PAAS Pan American Silver - 500 Beiträge pro Seite

[goldmaki]

VANCOUVER, Feb. 24 /PRNewswire-FirstCall/ --

2004 IN REVIEW -------------- - Record silver production in 2004 - up 30% to 11.2 million ounces (8.6 million in 2003) - the tenth consecutive year of silver production growth. Fourth quarter production of 3.1 million ounces, up 48% over fourth quarter 2003. - Record mine operating earnings of $12.9 million for the year ($2 million in 2003). Mine operating earnings of $2.8 million for the fourth quarter ($0.81 million in 2003). - Record net earnings in 2004 of $19.9 million, including a gain on the sale of the Dukat property totaling $20.1 million and a write-off of mining equipment of $1.8 million net of taxes. Excluding these items, net earnings for the year were $1.6 million ($6.8 million loss in 2003). Fourth quarter net earnings totaled $15.7 million ($2.8 million loss in 2003). - Record consolidated revenue of $92.9 million more than doubled over 2003. - Morococha silver mine in Peru acquired. - Interest in Dukat sold for up to $43 million, more than recovering original investment. - Feasibility studies advanced at Alamo Dorado in Mexico, San Vicente in Bolivia and Manantial Espejo in Argentina, leading to a positive production decision on Alamo Dorado and the acceleration of production from San Vicente for 2005. Manantial Espejo`s feasibility study on track for completion later in 2005. - Exploration success in 2004 more than replaced silver produced. - Balance sheet improved through early conversion of $85.5 million of debentures issued in 2003; $55 million raised in new equity; profitable operation; all corporate debt retired. - Working capital at December 31, 2004 of $115 million, including cash and short-term investments of $98 million. FINANCIAL RESULTS (unaudited) -----------------

Pan American Silver (Nachrichten) (NASDAQ: PAAS; TSX: PAA) reported net earnings of $15.7 million or $0.23 per share for the fourth quarter of 2004 versus a fourth quarter loss of $2.8 million in 2003. Earnings included a one-time gain on the sale of the Company`s 20 per cent interest in the Dukat mine in Russia for $20.1 million, partially offset by the write-down of obsolete equipment of $1.8 million, after tax. Excluding these items, there was a loss of $2.7 million in the quarter, due primarily to the first-time payment of Peruvian income taxes totaling $2.8 million as well as mandatory employee profit sharing of $1.0 million. In addition, $0.6 million was accrued for royalties payable in Peru as a result of recently introduced legislation. Consolidated revenue for the quarter was $29.4 million versus $12.9 million in 2003 due to higher production levels and higher metal prices.

Consolidated silver production for the fourth quarter totaled 3.1 million ounces, a 48% increase over the fourth quarter of 2003. The increase was due primarily to the addition of silver production from the Morococha mine acquired in the third quarter and increased production from La Colorada. By-product production of zinc and copper was higher while lead production was lower than in the fourth quarter of 2003 due to the addition of zinc and copper contributions at Morococha and lower lead grades at Huaron and Quiruvilca.

Cash costs in the fourth quarter rose 17% over 2003 levels to $4.70/oz and total costs rose 27%. A number of one-time charges were incurred in the fourth quarter, including profit-sharing and bonus payments in Peru and the reclassification of certain deferred charges in Mexico. In addition, production at Morococha was adversely affected by temporary production disruptions, including a crusher breakdown and a significant workforce reduction. Production levels at Morococha have since returned to normal.

For the full year ended December 31, 2004 Pan American recorded consolidated net earnings of $19.9 million, or $2.3 million excluding the gain from the sale of Dukat and the write-down of assets. The loss in 2003 was $6.8 million, due primarily to lower production and metal prices. Consolidated revenue in 2004 was $92.9 million versus $45.1 million in 2003.

Silver production in 2004 totaled 11.2 million ounces, a 30% increase over 2003. Zinc production of 34,086 tonnes was 7% higher than in 2003, lead production was 12% lower and copper production was 9% higher. Cash costs for 2004 rose slightly to $4.25/oz while total production costs rose 15% to $5.33/oz due to the inclusion in 2004 of depreciation charges from La Colorada and Morococha. Consolidated cash costs in 2005 are expected to decline.

Capital spending in 2004 decreased to $17.0 million from $18.3 million in 2003 reflecting the completion of construction of the La Colorada mine in 2003. Capital expenditures related primarily to re-engineering expenses at Huaron, tailings dam construction at La Colorada and project development expenditures at Alamo Dorado. Working capital at December 31, 2004 improved to $114.7 million from $81.9 million at December 31, 2003 due to an increase in cash and cash equivalents, an increase in accounts receivable and inventories, and a decrease in current liabilities.

Ross Beaty, Chairman of Pan American, commented that "Pan American Silver marked its tenth anniversary with its best financial and operating performance ever. We have one of the largest silver reserve and resource bases of any mining company, the strongest balance sheet in the silver industry, and the most robust pipeline of future growth projects to complement our long-life assets. Our focus in 2005 will be on reducing production costs, capitalizing on the potential of the Morococha mine and successfully commencing construction of the Alamo Dorado silver mine in Mexico, and of course, we will continue to grow. In 2005 we expect to increase annual silver production another 21% to 13.6 million ounces, and to reduce cash costs significantly."

OPERATIONS AND DEVELOPMENT HIGHLIGHTS MEXICO

In the fourth quarter, the La Colorada mine more than doubled its production from the year-earlier period to 683,526 ounces of silver. December marked the mine`s sixth consecutive month of oxide production growth, culminating in record monthly production of 241,440 ounces. The oxide portion of the mine is expected to reach full production capacity early in the second quarter of 2005. However, the mine`s sulphide plant remains shut down due to excess water underground. Hydrogeological studies are underway to evaluate the viability of resuming sulphide production. La Colorada`s silver production for 2004 totaled 2,036,075 ounces. Cash production costs for the quarter were $5.98/oz and total costs were $7.45/oz due to high development costs as the operation converted to more selective mining to address poor ground conditions. In 2005 the mine is forecast to produce 2.9 million ounces of silver at a cash cost of $5.53/oz.

Pan American Silver will commence construction of the Alamo Dorado silver project in Mexico in the second quarter of this year. Capital costs for the project are estimated at $76.6 million and Pan American will fund construction from its cash on hand. Starting in 2007, Alamo Dorado is expected to produce approximately 5 million ounces of silver and 14,000 ounces of gold annually at an average cash cost of less than $3.25/oz of silver, net of gold by-product revenues.

PERU

The Quiruvilca mine was Pan American`s most profitable operation in 2004, generating $9.5 million in operating profit. Quiruvilca produced 638,486 ounces of silver in the fourth quarter, up 3% over 2003 levels. Cash costs totaled $4.47/oz in the fourth quarter, up 11% over 2003 due to workers` profit participation and year-end bonus payments. For the year, however, the mine`s cash cost fell 28% from $5.01/oz to $3.63/oz. Total costs fell from $5.18/oz to $3.88/oz on full-year production of 2.5 million ounces of silver, 11,709 tonnes of zinc, 3,803 tonnes of lead and 1,081 tonnes of copper. Successful exploration drilling more than replaced the tonnes mined in 2004. The operation is expected to produce 2.3 million ounces of silver in 2005 at a cash cost of $4.03/oz.

The acquisition of 86% of the Morococha silver mine in Peru was completed mid-year. In the fourth quarter the mine produced 573,514 ounces of silver, 2,812 tonnes of zinc, 1,025 tonnes of lead and 254 tonnes of copper, bringing six-month totals to 1,259,451 ounces of silver, 5,902 tonnes of zinc, 2,186 tonnes of lead and 538 tonnes of copper. Cash costs of $5.42/oz and total costs of $7.01/oz in the fourth quarter were negatively affected by mandatory employee profit sharing, a year-end bonus payment to workers, and temporary production disruptions. For the year, cash costs were $4.41/oz and total costs were $5.94/oz. Costs are expected to decline significantly in 2005 when Morococha is expected to produce 2.6 million ounces of silver at cash costs of $3.42/oz of silver. The Company also expects to invest approximately $9.6 million in mill refurbishment and development as part of a gradual expansion to 3.9 million ounces of silver production annually.

Production at the Huaron mine in the fourth quarter of 2004 remained unchanged at 954,000 ounces of silver while cash costs of $3.66/oz declined 15% from $4.33/oz in the same period of 2003. Total costs declined from $5.08/oz in the fourth quarter of 2003 to $4.87/oz in 2004. For the year, production totaled 4,080,737 ounces, down 6.5% from 2003 though cash costs in 2004 remained steady at $3.90/oz while total costs rose from $4.62/oz in 2003 to $5.06/oz in 2004 due to higher depreciation charges. Drilling at Huaron was also successful in 2004, replacing the tonnage mined. In 2005 Huaron is expected to produce 4.2 million ounces of silver at a cash cost of $4.10/oz.

