PER OUNCE PRODUCED IS CALCULATED AS FOLLOWS: EXCEPT AS OTHERWISE NOTED, CASH COSTS PER OUNCE PRODUCED IS CALCULATED BY DIVIDING TOTAL CASH COSTS BY TOTAL SILVER OUNCES PRODUCED AT THE RELEVANT MINE OR MINES TOTAL CASH COSTS INCLUDE MINE OPERATING COSTS SUCH AS MINING, PROCESSING, ADMINISTRATION, ROYALTIES AND OPERATING TAXES, BUT EXCLUDE AMORTIZATION, RECLAMATION COSTS, FINANCING COSTS AND CAPITAL DEVELOPMENT AND EXPLORATION. CERTAIN AMOUNTS OF STOCK BASED COMPENSATION ARE EXCLUDED AS WELL CASH COST PER OUNCE OF SILVER PRODUCED IS INCLUDED IN THIS PRESENTATION BECAUSE CERTAIN INVESTORS USE THIS INFORMATION TO ASSESS OUR PERFORMANCE AND ALSO TO DETERMINE OUR ABILITY TO GENERATE CASH FLOW FOR USE IN INVESTING AND OTHER ACTIVITIES. THE INCLUSION OF CASH COSTS PER OUNCE PRODUCED MAY ENABLE INVESTORS TO BETTER UNDERSTAND YEAR OVER YEAR CHANGES IN OUR PRODUCTION COSTS, WHICH IN TURN AFFECT PROFITABILITY AND CASH FLOW. CASH COSTS PER OUNCE PRODUCED DOES NOT HAVE A STANDARDIZED MEANING OR A CONSISTENT BASIS OF CALCULATION PRESCRIBED BY CANADIAN ACCOUNTING STANDARDS. INVESTORS ARE CAUTIONED THAT CASH COSTS PER OUNCE PRODUCED SHOULD NOT BE CONSIDERED IN ISOLATION OR CONSTRUED AS A SUBSTITUTE TO COSTS DETERMINED IN ACCORDANCE WITH CANADIAN ACCOUNTING STANDARDS AS PRESCRIBED UNDER IFRS AS AN INDICATOR OF PERFORMANCE. OUR METHOD OF CALCULATING CASH COSTS PER OUNCE PRODUCED MAY DIFFER FROM THE METHODS USED BY OTHER ENTITIES AND, ACCORDINGLY, OUR CASH COSTS PER OUNCE PRODUCED MAY NOT BE COMPARABLE TO SIMILARLY TITLED MEASURES USED BY OTHER ENTITIES. SEE OUR MD&A FOR THE YEAR ENDED DECEMBER 31, 2012 FILED ON SEDAR AT FOR A RECONCILIATION OF CASH COSTS PER OUNCE PRODUCED TO THE MOST DIRECTLY COMPARABLE ACCOUNTING MEASURE UNDER IFRS. CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS CERTAIN OF THE STATEMENTS AND INFORMATION IN THIS PRESENTATION CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FORWARD LOOKING INFORMATION WITHIN THE MEANING OF APPLICABLE CANADIAN PROVINCIAL SECURITIES LAWS. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT, ARE FORWARD LOOKING STATEMENTS. WHEN USED IN THIS PRESENTATION THE WORDS, BELIEVES, EXPECTS, INTENDS, PLANS, FORECAST, OBJECTIVE, OUTLOOK, POSITIONING, POTENTIAL, ANTICIPATED, BUDGET, AND OTHER SIMILAR WORDS AND EXPRESSIONS, IDENTIFY FORWARD LOOKING STATEMENTS OR INFORMATION. THESE FORWARD LOOKING STATEMENTS OR INFORMATION RELATE TO, AMONG OTHER THINGS: FUTURE PRODUCTION OF SILVER, GOLD AND OTHER METALS AND THE TIMING OF SUCH PRODUCTION; FUTURE CASH COSTS PER OUNCE OF SILVER; THE PRICE OF SILVER AND OTHER METALS; THE EFFECTS OF LAWS, REGULATIONS AND GOVERNMENT POLICIES AFFECTING PAN