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Message: Replaces Proven and Probable Silver Reserves Mined During 2008
| February 18, 2009 | |||
| Pan American Silver Replaces Proven and Probable Silver Reserves Mined During 2008 | |||
|
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 17, 2009) - Pan American Silver Corp. (TSX:PAA)(NASDAQ:PAAS) is pleased to announce the results of its 2008 year end silver reserves and resources update. In 2008, Pan American carried out extensive exploration programs, both on its properties as well as on selected greenfield exploration projects in Peru and Mexico. In total, the Company drilled nearly 100,000 meters, resulting in the discovery and definition of 26.9 million ounces of new silver reserves, which more than replaced the 22.2 million ounces of silver consumed by mining operations in 2008. However lower base metal price assumptions coupled with higher cut off grades downgraded 8.8 million ounces from reserves to resources, and as a result, at December 31, 2008 the Company had 223.7 million ounces of silver in proven and probable reserves, down a modest 1.8% from a year ago. At Huaron and Morococha, year end proven and probable reserves increased by 5%, or 3.2 million ounces and 10%, or 3.1 million ounces, respectively after subtracting ore mined during 2008. The Company also added 4.6 million ounces of silver to La Colorada's reserves and 1.4 million ounces of silver to San Vicente, basically replacing all the reserves mined during 2008. Reserve losses were experienced at Alamo Dorado due to mining and at Quiruvilca due to a combination of mining and the Company's intention to prepare the mine for a period of care and maintenance. At Manantial Espejo, reserves remained relatively unchanged year over year. Commenting on the 2008 exploration results, Michael Steinmann, Executive VP Geology and Exploration indicated: "I am very pleased with the results of last year's exploration program. Our corporate reserve book has a healthy 224 million ounces of silver and gold reserves increased by 1% to over 701,000 ounces. Once again, Morococha and Huaron proved their excellent exploration potential and I strongly believe that in these large ore deposits we will continue to add reserves for many years to come. In addition, I am very excited that with Manantial Espejo's construction complete, we will now start tapping into the tremendous exploration potential of our extensive land holdings around our newest mine." The following represents the changes in the Company's estimated silver reserves, year over year: Proven and probable silver reserves, as of 227.8 million ounces December 31, 2007 Less mined ounces (contained) during 2008 (22.2) million ounces Additions due to exploration drilling during 2008 26.9 million ounces Downgraded due to higher cut off and lower base million ounces metal prices (8.8) ------------------------------------------------- ----- Proven and probable silver reserves, as of 223.7 million ounces December 31, 2008 Complete reserves and resource information for all metals, including tonnage and ore grades is available at www.panamericansilver.com. Metal prices used to calculate December 31, 2008 ore reserves for all mines (except Quiruvilca) were: Ag: $11.00/oz, Au: $700/0z, Pb: $1,500/tonne, Cu: $4,000/tonne, Zn: $1,500/tonne. Complete silver reserves and resource information is as follows:
MINERAL RESERVES - PROVEN AND PROBABLE
Tonnes Ag Ag Cont.
Location Type Classification (000's) (g/mt) (000,s ozs)
-------- ----------- -------------- ------ ---- ---------
Huaron Peru Vein Proven 5,337 188 32,336
Vein Probable 4,744 195 29,669
Morococha Peru Vein/Mantos Proven 3,895 153 19,178
(92.2%) Vein/Mantos Probable 2,739 182 16,048
La Mexico Vein Proven 815 445 11,664
Colorada Vein Probable 484 420 6,528
Quiruvilca Peru Vein Proven 350 185 2,080
(b) Vein Probable 217 183 1,277
Silver Peru Flux Probable 203 311 2,033
Stockpiles Material
(a)
Alamo Mexico Dissemi- Proven 6,095 112 21,948
Dorado nated
Dissemi- Probable 4,644 83 12,393
nated
Manatial Argentina Vein Proven 4,207 184 24,890
Espejo Vein Probable 2,184 186 13,058
San Bolivia Vein Proven 1,535 406 20,046
Vicente Vein Probable 790 417 10,593
(95%)
TOTALS Proven + 38,239 182 223,742
Probable
MINERAL RESOURES - MEASURED AND INDICATED
Tonnes Ag Ag Cont.