The Silver Stockpile Operation continued to generate excellent cash flow, producing 182,417 ounces of silver in the fourth quarter at a cash cost of $3.50/oz, up from $2.28/oz in the year earlier period due to the higher silver price, upon which the stockpile`s operating cost is based. Beginning in the fourth quarter, the stockpiles became subject to a 33% cash flow royalty to Volcan, the Peruvian company from which Pan American purchased the operation. In 2004 the mine produced a total of 961,869 ounces of silver at cash and total costs of $2.95/oz and $3.58/oz respectively and those production rates are expected to continue in 2005.

ARGENTINA

Feasibility work continues to progress on the 50% owned Manantial Espejo silver-gold joint venture where permitting and environmental baseline studies are well advanced. Work completed to date indicates a combined underground and open pit operation producing a total of 3.6 million ounces of silver and 60,000 ounces of gold (100%) annually over a nine-year mine life. A 15,000 m drilling program is underway to follow up on several resource expansion targets identified in 2004. The feasibility study is expected to be completed later in 2005.

BOLIVIA

In 2004, Bolivian mining company EMUSA earned a 50% interest in the San Vicente project and conducted small-scale mining which contributed 313,029 ounces of silver to Pan American`s production, paid as a royalty. In 2005, San Vicente will be expanded to produce 700,000 ounces of silver as Pan American`s share, at a forecast cash cost of $2.23/oz.

RESERVES AND RESOURCES ----------------------

Pan American drilled nearly 65,000 meters and replaced all of the tonnage mined at its operations in 2004, at a cost of $3.8 million. The Company`s silver reserve and resource base remained one of the largest in the industry in 2004, despite the sale of its interest in the Dukat mine in the fourth quarter and a recalculation of Alamo Dorado`s reserves based on the current mine plan. Proven and probable reserves as of December 31, 2004 totaled 147.5 million ounces. Measured and Indicated resources totaled 233.6 million ounces. Inferred resources totaled 266.2 million ounces. These levels are comparable to 2003, excluding Dukat.

SILVER MARKETS

Silver prices were volatile in 2004, ranging from a low of $5.63 to a high of $8.29 and ending the year at $6.77, a rise of 13.6% over 2003. Industrial and investment demand for silver rose strongly in the year, while jewelry demand fell by 8% due to the higher silver price and photographic demand declined modestly, resulting in a silver deficit of approximately 60 million ounces (2003 - 83 million ounces). This deficit was filled by sales of government stockpiles, mainly from China and Russia. World mine production of silver rose only 1% and production growth is expected to remain modest as depleted mines offset new production. Silver prices continue to benefit from the ongoing deficit and renewed investor interest and we are optimistic that silver prices will continue to be strong in 2005.

Pan American Silver Corp. will host a conference call on February 25, 2004 at 10:00 am Pacific Time to discuss these results. North American residents dial toll-free to 1-877-825-5811. International participants please dial 1-973-582-2767. The call may also be accessed from the home page of the Company`s website at http://www.panamericansilver.com/." target="_blank" rel="nofollow ugc noopener">http://www.panamericansilver.com/. It will be available for replay for one week after the call by dialing 1-877-519-4471 and using replay pin number 5652616.

For information, please contact: Brenda Radies, Vice-President Corporate Relations, [phone]

http://www.panamericansilver.com/ 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.