AMERICAN S OPERATIONS OR POTENTIAL FUTURE OPERATIONS INCLUDING,BUT NOT LIMITED TO RECENT PROPOSED CHANGES TO THE LAWS IN MEXICO RELATING TO A NEW MINING ROYALTY; THE CONTINUING NATURE OF HIGH INFLATION, RISING CAPITAL AND OPERATING COSTS, CAPITAL RESTRICTIONS AND RISKS OF EXPROPRIATION IN ARGENTINA AND, IN PARTICULAR, IN THE PROVINCE OF CHUBUT AND THEIR EFFECTS ON THE COMPANY AND ITS ASSETS; THE TIMING OF PRODUCTION AND THE CASH AND TOTAL COSTS OF PRODUCTION AT EACH OF THE COMPANY S PROPERTIES; THE SUFFICIENCY OF THE COMPANY S CURRENT WORKING CAPITAL, ANTICIPATED OPERATING CASH FLOW OR ITS ABILITY TO RAISE NECESSARY FUNDS; THE ABILITY OF THE COMPANY TO ACHIEVE ANY PLANNED EXPANSIONS AND DEVELOPMENT, INCLUDING BUT NOT LIMITED TO, POTENTIAL OPPORTUNITIES AT THE DOLORES MINE IN CONNECTION WITH THE PULP AGGLOMERATION PROJECT AND EXPANSION OF THE LA COLORADA MINE, THE TIMING FOR THE SAME AND THE EXPECTED RESULTS OF ANY SUCH OPPORTUNITIES OR EXPANSIONS; THE ABILITY OF THE COMPANY TO REDUCE CAPITAL COSTS AND THE EFFECTS OF SUCH REDUCTION MEASURES ON THE COMPANY; THE ESTIMATES OF EXPECTED OR ANTICIPATED ECONOMIC RETURNS FROM THE COMPANY S MINING PROJECTS; FORECAST CAPITAL AND NON OPERATING SPENDING; FUTURE SALES OF THE METALS, CONCENTRATES OR OTHER PRODUCTS PRODUCED BY THE COMPANY; AND THE COMPANY S PLANS ANDEXPECTATIONS FOR ITS PROPERTIES AND OPERATIONS. THESE STATEMENTS REFLECT THE COMPANY S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE NECESSARILY BASED UPON A NUMBER OF ASSUMPTIONS AND ESTIMATES THAT, WHILE CONSIDERED REASONABLE BY THE COMPANY, ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, COMPETITIVE, POLITICAL AND SOCIAL UNCERTAINTIES AND CONTINGENCIES. MANY FACTORS, BOTH KNOWN AND UNKNOWN, COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT ARE OR MAY BE EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS CONTAINED IN THIS NEWS RELEASE AND THE COMPANY HAS MADE ASSUMPTIONS AND ESTIMATES BASED ON OR RELATED TO MANY OF THESE FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION: FLUCTUATIONS IN SPOT AND FORWARD MARKETS FOR SILVER, GOLD, BASE METALS AND CERTAIN OTHER COMMODITIES (SUCH AS NATURAL GAS, FUEL OIL AND ELECTRICITY); FLUCTUATIONS IN CURRENCY MARKETS (SUCH AS THE CANADIAN DOLLAR, PERUVIAN SOL, MEXICAN PESO, ARGENTINE PESO AND BOLIVIAN BOLIVIANO VERSUS THE U.S. DOLLAR); RISKS RELATED TO THE TECHNOLOGICAL AND OPERATIONAL NATURE OF THE COMPANY S BUSINESS; CHANGES IN NATIONAL AND LOCAL GOVERNMENT, LEGISLATION, TAXATION, CONTROLS OR REGULATIONS INCLUDING AMONG OTHERS, CHANGES TO IMPORT AND EXPORT REGULATIONS AND LAWS RELATING TO THE REPATRIATION OF CAPITAL AND FOREIGN CURRENCY