Location Type Classification (000's) (g/mt) (000,s ozs)
-------- ----------- -------------- ------ ---- ---------
Huaron Peru Vein Measured 1,240 161 6,430
Vein Indicated 828 164 4,369
Morococha Peru Vein/Mantos Measured 1,418 158 7,223
(92,18%) Vein/Mantos Indicated 1,230 214 8,468
La Mexico Vein Measured 147 322 1,523
Colorada Vein Indicated 1,096 306 10,767
Quiruvilca Peru Vein Measured 2,872 138 12,702
(b) Vein Indicated 905 162 4,721
Alamo Mexico Dissemi- Measured 920 74 2,189
Dorado nated
Dissemi- Indicated 2,491 69 5,525
nated
Manatial Argentina Vein Measured 1,552 93 4,642
Espejo Vein Indicated 2,376 105 8,022
San Bolivia Vein Measured 442 111 1,582
Vicente Vein Indicated 487 276 4,322
(95%)
TOTALS Measured+
Indicated 18,004 142 82,484
MINERAL RESOURCES - INFERRED
Tonnes Ag Ag Cont.
Location Type Classification (000's) (g/mt) (000,s ozs)
-------- ----------- -------------- ------ ---- ---------
Huaron Peru Vein Inferred 5,260 178 30,179
Morococha Peru Vein/Mantos Inferred 7,931 160 40,800
(92.18%)
La Mexico Vein Inferred 1,938 329 20,519
Colorada
Quiruvilca Peru Vein Inferred 1,180 120 4,542
(b)
Alamo Mexico Dissemi- Inferred 2,222 64 4,572
Dorado nated
Manatial Argentina Vein Inferred 2,070 115 7,653
Espejo
San Bolivia Vein Inferred 369 334 3,968
Vicente
(95%)
TOTALS 20,971 166 112,233
HISTORICAL ESTIMATES
Tonnes Ag Ag Cont.
Property Location Unclassified (000's) (g/mt) (000,s ozs)
-------------- -------- ------------------- ------ ---- ---------
Hog Heaven (ii) USA Historical (ii)(iii) 2,705 167 14,550
Hog Heaven (ii) USA Historical (ii)(iv) 7,639 133 32,730
Waterloo (v) USA Historical 33,758 93 100,937
-------------------------
TOTAL Historical 44,102 104 148,217
Mineral Reserves and Resources have been prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). This table illustrates Pan American Silver Corp's share of mineral reserves and resources. Properties in which Pan American Silver has less than 100% interest are noted next to the property name. Mineral 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., Executive Vice President Geology & Exploration and Martin G. Wafforn, P.Eng., Vice President Technical Services as Qualified Persons as that term is defined in NI 43-101. Reserve/resource estimates for Silver Stockpiles were prepared in previous years by other Qualified Persons, and are adjusted for 2008 production where applicable(a). Mineral resource estimates for Hog Heaven and Waterloo based on historical third party estimates. (a) 2007 mineral reserve and resource estimates less 2008 production Metal Prices Used for all Mines (except Quiruvilca): Ag: $11.00/oz, Au: $700/0z, Pb: $1,500/Tonne, Cu: $4,000/Tonne, Zn: $1,500/Tonne (b) Metal Prices Used for Quiruvilca: Ag: $10.00/oz, Au: $725/0z, Pb: $1,300/Tonne, Cu: $3,500/Tonne, Zn: $1,150/Tonne (ii) 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: Category Tons oz/ton Ag oz/ton Au ---------------------------- ---------- --------- --------- Proven reserves 2,981,690 4.88 0.018 Probable & possible reserves 904,200 10.40 0.020 Heap leach ore 316,100 1.56 0.014 Possible resources 4,500,000 2.41 0.020 Inferred resources 2,700,000 4.44 0.022 (iii) 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". (iv) 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." (v) 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. 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 eight operating silver mines in Mexico, Peru, Bolivia and Argentina. Michael Steinmann, P. Geo., Executive Vice President Geology & Exploration, and Martin Wafforn, P. Eng., Vice President Technical Services, each of whom are Qualified Persons ("QP"), as the term is defined in National Instrument 43-101 "NI 43-101", have reviewed and approved the contents of this press release. |
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