Mineral Reserves and Resources As of December 31, 2004 MINERAL RESERVES - PROVEN AND PROBABLE Ag Cont. Classi- Tonnes Ag (000,s Au Pb Cu Zn Location fication (000`s) (g/mt) ozs) (g/mt) (%) (%) (%) -------- -------- ------ ----- ------- ----- ---- ---- ---- Huaron Peru Proven 4,854 219 34,177 2.14 0.43 4.03 Probable 1,902 225 13,759 2.15 0.41 4.01 Morococha Peru Proven 1,455 223 10,433 1.51 0.44 4.16 (86%) Probable 543 242 4,222 1.18 0.91 4.27 La Mexico Proven 567 502 9,151 N/A N/A N/A Colorada(a) Probable 1,289 499 20,680 N/A N/A N/A Quiruvilca Peru Proven 677 202 4,397 0.15 1.41 0.47 4.61 Probable 388 197 2,457 0.19 1.51 0.46 4.38 Silver Peru Probable 443 302 4,301 N/A N/A N/A Stockpiles (a) Alamo Mexico Proven 1,019 136 4,456 0.43 N/A N/A N/A Dorado Probable 10,591 116 39,499 0.32 N/A N/A N/A TOTALS Proven + 23,728 193 147,532 - - - Probable MINERAL RESOURCES - MEASURED AND INDICATED Ag Cont. Classi- Tonnes Ag (000,s Au Pb Cu Zn Location fication (000`s) (g/mt) ozs) (g/mt) (%) (%) (%) -------- -------- ------ ----- ------- ----- ---- ---- ---- Huaron Peru Measured 738 210 4,983 2.66 0.15 3.43 Indicated 524 205 3,454 2.58 0.16 3.53 Morococha Peru Measured 701 144 3,245 1.30 0.32 3.20 (86%) Indicated 188 163 987 1.09 0.36 2.93 La Colorada Mexico Measured 562 438 7,914 N/A N/A N/A (a) Indicated 2,189 418 29,418 N/A N/A N/A Quiruvilca Peru Measured 2,198 178 12,579 0.57 1.37 0.78 3.66 Indicated 761 181 4,428 0.57 1.52 0.79 4.33 Alamo Mexico Measured 263 84 710 0.31 N/A N/A N/A Dorado Indicated 3,610 71 8,241 0.23 N/A N/A N/A Manantial Argentina Measured 2,360 174 13,202 2.46 N/A N/A N/A Espejo Indicated 1,969 160 10,126 2.20 N/A N/A N/A (50%) San Vicente Bolivia Measured 607 363 7,078 N/A N/A 2.74 (50%) Indicated 677 519 11,288 N/A N/A 2.81 Hog Heaven Montana, Measured 2,741 170 15,015 0.69 N/A N/A N/A USA +Indicated Waterloo Calif- Indic 33,758 93 100,937 N/A N/A N/A ornia, -ated ------ -- USA TOTALS Measured 53,844 135 233,605 - - - +Indic -ated MINERAL RESOURCES - INFERRED Ag Cont. Classi- Tonnes Ag (000,s Au Pb Cu Zn Location fication (000`s) (g/mt) ozs) (g/mt) (%) (%) (%) -------- -------- ------ ----- ------- ----- ---- ---- ---- Huaron Peru Inferred 1,842 233 13,799 2.63 0.32 4.06 Morococha Peru Inferred 6,566 250 52,776 2.00 0.40 4.40 (86%) (b) La Colorada Mexico Inferred 452 597 8,676 N/A N/A N/A (a) Inferred 6,715 112 24,180 N/A N/A N/A Quiruvilca Peru Inferred 2,181 174 12,201 0.26 1.51 0.47 4.23 Alamo Mexico Inferred 518 79 1,316 0.30 N/A N/A N/A Dorado Silver Peru Inferred 21,337 162 111,132 N/A N/A N/A Stockpiles Manantial Argentina Inferred 821 158 4,171 1.88 N/A N/A N/A Espejo (50%) San Vicente Bolivia Inferred 236 563 4,263 N/A N/A 3.47 (50%) Hog Heaven Montana, Inferred 7,439 141 33,721 N/A N/A N/A USA ----- --- TOTALS 48,106 172 266,234 - - - NOTES: Mineral Reserves and Resources are as defined by Canadian Institute of Mining Guidelines. Mineral resources do not have demonstrated economic viability. 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, La Colorada and Morococha were prepared under the supervision of or were reviewed by Michael Steinmann, P.Geo., Vice President Geology - Operations and Martin G. Wafforn, P.Eng., Director of Mine Engineering as Qualified Persons as that term is defined in NI 43-101. Reserve/resource estimates for La Colorada and Silver Stockpiles were prepared in previous years by other Qualified Persons, and are adjusted for 2004 production where applicable(a). Mineral resource estimates for Hog Heaven and Waterloo are based on historical third party estimates. (a) 2003 mineral reserve and resource estimates less 2004 production (b) Inferred resources assigned in feasibility study 2004 Financial & Operating Highlights Three Months ended Twelve Months ended December 31 December 31 2004 2003 2004 2003 Consolidated Financial Highlights (in thousands of US dollars) Net income (loss) for the period $ 15,692 $ (2,822) $ 19,902 $ (6,794) Basic and fully diluted earnings (loss) per share 0.23 (0.05) 0.13 (0.20) Mine operating earnings 2,766 81 12,865 2,019 Cash flow from operations before working capital adjustments 1,929 600 12,216 884 Capital spending 7,368 5,814 17,043 18,327 Exploration expense 960 955 3,838 2,543 Cash and short-term investments 98,136 89,129 98,136 89,129 Working capital $ 114,655 $ 81,927 $ 114,655 $ 81,927 Consolidated Metal Production Silver metal - ounces 3,134,547 2,123,747 11,182,030 8,641,914 Zinc metal - tonnes 9,187 7,038 34,086 31,797 Lead metal - tonnes 3,740 4,154 16,694 18,990 Copper metal - tonnes 1,056 518 3,426 3,143 Consolidated Cost per Ounce of Silver (net of by-product credits) Total cash cost per ounce $ 4.70 $ 4.01 $ 4.25 $ 4.09 Total production cost per ounce $ 5.80 $ 4.57 $ 5.33 $ 4.62 (In thousands of US dollars) Direct operating costs plus value of metals lost in smelting and refining $ 22,455 $ 11,431 $ 74,893 $ 47,043 By-product credits (8,204) (4,209) (28,702) (15,717) ------------------------------------------------------------------------- Cash operating costs 14,251 7,222 46,191 31,326 Depreciation, amortization & reclamation 3,347 1,015 11,742 4,001 ------------------------------------------------------------------------- Production costs $ 17,598 $ 8,237 $ 57,933 $ 35,327 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Ounces used in cost per ounce calculations 3,031,969 1,802,845 10,869,001 7,649,772 Average Metal Prices Silver - London Fixing $ 7.24 $ 5.25 $ 6.66 $ 4.88 Zinc - LME Cash Settlement per pound $ 0.51 $ 0.42 $ 0.48 $ 0.38 Lead - LME Cash Settlement per pound $ 0.43 $ 0.29 $ 0.40 $ 0.23 Copper - LME Cash Settlement per pound $ 1.40 $ 0.93 $ 1.30 $ 0.81 Mine Operations Highlights Three Months ended Twelve Months ended December 31 December 31 Huaron Mine 2004 2003 2004 2003 Tonnes milled 154,400 144,220 635,845 605,790 Average silver grade - grams per tonne 223 235 228 251 Average zinc grade - percent 2.89% 3.49% 3.14% 3.75% Silver - ounces 954,000 966,732 4,080,737 4,365,061 Zinc - tonnes 3,165 3,974 15,041 18,855 Lead - tonnes 1,909 2,969 10,569 14,246 Copper - tonnes 504 282 1,754 1,332 Net smelter return per tonne $ 59.38 $ 48.33 $ 58.98 $ 45.77 Cost per tonne 38.62 44.30 40.32 41.87 ------------------------------------------------------------------------- Margin (loss) per tonne $ 20.76 $ 4.03 $ 18.66 $ 3.90 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total cash cost per ounce $ 3.66 $ 4.33 $ 3.90 $ 3.92 Total production cost per ounce $ 4.87 $ 5.08 $ 5.06 $ 4.62 (In thousands of US dollars) Direct operating costs plus value of metals lost in smelting and refining $ 6,673 $ 6,762 $ 29,798 $ 26,821 By-product credits $ (3,179) $ (2,575) $ (13,867) $ (9,692) ------------------------------------------------------------------------- Cash operating costs 3,494 4,188 15,930 17,129 Depreciation, amortization and reclamation 1,149 725 4,720 3,047 ------------------------------------------------------------------------- Production costs $ 4,643 $ 4,913 $ 20,651 $ 20,176 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Ounces for cost per ounce calculations 954,000 966,732 4,080,737 4,365,061 Quiruvilca Mine Tonnes milled 96,647 89,894 381,237 442,093 Average silver grade - grams per tonne 234 241 235 201 Average zinc grade - percent 3.31% 3.83% 3.57% 3.30% Silver - ounces 638,486 618,133 2,530,869 2,493,908 Zinc - tonnes 2,714 2,984 11,709 12,509 Lead - tonnes 805 1,095 3,803 4,361 Copper - tonnes 280 236 1,081 1,811 Net smelter return per tonne $ 67.50 $ 49.86 $ 64.02 $ 37.24 Cost per tonne 50.98 40.30 45.00 39.20 ------------------------------------------------------------------------- Margin (loss) per tonne $ 16.53 $ 9.56 $ 19.02 $ (1.96) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total cash cost per ounce $ 4.57 $ 4.11 $ 3.63 $ 5.01 Total production cost per ounce $ 4.83 $ 4.34 $ 3.88 $ 5.18 (In thousands of US dollars) Direct operating costs plus value of metals lost in smelting and refining $ 5,395 $ 4,172 $ 18,762 $ 18,522 By-product credits (2,475) (1,634) (9,586) (6,025) ------------------------------------------------------------------------- Cash operating costs 2,920 2,538 9,175 12,498 Depreciation, amortization and reclamation 162 143 650 431 ------------------------------------------------------------------------- Production costs $ 3,082 $ 2,681 $ 9,825 $ 12,928 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Ounces for cost per ounce calculations 638,486 618,133 2,530,869 2,493,908 Three Months ended Twelve Months ended December 31 December 31 Morococha Mine(x) 2004 2003 2004 2003 Tonnes milled 99,591 - 212,172 - Average silver grade - grams per tonne 213 - 221 - Average zinc grade - percent 3.85% - 3.76% - Silver - ounces 573,514 - 1,259,451 - Zinc - tonnes 2,812 - 5,902 - Lead - tonnes 1,025 - 2,186 - Copper - tonnes 254 - 538 - Net smelter return per tonne $ 58.73 $ - $ 55.89 $ - Cost per tonne $ 50.10 - 42.03 - ------------------------------------------------------------------------- Margin (loss) per tonne $ 8.63 $ - $ 13.86 $ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total cash cost per ounce $ 5.42 $ - $ 4.41 $ - Total production cost per ounce $ 7.01 $ - $ 5.94 $ - (In thousands of US dollars) Direct operating costs plus value of metals lost in smelting and refining $ 5,422 $ - $ 10,110 $ - By-product credits (2,313) - (4,552) - ------------------------------------------------------------------------- Cash operating costs 3,110 - 5,557 - Depreciation, amortization and reclamation 911 - 1,926 - ------------------------------------------------------------------------- Production costs $ 4,020 $ - $ 7,483 $ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Ounces for cost per ounce calculations 573,514 - 1,259,451 - (x) Production and cost figures are for Pan American`s share only. Pan American`s ownership increased from 84% to 86% during the quarter, and from 81% to 86% during the year. La Colorada Mine Tonnes milled 44,945 41,195 171,155 99,115 Average silver grade - grams per tonne 579 409 489 435 Silver - ounces 683,526 320,902 2,036,075 992,142 Zinc - tonnes - 80 122 433 Lead - tonnes - 90 136 383 Total cash cost per ounce $ 5.98 $ - $ 6.23 $ - Total production cost per ounce $ 7.45 $ - $ 8.12 $ - (In thousands of US dollars) Direct operating costs plus value of metals lost in smelting and refining $ 4,326 $ - $ 13,388 $ - By-product credits (237) (696) ------------------------------------------------------------------------- Cash operating costs 4,089 - 12,692 - Depreciation, amortization and reclamation 1,007 - 3,836 - ------------------------------------------------------------------------- Production costs $ 5,096 $ - $ 16,528 $ - ------------------------------------------------------------------------- ------------------------------------------------------------------------- Ounces for cost per ounce calculations 683,526 - 2,036,075 - Three Months ended Twelve Months ended December 31 December 31 Pyrite Stockpile Sales 2004 2003 2004 2003 Tonnes sold 15,401 18,214 79,451 65,255 Average silver grade - grams per tonne 368 372 377 377 Silver ounces 182,443 217,980 961,869 790,803 Net smelter return per tonne $ 48.41 $ 35.78 $ 45.47 $ 33.84 Cost per tonne 4.60 0.15 1.32 0.47 ------------------------------------------------------------------------- Margin (loss) per tonne $ 43.82 $ 35.63 $ 44.14 $ 33.37 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total cash cost per ounce $ 3.50 $ 2.28 $ 2.95 $ 2.15 Total production cost per ounce $ 4.15 $ 2.95 $ 3.58 $ 2.81 (In thousands of US dollars) Direct operating costs plus value of metals lost $ 639 $ 496 $ 2,836 $ 1,700 By-product credits - - - - ------------------------------------------------------------------------- Cash operating costs 639 496 2,836 1,700 Depreciation, amortization and reclamation 118 146 609 523 ------------------------------------------------------------------------- Production costs $ 757 $ 643 $ 3,446 $ 2,223 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Ounces for cost per ounce calculations 182,443 217,980 961,869 790,803 San Vicente Mine(xx) Tonnes milled 8,368 - 27,017 - Average silver grade - grams per tonne 436 - 417 - Average zinc grade - percent 6.93% - 5.79% - Silver - ounces 102,578 - 313,029 - Zinc - tonnes 495 - 1,312 - Copper - tonnes 17 - 53 - (xx) Pan American does not include San Vicente production in its cost per ounce calculations. The production statistics represent Pan American`s 50 % interest in the mine`s silver production. Pan American Silver Corp. Consolidated Balance Sheets As at December 31, (in thousands of US Dollars) (UNAUDITED) 2004 2003 Assets Current Cash $ 28,345 $ 14,191 Short-term investments 69,791 74,938 Accounts receivable, net of $nil provision for doubtful accounts 25,757 7,545 Inventories 10,674 6,612 Prepaid expenses 1,684 1,289 ------------------------------------------------------------------------- Total Current Assets 136,251 104,575 Mineral property, plant and equipment 104,647 83,574 Non-producing properties 125,863 83,873 Direct smelting ore 2,671 3,901 Other assets 647 3,960 ------------------------------------------------------------------------- Total Assets $ 370,079 $ 279,883 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities Current Accounts payable and accrued liabilities $ 20,331 $ 10,525 Advances for metal shipments 652 4,536 Current portion of bank loans and capital leases 134 2,639 Current portion of non-current liabilities 479 4,948 ------------------------------------------------------------------------- Total Current Liabilities 21,596 22,648 Deferred revenue - 865 Bank loans and capital lease - 10,803 Liability component of convertible debentures 134 19,116 Provision for asset retirement obligation and reclamation 32,012 21,192 Provision for future income tax liability 33,212 19,035 Severance indemnities and commitments 1,542 2,126 Non-controlling interest 1,379 - ------------------------------------------------------------------------- Total Liabilities 89,875 95,785 ------------------------------------------------------------------------- Shareholders` Equity Authorized: 100,000,000 common shares of no par value Issued: December 31, 2003 - 53,009,851 common shares December 31, 2004 - 66,835,378 common shares 380,571 225,154 Equity component of convertible debentures 633 66,735 Additional paid in capital 10,976 12,752 Deficit (111,976) (120,543) ------------------------------------------------------------------------- Total Shareholders` Equity 280,204 184,098 ------------------------------------------------------------------------- Total Liabilities and Shareholders` Equity $ 370,079 $ 279,883 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Pan American Silver Corp. Consolidated Statements of Operations (in thousands of US Dollars, except per share amounts) (UNAUDITED) Three Months ended Twelve Months ended December 31 December 31 2004 2003 2004 2003 Sales $ 29,386 $ 12,857 $ 92,896 $ 45,122 Cost of sales 22,937 10,816 69,162 39,778 Depreciation and amortization 3,683 1,960 10,869 3,325 ------------------------------------------------------------------------- Mine operating earnings 2,766 81 12,865 2,019 ------------------------------------------------------------------------- General and administrative 1,660 2,041 6,241 5,625 Exploration 960 955 3,838 2,543 Reclamation 410 72 1,315 303 Interest and financing expenses 75 141 898 1,156 Write-down of non-producing property 2,460 - 2,460 - ------------------------------------------------------------------------- Operating loss (2,799) (3,128) (1,887) (7,608) Investment and other income 939 306 2,338 814 Debt settlement expense - - (1,364) - Gain on sale of assets 20,164 - 23,747 - ------------------------------------------------------------------------- Net income (loss) before taxes and non-controlling interest 18,304 (2,822) 22,834 (6,794) Income taxes (2,753) - (2,753) - Non-controlling interest 141 - (179) - ------------------------------------------------------------------------- Net income (loss) for the period $ 15,692 $ (2,822) $ 19,902 $ (6,794) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Attributable to common shareholders: Net income (loss) for the period $ 15,692 $ (2,822) $ 19,902 $ (6,794) Accretion of convertible debentures - - (8,464) - Early conversion premium on convertible debentures - - (2,871) (3,534) ------------------------------------------------------------------------- Net income (loss) for the period attributable to common shareholders $ 15,692 $ (2,822) $ 8,567 $ (10,328) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Earnings (loss) per share Basic $ 0.23 $ (0.05) $ 0.14 $ (0.20) Fully diluted $ 0.23 $ (0.05) $ 0.13 $ (0.20) Weighted average number of shares outstanding Basic 66,788 52,642 63,169 51,058 Fully diluted 68,887 67,989 68,001 66,405 Pan American Silver Corp. Consolidated Statement of Cashflows (in thousands of US Dollars) (UNAUDITED) Three Months ended Twelve Months ended December 31 December 31 2004 2003 2004 2003 Operating activities Net income (loss) for the period $ 15,692 $ (2,822) $ 19,902 $ (6,794) Reclamation expenditures (428) (61) (1,347) (61) Items not involving cash Gain on sale of asset (20,164) (153) (23,747) (318) Depreciation and amortization 3,683 1,960 10,869 3,325 Write-down of non-producing property 2,460 - 2,460 - Non-controlling interest (141) - 179 - Debt settlement expense - - 1,208 - Future income taxes 31 - 31 - Interest accretion on convertible debentures - 595 366 595 Stock-based compensation 302 857 2,189 2,893 Asset retirement and reclamation accretion 410 72 1,315 303 Operating cost provisions 84 152 (1,209) 941 Changes in non-cash working capital items 2,689 (2,333) (9,083) (5,402) ------------------------------------------------------------------------- Cash generated by (used in) operating activities 4,618 (1,733) 3,133 (4,518) ------------------------------------------------------------------------- Financing activities Shares issued for cash 620 2,712 62,437 8,350 Share issue costs - - (180) - Convertible debentures - - - 86,250 Convertible debentures issue costs - (272) - (3,272) Convertible debentures payments (23) - (13,565) - Repayment of bank loans and capital lease (212) 1,231 (13,308) 7,737 ------------------------------------------------------------------------- Cash generated by financing activities 385 3,671 35,384 99,065 ------------------------------------------------------------------------- Investing activities Mineral property, plant and equipment expenditures (6,680) (5,300) (15,367) (16,944) Non-producing property expenditures (688) (514) (1,676) (1,383) Acquisition of net assets of subsidiary, net of cash - - (36,214) 2,393 Proceeds from sale of assets 20,164 153 23,747 318 Sale (purchase) of short-term investments (7,316) (74,925) 5,147 (74,925) ------------------------------------------------------------------------- Cash generated by (used in) investing activities 5,480 (80,586) (24,363) (90,541) ------------------------------------------------------------------------- Increase (decrease) in cash during the period 10,483 (78,648) 14,154 4,006 Cash, beginning of period 17,862 92,839 14,191 10,185 ------------------------------------------------------------------------- Cash, end of period $ 28,345 $ 14,191 $ 28,345 $ 14,191 ------------------------------------------------------------------------- Management`s Discussion and Analysis of Financial Condition and Results of Operations February 24, 2005 Introduction