CONTROLS; POLITICAL OR ECONOMIC DEVELOPMENTS IN CANADA, THE UNITED STATES, MEXICO, PERU, ARGENTINA, BOLIVIA OR OTHER COUNTRIES WHERE THE COMPANY MAY CARRY ON BUSINESS IN THE FUTURE; RISKS AND HAZARDS ASSOCIATED WITH THE BUSINESS OF MINERAL EXPLORATION, DEVELOPMENT AND MINING (INCLUDING ENVIRONMENTAL HAZARDS, INDUSTRIAL ACCIDENTS, UNUSUAL OR UNEXPECTED GEOLOGICAL OR STRUCTURAL FORMATIONS, PRESSURES, CAVE INS AND FLOODING); RISKS RELATING TO THE CREDIT WORTHINESS OR FINANCIAL CONDITION OF SUPPLIERS, REFINERS AND OTHER PARTIES WITH WHOM THE COMPANY DOES BUSINESS; INADEQUATE INSURANCE, OR INABILITY TO OBTAIN INSURANCE, TO COVER THESE RISKS AND HAZARDS; EMPLOYEE RELATIONS AND THE EFFECTS OF LABOUR LAWS IN THOSE COUNTRIES IN WHICH THE COMPANY OPERATES; RELATIONSHIPS WITH AND CLAIMS BY LOCAL COMMUNITIES AND INDIGENOUS POPULATIONS; AVAILABILITY AND INCREASING COSTS ASSOCIATED WITH MINING INPUTS AND LABOUR; THE SPECULATIVE NATURE OF MINERAL EXPLORATION AND DEVELOPMENT, INCLUDING THE RISKS OF OBTAINING NECESSARY LICENSES AND PERMITS AND THE PRESENCE OF LAWS AND REGULATIONS THAT MAY IMPOSE RESTRICTIONS ON MINING, INCLUDING THOSE CURRENTLY IN THE PROVINCE OF CHUBUT, ARGENTINA; DIMINISHING QUANTITIES OR GRADES OF MINERAL RESERVES AS PROPERTIES ARE MINED; GLOBAL FINANCIAL CONDITIONS; THE COMPANY S ABILITY TO COMPLETE AND SUCCESSFULLY INTEGRATE ACQUISITIONS AND TO MITIGATE OTHER BUSINESS COMBINATION RISKS; CHALLENGES TO, OR DIFFICULTY IN MAINTAINING, THE COMPANY S TITLE TO PROPERTIES AND CONTINUED OWNERSHIP THEREOF; THE ACTUAL RESULTS OF CURRENT EXPLORATION ACTIVITIES, CONCLUSIONS OF ECONOMIC EVALUATIONS, AND CHANGES IN PROJECT PARAMETERS TO DEAL WITH UNANTICIPATED ECONOMIC OR OTHER FACTORS; INCREASED COMPETITION IN THE MINING INDUSTRY FOR PROPERTIES, EQUIPMENT, QUALIFIED PERSONNEL, AND THEIR COSTS; AND THOSE FACTORS IDENTIFIED UNDER THE CAPTION RISKS RELATED TO PAN AMERICAN S BUSINESS IN THE COMPANY S MOST RECENT FORM 40 F AND ANNUAL INFORMATION FORM FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND CANADIAN PROVINCIAL SECURITIES REGULATORY AUTHORITIES. INVESTORS ARE CAUTIONED AGAINST ATTRIBUTING UNDUE CERTAINTY OR RELIANCE ON FORWARD LOOKING STATEMENTS. ALTHOUGH THE COMPANY HAS ATTEMPTED TO IDENTIFY IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY, THERE MAY BE OTHER FACTORS THAT CAUSE RESULTS NOT TO BE AS ANTICIPATED, ESTIMATED, DESCRIBED OR INTENDED. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE THESE FORWARD LOOKING STATEMENTS OR INFORMATION TO REFLECT CHANGES IN ASSUMPTIONS OR CHANGES IN CIRCUMSTANCES OR ANY OTHER EVENTS AFFECTING SUCH STATEMENTS OR INFORMATION, OTHER THAN AS REQUIRED BY APPLICABLE LAW. 2