Management`s discussion and analysis ("MD&A") focuses on significant factors that have affected Pan American Silver Corp.`s and its subsidiaries ("Pan American" or the "Company") performance and such factors that may affect its future performance. In order to better understand the MD&A, it should be read in conjunction with the audited consolidated financial statements and the related notes contained herein. Pan American`s reporting currency is the United States dollar and all amounts in this discussion and in the consolidated financial statements are expressed in United States dollars, unless identified otherwise. The Company reports its financial position, results of operations and cash flows in accordance with Canadian generally accepted accounting principles ("Canadian GAAP").

This MD&A is comprised of the following sections: The "Overview of 2004" provides an analysis of Pan American`s financial results and operating performance, after discussing the significant events and transactions that had a material bearing on the results and performance in 2004. A detailed analysis of each mine`s operating performance in 2004 and our forecasts for 2005 are provided. Also provided in this section is a reconciliation of our consolidated cash and total costs per ounce of silver produced to the operating expenses reported in our consolidated statement of operations. The "Liquidity and Capital Resources" section describes our current financial condition and discusses our expected capital and liquidity requirements for 2005 and beyond. The "Critical Accounting Policies and Estimates" section identifies those accounting estimates that have the largest impact on the financial presentation. The "Risks and Uncertainty" section discusses the risks associated with Pan American`s business and our risk management programs to mitigate such risks. Finally, in the "Outlook" section we provide Pan American`s expectations regarding the Company`s development projects and the metal markets.

Except for historical information contained in this MD&A, the following disclosures are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 or are future oriented financial information and as such are based on an assumed set of economic conditions and courses of action. These include estimates of future production levels, expectations regarding mine production and development programs and capital costs, expected trends in mineral prices and statements that describe Pan American`s future plans, objectives or goals. There is significant risk that actual results will vary, perhaps materially, from results projected depending on such factors as discussed under Risks and Uncertainties in this MD&A and other risk factors listed from time-to-time in the Company`s Annual Information Form or Form 40-F. Additional information about Pan American and its business activities is available on SEDAR at http://www.sedar.com/.

Overview of 2004

To gain an appreciation for Pan American`s financial results and operating performance in 2004, it is important to understand the significant events and transactions that occurred during the year.

Significant Events and Transactions Morococha Acquisition

On February 9, 2004 Pan American announced the signing of a binding agreement with a number of individuals to purchase a direct 81 per cent interest in Compania Minera Argentum S.A. ("Argentum"), which owns the Morococha mine in central Peru. The Company acquired this interest in Argentum for $33.8 million by way of a public offering for Argentum common shares through the Lima Stock Exchange. Subsequent to this offer, the Company purchased an additional 5 per cent interest in Argentum by acquiring investment shares for $1.5 million. In addition, Pan American acquired 100 per cent of Compania Minera Natividad ("Natividad") for $1.5 million, which holds numerous adjacent mineral concessions and owns the primary processing facility. The Company intends to combine Natividad and Argentum in the near future. The statements of operations and balance sheets of Argentum and Natividad were incorporated into Pan American`s consolidated financial statements from July 1, 2004.

Argentum and Natividad (collectively "Morococha") contributed 1.26 million ounces of silver to Pan American`s production in the second half of 2004 at a cash cost of $4.41 per ounce. Over the longer term Morococha is expected to produce 3.0 to 3.5 million ounces of silver annually at a cash cost of approximately $3.50 per ounce.

The fair value of assets and liabilities acquired through the acquisition of Morococha are summarized as follows:

($`000) Current assets (including cash of $657) $ 7,555 Mineral property, plant and equipment 16,745 Non-producing properties 40,472 --------- 64,772 Less: Accounts payable and accrued liabilities (3,937) Provision for asset retirement obligation and reclamation (8,618) Future income tax liability (14,146) Non-controlling interest (1,200) --------- Total purchase price $ 36,871 ---------

The future income tax liability arises due to the fact that the purchase consideration exceeded the carrying value of the mining assets for tax purposes, resulting in a temporary difference between the accounting and tax value. The estimated future income tax liability associated with this temporary difference was $14.1 million and had been recognized as a future income tax liability and also applied to increase the carrying value of the mineral properties.

The provision for asset retirement obligation and reclamation of $8.6 million arises pursuant to CICA Handbook Section 3110 - "Accounting for Asset Retirement Obligations", which required the Company to recognize the expected fair value of future site restoration costs at Morococha as a liability and to increase the carrying value of mineral properties by the same amount. The liability is accreted over time to its anticipated future value with a corresponding charge to the statement of operations while the increase in the carrying value of mineral properties is amortized on a unit of production basis.

To finance the acquisition of the Morococha mine, Pan American closed a common share financing with an institutional investor on March 12, 2004. A total of 3,333,333 Pan American common shares were issued at a price of $16.50 per share for gross proceeds of $55 million.

Debenture Conversion

In July 2003 the Company issued $86.25 million of 5.25 per cent convertible unsecured senior subordinated debentures (the "Debentures") due July 31, 2009. The Company made an offer to induce conversion of the Debentures by the holders between April 7, 2004 and May 21, 2004. Approximately $85.4 million or 99 per cent of the Debenture holders elected to accept the Company`s offer and received $131.25 in cash plus 106.929 common shares of the Company per $1,000 principal amount of the Debentures. The cash component of the offer represented the interest that the Company would have paid on the Debentures up until July 31, 2006, when the Company would, under certain circumstances, have the right to force conversion. In addition, the offer incorporated an additional 2.436 common shares per $1,000 principal amount of Debentures converted, which was equal to a 4 per cent premium. The Company issued 9,135,043 common shares and paid cash of $11.2 million pursuant to this offer. Pan American recorded debt settlement expenses of $1.3 million associated with the induced conversion of the Debentures.

Asset Sales

In November 2004, Pan American announced that it had sold its 20 per cent interest in the Dukat mine in Magadan State, Russia for up to $43 million, of which $20.5 million was received in cash and the remaining $22.5 million is to be received in contingent future payments. No amount has been booked for this additional receivable. The future payments are to be made annually based on the yearly average silver price, and range from no payment if the average silver price is below $5.50 per ounce, to $8 million if the average silver price exceeds $10 per ounce. Under certain circumstances, the Company will be entitled to early settlement of the remaining future payments, such as a public share offering by the buyer, OAO MNPO Polimetall. The Company recorded a gain of $20.1 million on the sale, net of transaction costs. In an unrelated transaction, Pan American also recorded a $3.6 million gain on the sale of surplus land at the Quiruvilca mine during 2004.

Debt Prepayments

The Company prepaid the $9.5 million La Colorada construction loan from the International Finance Corporation ("IFC") on May 17, 2004. Pan American also prepaid the Huaron project loan by making a $3.1 million payment of principal and accrued interest on April 16, 2004.

La Colorada

The La Colorada mine in Mexico reached commercial production on January 1, 2004 after a $20 million expansion, which started in late 2002. As such, all revenue and expense items were recognized in the statement of operations in 2004, after having been capitalized throughout 2003. This change in accounting treatment gives rise to several significant differences when comparing the consolidated statement of operations for 2004 with 2003. During 2004, La Colorada recorded $12.1 million in revenue, $11.2 million in operating costs and $3.6 million in depreciation.

Financial Results

The table below sets out the quarterly results, expressed in thousands of US dollars, for the past 12 quarters, together with select balance sheet information for the prior three years.

------------------------------------------------------------------------- Years Quarters Ended (unaudited) Ended ------------------------------------------------------------------------- 2004 March 31 June 30 Sept. 30 Dec. 31 Dec. 31 ------------------------------------------------------------------------- Revenue $15,151 $20,950 $27,409 $29,386 $92,896 Mine operating earnings(x) $1,838 $2,411 $5,850 $2,766 $12,865 General & Administrative ($803) ($1,202) ($934) ($3,302) ($6,241) Exploration ($528) ($1,137) ($1,213) ($960) ($3,838) Net income/(loss) for the period ($366) $1,287 $3,289 $15,692 $19,902 Net profit/(loss) per share ($0.05) ($0.12) $0.05 $0.23 $0.13 ---------------------------------------- Other financial information: --------------- Total Assets $370,079 Total long-term financial liabilities $68,279 Total Shareholders Equity $280,204 ------------------------------------------------------------------------- 2003 March 31 June 30 Sept. 30 Dec. 31 Dec. 31 ------------------------------------------------------------------------- Revenue $7,822 $12,553 $11,890 $12,857 $45,122 Mine operating earnings/(loss)(x) ($78) $758 $1,258 $81 $2,019 General & Administrative ($401) ($582) ($565) ($4,077) ($5,625) Exploration ($496) ($492) ($600) ($955) ($2,543) Net loss for the period ($1,104) ($442) ($390) ($4,858) ($6,794) Net loss per share ($0.02) ($0.01) ($0.01) ($0.15) ($0.20) ---------------------------------------- Other financial information: --------------- Total Assets $279,883 Total long-term financial liabilities $73,137 Total Shareholders Equity $184,098 ------------------------------------------------------------------------- 2002 March 31 June 30 Sept. 30 Dec. 31 Dec. 31 ------------------------------------------------------------------------- Revenue $10,199 $11,615 $11,195 $12,084 $45,093 Mine operating loss(x) ($432) ($627) ($1,568) ($313) ($2,940) General & Administrative ($359) ($498) ($379) ($781) ($2,017) Exploration ($83) ($260) ($234) ($629) ($1,206) Net loss before Write- down of Properties ($1,303) ($1,247) ($2,258) ($1,951) ($6,759) Write-down of properties $0 $0 ($15,129) ($12,089) ($27,218) Net loss for the period ($1,303) ($1,247) ($17,387) ($14,040) ($33,977) Net loss per share ($0.03) ($0.03) ($0.40) ($0.35) ($0.81) ---------------------------------------- Other financial information: --------------- Total Assets $102,945 Total long-term financial liabilities $27,222 Total Shareholders Equity $55,492 ------------------------------------------------------------------------- Notes (x) Mine operating earnings/(loss) is equal to revenue less operating expenses less depreciation and amortization. The Company did not declare or pay any dividends during the periods under review.