3 Geographically Diversified Assets 3

4 Q Consolidated Results (1) Operational Highlights Q H Silver produced 6.2 Moz 12.5 Moz Gold produced 29.9 Koz 62 Koz Consolidated cash costs (2) $12.09/Ag oz $11.71/Ag oz H Ag production slightly behind plan. H Au production below plan due to operational issues at Dolores and Manantial Espejo, which have been resolved. H1 cash costs below 2013 guidance of $11.80 $12.80/Ag oz. 1) All amounts in US dollars unless otherwise stated and all production figures approximate 2) Net of by product credits. Realized prices: Au $1,423/oz, Zn $1,841/tonne, Pb $2,049, Cu $7,127 4

5 Q Production Mine Ag Production Au Production Cash Costs (1) La Colorada 1.2 Moz 0.7 Koz $10.65/oz Ag Alamo Dorado 1.3 Moz 3.9 Koz $7.25/oz Dolores 0.8 Moz 13.5 Koz $1.82/oz Huaron 0.8 Moz 0.2 Koz $17.29/oz Morococha (92.2%) 0.6 Moz 0.6 Koz $20.88/oz San Vicente (95%) 0.9 Moz $16.04/oz Manantial Espejo 0.7 Moz 11 Koz $18.86/oz 6.2 Moz 29.9 Koz $12.09/oz Realized prices: Ag $22.68/oz, Au $1,423/oz, Zn $1,841/tonne, Pb $2,049/tonne, Cu $7,127/tonne. (1) Per ounce of silver, net of by product credits 5

6 Q Operational Highlights Solid operating performance at Alamo Dorado, La Colorada, Huaron, Morococha and San Vicente. Mexican operations contributed 53% of consolidated Ag production and 60% of consolidated Au production. Improved production efficiencies and costs savings measures reduced cash costs to more than offset lower by product metal prices Ag production slightly behind plan: Lower production at Dolores due to delayed completion of leach pad 2 extension (extension now completed and loading/leaching in process). Lower production at Manantial Espejo due to spare parts import restrictions and lower grades (Ag and Au grades improving to planned levels). 6

7 Q Financial Results Financial Highlights Q H Mine operating earnings $3.8 M $78.6 M Adjusted (loss)/earnings* ($9.9 M) $31.3 M Adjusted (loss) earnings per share ($0.07) $0.21 Operating cash flows before interest and income taxes $23.7 M $101.3 M Cash & short term investments Net working capital Debt (excluding capital leases) $440.2 M $701.1 M $61.6 M * Excludes $184.7 million impairment charge for Dolores goodwill. 7

8 2H Forecast Expect to achieve 2013 guidance of 25 to 26 Moz Ag. Expect to achieve cash costs of $11.80 $12.80 per Ag oz, net of by product credits, in spite of lower by product credits (at Au $1,200/oz, Zn $1,925/tonne, Pb $1,975/tonne, Cu $7,800 tonne). Lowered Au production forecast by 10% to 125 Koz to 135 Koz July/August production: Rebounded nicely and now well ahead of the rates needed to achieve our full year production guidance. 8

9 Real Returns* Industry leading quarterly cash dividend of $0.125 per common share was maintained. Annual dividend of $0.50 per common share represents yield of ~4% (at September 4, 2013 closing). At June 30, 2013 PAAS had million common shares issued and outstanding. Through our NCIB programs we have invested $142.5 million and repurchased and cancelled approximately 6.4 million shares. Since inception in 2010, we have paid a total of $100.6 million to our shareholders in dividends. In total, we have returned in excess of $243 million in cash to our shareholders. * At September 9,