The net income after tax for 2004 was $19.9 million, compared to the net loss for 2003 of $6.8 million. Included in the net income for 2004 were several unusual items including the gain on the sale of the Company`s interest in Dukat for $20.1 million, the gain on the sale of surplus land at Quiruvilca for $3.6 million, the write-off of $2.5 million of obsolete assets and debt settlement expenses of $1.4 million. In addition to these items that occurred during the year, 2004 also marked the first year in which the Company became taxable in Peru and was subject to the 1 per cent royalty imposed by the Peruvian congress in June 2004. Income tax expenses, together with the mandatory workers participation expense totaled $3.3 million for the year, while an additional $0.6 million was accrued with respect to the royalty in Peru.

Mine operating earnings, defined as revenue less operating expenses and depreciation and amortization increased by 537 per cent in 2004 from $2.0 million to $12.9 million as a result of the improving price environment for the metals that the Company produces together with the addition of the Morococha mine. This improvement in mine operating earnings can be seen in stronger gross revenue margins (operating profit/revenue), which increased from 11.8 per cent in 2003 to 27.4 per cent in 2004 and more than offset the impact of higher depreciation and amortization charges in 2004.

Relative to 2003, revenue more than doubled in 2004. The average price for all of the metals that the Company produces increased in 2004 compared to 2003. The average silver price increased 36 per cent, average zinc price increased 26 per cent, average lead price increased 74 per cent and average copper prices increased 60 per cent. Magnifying this improved price environment, the Company achieved a 29 per cent increase in silver production, together with 7 per cent and 9 per cent increases in the production of zinc and copper, respectively, partially offset by a 12 per cent decrease in lead production. The Company also sold more concentrate than it produced in 2004 by reducing its 2003 year-end inventories. At the end of 2004, the Company had slightly over ten thousand tonnes of concentrate in inventory, which represents approximately one month`s production. Revenue was negatively impacted by the effect of the Company`s base metals hedge program, which generated a reduction in revenue of $3.5 million in 2004, compared to a reduction in revenue of $0.1 million in 2003.

Revenue recognition from quarter to quarter can vary significantly, depending on the timing of shipments of concentrates. Shipping delays were the main reason behind the uneven revenue between the first and second quarters in both 2003 and 2004. The acquisition of Morococha, which took effect on July 1, 2004, is the primary reason why revenue increased in the second half of 2004. The variation in quarterly revenue that occurred in Q2 of 2002 was due to the Huaron mine starting commercial production.

General and administrative costs increased by $0.6 million from 2003 reflecting increased staffing costs, a stronger Canadian dollar against the US dollar, increased legal expenses relating to the early conversion offer to the Debentures holders and increased travel costs. The Company completed the staffing of its senior management team during 2004 with the recruitment of several key technical personnel in the areas of geology, health, environment and safety and underground mining. Included in general and administrative expenses was stock-based compensation of $2.2 million (2003 - $2.9 million), which until the fourth quarter of 2004 had been reported as a separate item on the Company`s consolidated statement of operations.

Depreciation and amortization expense was $7.5 million higher in 2004 than 2003. The acquisition of Morococha and La Colorada achieving commercial production accounted for $5.7 million of this increase. Depreciation and amortization expense also increased as a direct result of the Company`s adoption of CICA Handbook Section 3110 - "Accounting for Asset Retirement Obligations", which required the Company to write up its asset values by $8.2 million as at December 31, 2003. The amortization of these higher asset values on a unit of production basis has resulted in an increased depreciation charge.

Exploration expense increased by $1.5 million because of increased activity levels associated with the preparation of a feasibility study at the Company`s Manantial Espejo joint venture project and due diligence expense related to the Company`s business development activities.

Total interest expense during 2004 amounted to $0.9 million, which was lower than the $1.2 million incurred in 2003 as a result of the debenture conversion and debt prepayments described earlier in this MD&A.

For the fourth quarter of 2004, the Company recorded net income after tax of $15.7 million, primarily as a result of the $20.1 million gain on sale of Dukat, partially offset by the $2.5 million non-cash write-off of obsolete assets. The financial results for the fourth quarter of 2004 were influenced by the fact that the Company became taxable in Peru. Also recorded in the fourth quarter`s costs were mandatory workers participation expenses and bonuses totaling $1.2 million to the employees and workers at Huaron, Morococha and Quiruvilca mines in recognition for the record operating performance achieved at each mine during 2004.

The net loss for 2003 was $6.8 million, compared to the net loss for 2002 of $34.0 million, which included the write down at Quiruvilca of $27.2 million. Included in the net loss for 2003 was $2.9 million related to recognition of stock option compensation expenses, of which $2.1 million was for stock options granted in 2003, relating to 2002 performance. The operating results improved greatly in 2003 as compared to 2002 as a result of the improving price environment for metals that the Company produces and continued cost reductions, particularly at the Quiruvilca mine. In addition, the Company`s Pyrite stockpiles, acquired in November 2002, generated approximately $1.7 million in operating profit in 2003.

In 2003, revenue was almost identical to that in 2002. Lower production of zinc and lead in 2003 due to the closure of the high-cost North Zone at the Quiruvilca mine was offset by higher realized metal prices in 2003. General and administrative costs were $1.0 million higher in 2003 compared to 2002 due to the costs associated with recruitment of several new senior staff, increases in insurance premiums and the strengthening of the Canadian dollar against the US dollar. Depreciation and amortization expense was $1.5 million less in 2003 than 2002 primarily due to the write off in 2002 of the carrying value of Quiruvilca, and all of La Colorada`s 2003 expenses being capitalized.

Operating Performance

The following table sets out select historic and 2005 forecast consolidated operating information. For purposes of budgeting for 2005 and the forecast numbers contained in this MD&A, the Company has used the following price assumptions: silver: $6.00 per oz, zinc: $1,000 per tonne ($0.45 per lb), lead: $850 per tonne ($0.39 per lb), copper: $2,600 per tonne ($1.18 per lb). For our concentrate producing mines, we refer to the net smelter return ("NSR"), which is revenue received from buyers of our concentrate, net of smelting and refining charges. The numbers below are based on the assumption that the Company will commence mining activities at its San Vicente mine in Bolivia in March 2005.

------------------------------------------------------------------------- 2005 Forecast 2004 2003 2002 2001 ------------------------------------------------------------------------- Production Silver ounces 13,637,990 11,182,030 8,641,914 7,765,154 6,940,171 Zinc tonnes 43,873 34,086 31,797 39,081 30,894 Lead tonnes 17,912 16,694 18,990 20,790 17,187 Copper tonnes 4,407 3,426 3,143 2,847 2,163 Costs Cash cost per ounce $4.11 $4.25 $4.09 $4.03 $4.35 Non-cash cost per ounce $1.15 $1.08 $0.53 $0.76 $0.68 Total Cost per ounce $5.26 $5.33 $4.62 $4.79 $5.03 -------------------------------------------------------------------------

In 2004, the Company achieved a 29 per cent increase in silver production, together with 7 per cent and 9 per cent increases in the production of zinc and copper, respectively, offset by a 12 per cent decrease in lead production. Increases in silver, zinc and copper production were primarily achieved through the acquisition of the Morococha mine and the expansion at La Colorada. The decrease in lead production was mainly due to the lower lead grades and recoveries experienced at the Huaron mine. The silver production figures for 2003 above include 992,142 ounces of silver (2002 - 252,262 ounces) produced at La Colorada while the mine was in pre-production for accounting purposes.

Consolidated cash costs per ounce exceeded Management`s expectations in 2004 by approximately $0.91 per ounce. The primary reason for this was the higher than expected costs at La Colorada due to increased ground control and ventilation expenditures, coupled with lower than expected production, particularly in the first half of the year. Actual cash costs per ounce at Morococha in the fourth quarter were also significantly above expectations due to lower silver grades and recoveries. The silver grades and recoveries are expected to improve in 2005. There have also been significant costs associated with integrating the Morococha mine into Pan American`s operations including organizational changes and the implementation of safety systems. The strengthening of both the Peruvian sol and the Mexican peso, relative to the US dollar, also negatively impacted operating costs.

Consolidated production in 2005 is forecast at 13.6 million ounces of silver, a 22 per cent increase as compared to 2004. Base metal production is also expected to increase, particularly in the case of zinc production, which we forecast will increase by 28 per cent. The increases in expected production are primarily due to a full year of ownership of Morococha, improvements at La Colorada and production from San Vicente. Consolidated cash costs per ounce of silver produced, net of by-product credits, are forecast to decline by 3.3 per cent to $4.11 per ounce as cost reductions are likely to outweigh increases in costs associated with Peruvian taxes and royalties and the one-third participation by Volcan Minera S.A. de C.V. ("Volcan") in the operating cash flow generated by the Pyrite stockpile operation.

An analysis of each mine`s operating performance in 2004 measured against historical performance follows, together with Management`s forecasts for each operation`s performance in 2005.

Huaron mine

The Company`s largest silver producing mine, Huaron produced 6 per cent less ounces of silver in 2004 as compared to 2003 as a result of a reduction in ore grades and lower recoveries, yet still generated mine operating earnings of $5.1 million. Aided by higher metal prices, this performance was achieved by increasing tonnage milled by 5 per cent to take advantage of excess capacity in the milling facility. As can be seen in the table that follows, the Company plans to continue to increase the annual tonnes milled at Huaron in 2005:

------------------------------------------------------------------------- 2005 Forecast 2004 2003 2002 2001 ------------------------------------------------------------------------- Tonnes Milled 683,200 635,845 605,790 606,300 367,274 Silver ounces 4,197,897 4,080,737 4,365,061 4,527,971 2,897,946 Zinc tonnes 17,033 15,041 18,855 20,896 9,574 Lead tonnes 9,392 10,569 14,246 14,006 8,445 Copper tonnes 2,051 1,754 1,332 1,740 959 Tonnes Shipped Zinc concentrate 33,860 34,314 34,819 43,988 14,237 Lead concentrate 19,444 20,253 27,602 26,219 14,723 Copper concentrate 9,213 7,030 5,687 6,249 3,915 Cost per tonne $40.74 $40.32 $41.87 $38.71 $39.73 Cash cost per ounce $4.10 $3.90 $3.92 $3.66 $3.55 Non-cash cost per ounce $1.09 $1.16 $0.70 $0.46 $0.36 Total Cost per ounce $5.19 $5.06 $4.62 $4.12 $3.91 -------------------------------------------------------------------------

For 2004, the mine`s NSR per tonne exceeded expectations by 14 per cent at $58.98 compared to $51.60, and its cost per tonne was 6% lower than expected at $40.32 compared to $42.67.

Huaron`s average NSR per tonne for 2005 is expected to be approximately $51.25 and its average cost per tonne is forecast at $40.74, which should generate approximately $2.1 million in mine operating earnings. The re-engineering program at Huaron, together with sustaining capital is expected to require about $3.7 million of spending in 2005.

Quiruvilca mine

2003 saw a significant transformation at Quiruvilca. Production levels at the mine were reduced in August of 2003 from approximately 45,000 tonnes per month to approximately 30,000 tonnes per month with the closure of the high-cost North Zone. At this reduced rate, the mine has been able to process higher-grade ore and decrease its operating costs to the point where it became Pan American`s most profitable mine in 2004, generating $9.5 million in mine operating earnings. Quiruvilca produced more silver in 2004 compared to 2003, despite that fact that it milled 14% less tonnage. Last year, Management expected that Quiruvilca would possibly close in the third quarter of 2004, however, exploration success during 2004 has enabled management to prepare a mine plan that will see mining activities continuing at the Quiruvilca mine for at least the next three years and likely beyond. The following table sets out Management`s forecasts for Quiruvilca in 2005 and historical production and cost data going back to 2000.

------------------------------------------------------------------------- 2005 Forecast 2004 2003 2002 2001 2000 ------------------------------------------------------------------------- Tonnes Milled 389,776 381,237 442,093 508,352 568,451 615,382 Silver ounces 2,327,631 2,530,869 2,493,908 2,509,689 3,259,372 3,611,589 Zinc tonnes 10,915 11,709 12,509 17,852 21,009 24,462 Lead tonnes 3,050 3,803 4,361 6,468 8,358 8,740 Copper tonnes 1,243 1,081 1,811 1,107 1,204 1,215 Tonnes Shipped Zinc concen- trate 19,139 19,657 27,481 27,511 39,475 42,039 Lead concen- trate 5,641 11,048 6,425 9,901 12,975 14,899 Copper concen- trate 7,202 6,268 7,938 4,706 5,602 5,970 Cost per tonne $41.86 $45.00 $39.20 $40.01 $43.23 $44.14 Cash cost per ounce $4.03 $3.63 $5.01 $5.15 $4.71 $3.20 Non-cash cost per ounce $0.40 $0.25 $0.17 $1.37 $0.95 $0.82 Total Cost per ounce $4.43 $3.88 $5.18 $6.52 $5.66 $4.02 -------------------------------------------------------------------------

Last year, Management expected Quiruvilca`s average NSR per tonne to be $45.07 and its budgeted average cost per tonne to be $36.41. However the mine realized an average NSR per tonne of $64.02 and its operating costs were about $45.00 per tonne milled. The average NSR per tonne realized for the year was 42 per cent higher than expected due to higher prices and better actual grades and recoveries while higher costs were associated with the decision to extend the mine`s life.

For 2005, Pan American expects Quiruvilca`s average NSR per tonne to be $53.01 and its budgeted average cost per tonne to be $41.86, which should result in a mine operating earnings of approximately $3.4 million. A total of $1.9 million has been budgeted for capital expenditures at Quiruvilca in 2005, including $1.2 million on concurrent reclamation and $0.5 million to extend the conveyer belt system.

Morococha mine

Pan American acquired an 81 per cent interest in the Morococha mine with effect from July 1, 2004 and has subsequently purchased an additional 5 per cent interest. Morococha was immediately accretive to production, cash flow and earnings. Morococha generated $2.2 million of mine operating earnings and $5.2 million in operating cash flow before non-cash working capital items in the second half of 2004. The following table sets out the production and cost data for the second half of 2004 together with Management`s expectations for 2005:

------------------------------------------------------------------------- 2005 Forecast 2H 2004 ------------------------------------------------------------------------- Tonnes Milled 439,371 212,172 Silver ounces 2,557,172 1,259,451 Zinc tonnes 12,924 5,902 Lead tonnes 5,470 2,186 Copper tonnes 975 538 Tonnes Shipped Zinc concentrate 25,417 13,613 Lead concentrate 10,954 4,416 Copper concentrate 4,129 2,399 Cost per tonne $39.47 $42.03 Cash cost per ounce $3.42 $4.41 Non-cash cost per ounce $1.54 $1.53 Total Cost per ounce $4.97 $5.94 ------------------------------------------------------------------------- (x) Production and cost figures are for Pan American`s share only.

Morococha`s average NSR per tonne in 2005 is expected to be about $53.34 against a forecast cost per tonne of $39.47, which should generate mine operating earnings of $2.1 million.

The Company plans to invest heavily in Morococha in 2005 with the primary objective of establishing a long term, proven and probable reserve based mine plan. Approximately $5.1 million is budgeted to be spent on extensive mine development with a further $2.2 million on upgrades to the milling facility and other equipment. An additional $1.0 million is budgeted for exploration, including 20 kilometers of diamond drilling. Pan American also plans on spending $0.7 million on health and safety matters, primarily upgrading safety equipment.

Pyrite Stockpiles

Pan American acquired the right to mine and sell certain stockpiled ore from Volcan in November 2002. In 2004

[goldmaki]

905 W. Riverside Avenue - Suite 311

Spokane, Washington 99201

Phone: [phone]

Fax: [phone]

Email: [e-mail]





FOR IMMEDIATE RELEASE
Release 05-03





MONTANA GOVERNOR SUPPORTS DEVELOPMENT

OF MONTANORE PROJECT



SPOKANE, WA. ---- 22 February, 2005 ---- MINES MANAGEMENT, INC. (Amex: MGN)
---- On Tuesday, February 15th, Governor Bryan Schweitzer of Montana
expressed his support of Mines Management`s Montanore Silver-Copper Project,
emphasizing his recognition of its benefits to the community and state, as
well as his understanding of the project`s environmental acceptability.



A large contingent of community officials, business leaders and citizens
from the city of Libby and Lincoln County traveled six hours by bus on
Tuesday morning to present resolutions unanimously passed by the Libby City
Council and Lincoln County Commission requesting the Governor and the state
legislature to support acceleration of the project`s re-permitting process.



In a statement to the group, Governor Schweitzer said, "What I can say to
you is that I have been a supporter of this project before I was elected and
after I was elected. I like this orebody. We`re going to do what we can to
help you get this project off the ground." The Governor went on to say, "I
am a governor who would like to see Natural Resources prosper in Montana.
I`ve made my living in the natural resources, I understand the natural
resources, I understand how important it is to get Montana`s economy moving
on all levels."