10 Adjusting To Lower Prices Cut greenfield exploration spending by 49% to $5.6 million. * Reduced quarterly G&A and overhead by 25% to $4.6 million. * Implemented further cost control measures and productionenhancement initiatives at all our operations and offices. Expect to see full benefits from these programs in Q Cut discretionary capital spending; however, have accelerated further construction of Dolores leach pad 3. Net net, 2013 capex unchanged. Sustaining capital required in 2014 should drop significantly (2013 Capex: tailings dam expansions at Huaron, San Vicente, La Colorada, Dolores leach pad 2 expansion and leach pad 3 construction). * Compares Q to Q

11 Organic Growth Dolores Leach Pad 3 Temporary Conveyor By Pass Operational June 2013 Leach Pad 3 Q Progress June 2013

12 Organic Growth Dolores Pulp Agglomeration Preliminary work on pulp agglomeration project very current reserve prices ($25/oz Ag & $1,350/oz Au). We continue evaluating project and mine expansion opportunities in light of persisting lower market prices (i.e. future underground production). In H2 will invest $2 $3 million to proceed with basic engineering, to put us in position to advance the project early next year, should results of continued evaluation prove positive and precious metals prices improve. La Colorada Expansion On track to complete technical study by year end on new shaft and mine expansion. Selected intercepts: Vein Width Ag Au NC2 2.5 m 614 g/t 0.7 g/t Amolillo (Split) Amolillo 10.8 m 365 g/t n/a 1.9 m 1,490 g/t n/a 4.2 m 833 g/t 3.8 g/t 2.7 m 1,800 g/t 1 g/t 3.3 m 873 g/t n/a 12

13 La Colorada Mine W E Access Ramp HW vein NC2 vein 13

14 La Colorada Mine S N Recompensa vein Amolillo vein NC2 vein 14

15 A STRONGER PAAS In H2 2013: Expecting increased Ag and Au production. Expecting lower operating costs to offset lower by product credits. Expecting further G&A reductions. Reduced exploration, but still returning exceptional results from mine site exploration. Maintaining excellent liquidity and minimal debt. Expectation (at current price levels): A swift return to profitability Maintaining our dividend Organic growth projects with high IRR will be brought forward 15

16 PAAS - Capital Structure* Share Capital: Market capitalization US$1.87 Billion Issued and outstanding shares 151,410,712 Fully diluted shares 151,411,371 Trading Statistics: NASDAQ: Average volume (3 months) 2,845,767 shares 52 week high $ week low $10.23 TSX: Average volume (3 months) 594,067 shares 52 week high $ week low $10.23 At June 30,

17 Appendix I 2013 Production Forecast - Updated At reduced Ag and Au price environment, reaffirming our 2013 consolidated production forecast and, original cash costs guidance. Ag Production (Moz) Au Production (Oz) Full Year 2013E Cash Costs per Ag oz (Net of by product credits)* La Colorada ,600 2,700 $9.84 $10.24 Alamo Dorado ,600 16,300 $7.29 $8.03 Dolores ,000 58,900 $7.27 $9.08 Huaron ,000 $16.67 $17.41 Morococha (92.2%) ,400 2,600 $18.69 $20.06 San Vicente (95%) $15.69 $15.83 Manantial Espejo ,500 53,500 $13.61 $15.97 TOTAL , ,000 $11.80 $12.80 Also expect to produce: 38.5K to 41.5 K tonnes Zn, 12.5K to 13.5K tonnes Pb and 4.5K to 5K tonnes Cu. * In the estimate for cash costs per silver ounce, net of by product credits, metal prices assumed for H are: $1,200 per ounce of gold, $1,925 per tonne of zinc, $1,975 per tonne of lead and $7,800 per tonne of copper. 17

18 Appendix II Sustaining Capex - Updated Sustaining Capex (Million $) Q2 2013A Full Year 2013 E La Colorada $5.9 $12.7 Alamo Dorado $2.5 $6.5 Dolores $9.4 $78.9 Huaron $5.5 $18.7 Morococha (92.2%) $6.2 $16.3 San Vicente (95%) $2.1 $10.0 Manantial Espejo $3.7 $13.7 TOTAL $35.3 $ key capital projects: Dolores: Pre stripping Leach pad 2 stabilization & pad 3 construction Enhancements to mining fleet Power line project Huaron, La Colorada and San Vicente: Tailings dam raises Morococha and Huaron: Underground development Alamo Dorado and Manantial Espejo Pre stripping 18

19 Appendix III Proven & Probable Mineral Reserves & Resources (1), (2), (3) Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag (Moz) Au (g/t) Huaron Peru Proven N/A N/A Probable N/A N/A Morococha (92.2%) Peru Proven N/A N/A Probable N/A N/A La Colorada Mexico Proven Probable Dolores Mexico Proven Probable Alamo Dorado Mexico Proven Probable La Bolsa Mexico Proven Probable Manantial Espejo Argentina Proven Probable San Vicente (95%) Bolivia Proven N/A N/A Probable N/A N/A TOTALS (1) Proven + Probable Contained Au (000 s oz) ,419.4 (1) Totals may not add up due to rounding, (2) the December 31, 2012 Proven and Probable Mineral Reserves were estimated using appropriate cut off grades based on assumed metal prices of Ag: 25/oz, Au: $1,350, Cu: $6,500/t, Pb: $1,850/t, Zn: $1,750/t, (3) Complete mineral reserve and resources tables at 19

20 Note on Mineral Reserves and Resources Information THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FORWARD-LOOKING INFORMATION WITHIN THE MEANING OF APPLICABLE CANADIAN SECURITIES LEGISLATION. WHEN USED IN THIS PRESENTATION, THE WORDS BELIEVES, EXPECTS, INTENDS, PLANS, TARGETS, POTENTIAL, AND OTHER SIMILAR WORDS AND EXPRESSIONS IDENTIFY FORWARD-LOOKING STATEMENTS OR INFORMATION. FORWARD-LOOKING STATEMENTS AND INFORMATION EXPRESS, AS AT THE DATE OF THIS NEWS 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 FORWARD-LOOKING STATEMENTS OR INFORMATION, OTHER THAN AS REQUIRED BY APPLICABLE LAW. SUCH FORWARD- LOOKING STATEMENTS AND INFORMATION INCLUDE, BUT ARE NOT LIMITED TO STATEMENTS AS TO: THE ACCURACY OF ESTIMATED MINERAL RESERVES AND RESOURCES, ANTICIPATED RESULTS OF FUTURE EXPLORATION, AND FORECAST FUTURE PRECIOUS METAL PRICES. AND EXPECTATIONS THAT METALLURGICAL, ENVIRONMENTAL, PERMITTING, LEGAL, TITLE, TAXATION, SOCIO-ECONOMIC, POLITICAL, MARKETING OR OTHER ISSUES WILL NOT MATERIALLY AFFECT ESTIMATES OF MINERAL RESERVES. THESE STATEMENTS REFLECT THE COMPANY S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE NECESSARILY BASED UPON A NUMBER OF ASSUMPTIONS AND ESTIMATES THAT, WHILE CONSIDERED REASONABLE BY THE COMPANY, ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, COMPETITIVE, POLITICAL AND SOCIAL UNCERTAINTIES AND CONTINGENCIES. MANY FACTORS, BOTH KNOWN AND UNKNOWN, COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT ARE OR MAY BE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION AND THE COMPANY HAS MADE ASSUMPTIONS AND ESTIMATES BASED ON OR RELATED TO MANY OF THESE FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION: FLUCTUATIONS IN SPOT AND FORWARD MARKETS FOR SILVER, GOLD, BASE METALS AND CERTAIN OTHER COMMODITIES (SUCH AS NATURAL GAS, FUEL OIL AND