In the Governor`s recent state of the State address, he emphasized, "It is
time to say that Montana is open for business. This means keeping taxes
low, growing existing businesses, and marketing Montana to the world."



Mines Management`s President and CEO, Glenn M. Dobbs, stated, "We have been
assured of the Governor`s support not only for development of the Montanore
Project, but also his desire to encourage business within the state of
Montana. This public expression of support for the Montanore illustrates
his recognition that the working people of Montana are the foundation of a
healthy state, and that he is committed to taking tangible steps toward
attracting business into the region. We believe his support also
illustrates his understanding of the benign nature of the Montanore Mine and
its impact on the environment."



When in production, the project is scheduled to employ 250-300 people with
an annual payroll of more than $10 million, and a mine life of approximately
twenty years. Lincoln County, a rural community in northwest Montana with a
population of 18,000, has one of the highest unemployment rates in the
nation, which exceeds 15%, due to the loss of its logging and mining
industries.



Mines Management, Inc. is a U.S. based mineral development company focused
on the exploration and development of silver dominant deposits. The 2002
acquisition of the Montanore silver-copper project, reported by previous
operators to contain 135 million tons of mineralized material with an
average grade of 1.9 ounces silver per ton and 0.75% copper, is considered
one of the largest silver deposits in the world.



This release contains certain forward-looking statements within the meaning
of the Federal Securities Laws. Such statements are based on assumptions
that the Company believes are reasonable but which are subject to a wide
range of uncertainties and business risks. Factors that could cause actual
results to differ from those anticipated are discussed in the Company`s
periodic filings with the Securities and Exchange Commission, including its
annual report on Form 10-KSB for the year ended December 31, 2003.



Further information about Mines Management, Inc. can be reviewed on the
website for the Securities and Exchange Commission at www.sec.gov or on the
company`s website at www.minesmanagement.com.



Douglas Dobbs
Mines Management, Inc.

Director, Corporate Development & Investor Relations
Phone: [phone]


Fax: [phone]


Email: [e-mail]


Website: www.minesmanagement.com

[goldmaki]

CA6979001089

25.02.2005 14:35:
Pan American Silver to build Alamo Dorado Silver Mine in Mexico

VANCOUVER, Feb. 25 /PRNewswire-FirstCall/ -- Pan American Silver (Nachrichten) (PAAS: NASDAQ; PAA: TSX) is pleased to announce that it will immediately commence development of a new open pit silver mine at its Alamo Dorado silver project located 320 km south of Hermosillo in the state of Sonora, Mexico.

Capital costs for the project will be $76.6 million, including working capital and a contingency allowance. Pan American will fund the project from its cash reserves. The mine has 44 million ounces of silver in proven and probable reserves and a further 9 million ounces in measured and indicated resources(x). Beginning in late 2006, Alamo Dorado will contribute 5 million ounces of silver annually to Pan American at a cash cost of less than $3.25/oz net of gold by-product credits, for a mine life of 8 years.

Construction, which is expected to take 15-18 months, is scheduled to begin in the second quarter this year and will consist of a primary crushing circuit, SAG mill, ball mill grinding circuit, conventional cyanide leaching circuit and a dry, stackable tailings system. Recovery rates for both silver and gold are expected to be in excess of 90%. The mine will also employ a tailings treatment process that recovers virtually all of the sodium cyanide used and also neutralizes mill tailings, thus reducing the mine`s environmental impact and reclamation costs. All permits necessary to build and operate the facility have been obtained.

According to Pan American Chairman Ross Beaty: "Development of Alamo Dorado will increase our forecast silver production to more than 21 million ounces by late 2006, will add to our purity as a silver producer and will generate $147 million in operating cash flow over its life at today`s silver price. Mexico is a great silver-mining country and we will continue looking for additional projects to take advantage of our expertise and growing production profile there."

Pan American Silver Corp. will host a conference call on February 25, 2004 at 10:00 am Pacific Time to discuss the production decision as well as the 2004 year-end results. North American residents dial toll-free to 1-877-825-5811. International participants please dial 1-973-582-2767. The call may also be accessed from the home page of the Company`s website at http://www.panamericansilver.com/." target="_blank" rel="nofollow ugc noopener">http://www.panamericansilver.com/. It will be available for replay for one week after the call by dialing 1-877-519-4471 and using replay pin number 5652616.

For further information Contact: Brenda Radies, VP Corporate Relations [phone] http://www.panamericansilver.com/ (x)Mineral Reserves and Resources as at December 31, 2004 ------------------------------------------------------------------------- Tonnes Grade Grade Silver (000s) (g/t Ag) (g/t Au) (ounces) ------------------------------------------------------------------------- Proven Mineral Reserves 1,019 136 0.43 4,456,000 Probable Mineral Reserves 10,591 116 0.33 39,499,000 Total 11,610 118 0.34 43,955,000 ------------------------------------------------------------------------- Measured Mineral Resources 263 84 0.37 710,000 Indicated Mineral Resources 3,610 71 0.26 8,951,000 Total 3,873 72 0.27 8,241,000 ------------------------------------------------------------------------- Inferred Mineral Resources 518 79 0.34 1,316,000 ------------------------------------------------------------------------- Michael Steinmann, P.Geo.,Vice-President Geology - Operations for Pan American Silver, has estimated the mineral resources and is the Qualified Person for the resources. Martin Wafforn, P.Eng, Director of Mine Engineering for Pan American Silver is the Qualified Person for the proven/probable mineral reserves. CAUTIONARY NOTE

Some of the statements in this news release are forward-looking statements and as such are based on an assumed set of economic conditions and courses of action. These include 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. There is a significant risk that actual results will vary, perhaps materially, from results projected 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.

Pan American Silver Corp.

[goldmaki]

Auch ein kleiner, aber feiner Wert...

01.03.2005 09:30:
Norddeutsche Affinerie: Halten (Nord LB)

Die Analysten der Nord LB bewerten in einer Studie vom 28. Februar die Aktie des Stahl- und Metallunternehmens Norddeutsche Affinerie (Nachrichten) unverändert mit "Halten". Das Kursziel wird von 16,90 Euro auf 19,00 Euro erhöht.

Der Kurs der Norddeutschen Affinerie sei in den vergangenen Wochen außerordentlich volatil gewesen und habe in der Spitze 18,95 Euro erreicht. Die starken Kursbewegungen seien im wesentlichen auf die hohen Schwankungen an den Rohstoffmärkten in den letzten Wochen zurückzuführen. Nicht nur der Kupferpreis profitiere von der hohen asiatischen Nachfrage sowie einer guten Produktnachfrage, auch die Käufe spekulativer Anleger wie Hedge Fonds würden die Preise seit einigen Monaten verstärkt beeinflussen.

Zusätzliche Impulse seien aus dem seit Anfang Februar fallendem Dollarkurs entstanden, so dass der Kupferpreis am 18. Februar ein 18-Jahreshoch erreicht habe. In der zweiten Jahreshälfte 2005 dürfte die hohe Kupfernachfrage auf ein höheres Kupferangebot stoßen, da in 2004 verschiedene Minen wieder investiert und ausgebaut hätten. Daher gehen die Analysten für das Gesamtjahr 2005 nicht von einem höheren Kupferdefizit im Vergleich zum Vorjahr aus.

Für die Geschäftsjahre 2005 und 2006 werde mit einem EPS von 1,15 beziehungsweise 1,25 Euro gerechnet, was einem KGV von 15,7 beziehungsweise 14,5 gleichkomme.

[peter.wedemeier1]

Pan American Silver Corp. wurde 1994 mit einer einfachen Missiongegründet:

für Aktieninvestoren das beste Investmentvehikel zu sein, die eine wirkliche Aussetzung auf höhere Silberpreise wollen. Heute produziert das Unternehmen bereits jährlich mehr als 13 Millionen Unzen Silber in 6 Betrieben in 3 Ländern und hat Ihre 7. Mine im Bau in Mexiko und ein zusätzliches Silberprojekt in Argentinien. Pan American Silver erwartet zum größten Silberproduzenten auf der Welt zu werden mit einer jährlichen Silberproduktion, die auf 23 Millionen Unzen in 2008 wachsen soll.

http://www.panamericansilver.com/

mfg

[konradi]

alles prima. nur das KGV liegt bei 35

[peter.wedemeier1]

[peter.wedemeier1]

[peter.wedemeier1]

[peter.wedemeier1]

[peter.wedemeier1]