ELECTRICITY); FLUCTUATIONS IN CURRENCY MARKETS (SUCH AS THE PERUVIAN SOL, MEXICAN PESO, ARGENTINE PESO AND BOLIVIAN BOLIVIANO VERSUS THE U.S. DOLLAR); RISKS RELATED TO THE TECHNOLOGICAL AND OPERATIONAL NATURE OF THE COMPANY S BUSINESS; CHANGES IN NATIONAL AND LOCAL GOVERNMENT, LEGISLATION, TAXATION, CONTROLS OR REGULATIONS AND POLITICAL OR ECONOMIC DEVELOPMENTS IN CANADA, THE UNITED STATES, MEXICO, PERU, ARGENTINA, BOLIVIA OR OTHER COUNTRIES WHERE THE COMPANY MAY CARRY ON BUSINESS IN THE FUTURE; RISKS AND HAZARDS ASSOCIATED WITH THE BUSINESS OF MINERAL EXPLORATION, DEVELOPMENT AND MINING (INCLUDING ENVIRONMENTAL HAZARDS, INDUSTRIAL ACCIDENTS, UNUSUAL OR UNEXPECTED GEOLOGICAL OR STRUCTURAL FORMATIONS, PRESSURES, CAVE-INS AND FLOODING); EMPLOYEE RELATIONS; RELATIONSHIPS WITH AND CLAIMS BY LOCAL COMMUNITIES AND INDIGENOUS POPULATIONS; AVAILABILITY AND INCREASING COSTS ASSOCIATED WITH MINING INPUTS AND LABOUR; THE SPECULATIVE NATURE OF MINERAL EXPLORATION AND DEVELOPMENT, INCLUDING THE RISKS OF OBTAINING NECESSARY LICENSES AND PERMITS AND THE PRESENCE OF LAWS AND REGULATIONS THAT MAY IMPOSE RESTRICTIONS ON MINING, INCLUDING THOSE CURRENTLY IN THE PROVINCE OF CHUBUT, ARGENTINA; DIMINISHING QUANTITIES OR GRADES OF MINERAL RESERVES AS PROPERTIES ARE MINED; GLOBAL FINANCIAL CONDITIONS; CHALLENGES TO, OR DIFFICULTY IN MAINTAINING, THE COMPANY S TITLE TO PROPERTIES AND CONTINUED OWNERSHIP THEREOF; THE ACTUAL RESULTS OF CURRENT EXPLORATION ACTIVITIES, CONCLUSIONS OF ECONOMIC EVALUATIONS, AND CHANGES IN PROJECT PARAMETERS TO DEAL WITH UNANTICIPATED ECONOMIC OR OTHER FACTORS; INCREASED COMPETITION IN THE MINING INDUSTRY FOR PROPERTIES, EQUIPMENT, QUALIFIED PERSONNEL, AND THEIR COSTS; AND THOSE FACTORS IDENTIFIED UNDER THE CAPTION RISKS RELATED TO PAN AMERICAN S BUSINESS IN THE COMPANY S MOST RECENT FORM 40F AND ANNUAL INFORMATION FORM FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND CANADIAN PROVINCIAL SECURITIES REGULATORY AUTHORITIES. INVESTORS ARE CAUTIONED AGAINST ATTRIBUTING UNDUE CERTAINTY OR RELIANCE ON FORWARD- LOOKING STATEMENTS. ALTHOUGH THE COMPANY HAS ATTEMPTED TO IDENTIFY IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY, THERE MAY BEOTHER FACTORS THAT CAUSE RESULTS NOT TO BE AS ANTICIPATED, ESTIMATED, DESCRIBED OR INTENDED. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE THESE FORWARD-LOOKING STATEMENTS OR INFORMATION TO REFLECT CHANGES IN ASSUMPTIONS OR CHANGES IN CIRCUMSTANCES OR ANY OTHER EVENTS AFFECTING SUCH STATEMENTS OR INFORMATION, OTHER THAN AS REQUIRED BY APPLICABLE LAW. CAUTIONARY NOTE TO US INVESTORS CONCERNING ESTIMATES OF MEASURED AND INDICATED RESOURCES THIS NEWS RELEASE HAS BEEN PREPARED IN ACCORDANCE WITH THE REQUIREMENTS OF CANADIAN PROVINCIAL SECURITIES LAWS, WHICH DIFFER FROM THE REQUIREMENTS OF U.S. SECURITIES LAWS. UNLESS OTHERWISE INDICATED, ALL MINERAL RESERVE AND RESOURCE ESTIMATES INCLUDED IN THIS NEWS RELEASE HAVE BEEN PREPARED IN ACCORDANCE WITH CANADIAN NATIONAL INSTRUMENT STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS ( NI ) AND THE CANADIAN INSTITUTE OF MINING, METALLURGY AND PETROLEUM CLASSIFICATION SYSTEM. NI IS A RULE DEVELOPED BY THE CANADIAN SECURITIES ADMINISTRATORS THAT ESTABLISHES STANDARDS FOR ALL PUBLIC DISCLOSURE AN ISSUER MAKES OF SCIENTIFIC AND TECHNICAL INFORMATION CONCERNING MINERAL PROJECTS. CANADIAN STANDARDS, INCLUDING NI , DIFFER SIGNIFICANTLY FROM THE REQUIREMENTS OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE SEC ), AND INFORMATION CONCERNING MINERALIZATION, DEPOSITS, MINERAL RESERVE AND RESOURCE INFORMATION CONTAINED OR REFERRED TO HEREIN MAY NOT BE COMPARABLE TO SIMILAR INFORMATION DISCLOSED BY U.S. COMPANIES. IN PARTICULAR, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THIS PRESS RELEASE USES THE TERMS MEASURED RESOURCES, INDICATED RESOURCES AND INFERRED RESOURCES. U.S. INVESTORS ARE ADVISED THAT, WHILE SUCH TERMS ARE RECOGNIZED AND REQUIRED BY CANADIAN SECURITIES LAWS, THE SEC DOES NOT RECOGNIZE THEM. UNDER U.S. 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. U.S. INVESTORS ARE CAUTIONED NOT TO ASSUME THAT ANY PART OF A MEASURED RESOURCE OR INDICATED RESOURCE WILL EVER BE CONVERTED INTO A RESERVE. U.S. INVESTORS SHOULD ALSO UNDERSTAND THAT INFERRED RESOURCES HAVE A GREAT AMOUNT OF UNCERTAINTY ASTOTHEIR EXISTENCE AND GREAT UNCERTAINTY AS TO THEIR ECONOMIC AND LEGAL FEASIBILITY. IT CANNOT BE ASSUMED THAT ALL OR ANY PART OF INFERRED RESOURCES EXIST, ARE ECONOMICALLY OR LEGALLY MINEABLE OR WILL EVER BE UPGRADED TO A HIGHER CATEGORY. UNDER CANADIAN SECURITIES LAWS, ESTIMATED INFERRED RESOURCES MAY NOT FORM THE BASIS OF FEASIBILITY OR PRE-FEASIBILITY STUDIES EXCEPT IN RARE CASES. DISCLOSURE OF CONTAINED OUNCES IN A MINERAL RESOURCE IS PERMITTED DISCLOSURE UNDER CANADIAN SECURITIES LAWS. HOWEVER, THE SEC NORMALLY ONLY PERMITS ISSUERS TO REPORT MINERALIZATION THAT DOES NOT CONSTITUTE RESERVES BY SEC STANDARDS AS IN PLACE TONNAGE AND GRADE, WITHOUT REFERENCE TO UNIT MEASURES. THE REQUIREMENTS OF NI FOR IDENTIFICATION OF RESERVES ARE ALSO NOT THE SAME AS THOSE OF THE SEC, AND RESERVES REPORTED BY THE COMPANY IN COMPLIANCE WITH NI MAY NOT QUALIFY AS RESERVES UNDER SEC STANDARDS. ACCORDINGLY, INFORMATION CONCERNING MINERAL DEPOSITS SET FORTH HEREIN MAY NOT BE COMPARABLE WITH INFORMATION MADE PUBLIC BY COMPANIES THAT REPORT IN ACCORDANCE WITH U.S. STANDARDS. 20