Financial & Operating Highlights
Three months ended Nine months ended
September 30 September 30
2005 2004 2005 2004
-------------------------------------------------------------------------
Consolidated Financial Highlights (in thousands of US dollars)
Net income (loss)
for the period $ 2,328 $ 3,289 $ (536) $ 4,210
Earnings (loss) per
share $ 0.03 $ 0.05 $ (0.01) $ (0.11)
Cash flow from
operations before
working capital
adjustments $ 6,959 $ 7,135 $ 11,402 $ 11,580
Capital spending $ 16,482 $39,327(xx) $ 40,575 $45,799(xx)
Exploration expenses $ 545 $ 1,213 $ 2,703 $ 2,878
Cash and short-term
investments $ 68,364 $ 80,839 $ 68,364 $ 80,839
Working capital $ 89,225 $ 97,076 $ 89,225 $ 97,076
(xx)Includes the
acquisition of the
Morococha mine for
$36,214
Consolidated Metals Recovered to Concentrate
Silver metal - ounces 3,202,289 3,162,847 9,286,658 8,047,483
Zinc metal - tonnes 9,977 10,377 28,094 24,899
Lead metal - tonnes 4,113 4,865 11,492 12,955
Copper metal - tonnes 1,042 1,100 3,020 2,370
Consolidated Cost per Ounce of Silver (net of by-product credits)
Total cash cost per
ounce $ 4.15 $ 4.05 $ 4.38 $ 3.98
Total production cost
per ounce $ 5.52 $ 5.21 $ 5.72 $ 5.11
In thousands of US dollars
Direct operating costs,
royalties, treatment
and refining charges $ 30,935 $ 26,808 $ 89,724 $ 66,190
By-product credits (18,769) (15,585) (52,605) (38,263)
-------------------------------------------------------------------------
Cash operating costs 12,165 11,224 37,119 27,927
Depreciation,
amortization &
reclamation 3,998 3,195 11,391 7,903
-------------------------------------------------------------------------
Production costs $ 16,163 $ 14,418 $ 48,511 $ 35,830
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Payable ounces of silver
(used in cost per
ounce calculations) 2,930,179 2,768,841 8,479,763 7,012,651
Average Metal Prices
Silver - London Fixing $ 7.07 $ 6.46 $ 7.06 $ 6.47
Zinc - LME Cash
Settlement per pound $ 0.59 $ 0.44 $ 0.59 $ 0.47
Lead - LME Cash
Settlement per pound $ 0.40 $ 0.42 $ 0.43 $ 0.39
Copper - LME Cash
Settlement per pound $ 1.70 $ 1.29 $ 1.58 $ 1.27
Mine Operations
Highlights Three months ended Nine months ended
September 30 September 30
Morococha Mine(x) 2005 2004 2005 2004
-------------------------------------------------------------------------
Tonnes milled 119,953 112,580 347,023 112,580
Average silver grade -
grams per tonne 216 227 218 227
Average zinc grade -
percent 4.58% 3.69% 4.30% 3.69%
Silver - ounces 705,981 685,937 2,051,128 685,937
Zinc - tonnes 4,455 3,089 11,554 3,089
Lead - tonnes 1,724 1,161 4,228 1,161
Copper - tonnes 227 284 685 284
Total cash cost per
ounce $ 1.99 $ 3.57 $ 2.82 $ 3.57
Total production cost
per ounce $ 3.68 $ 5.21 $ 4.54 $ 5.21
In thousands of US dollars
Direct operating costs,
royalties, treatments
and refining charges $ 8,582 $ 6,540 $ 24,207 $ 6,540
By-product credits (7,322) (4,326) (19,000) (4,326)
-------------------------------------------------------------------------
Cash operating costs 1,260 2,215 5,207 2,215
Depreciation,
amortization,
reclamation 1,077 1,015 3,178 1,015
-------------------------------------------------------------------------
Production costs $ 2,337 $ 3,230 $ 8,385 $ 3,230
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Payable ounces of silver
(used in cost per ounce
calculations) 634,104 619,862 1,847,927 619,862
(x) Production and cost figures are for Pan American's share only.
Pan American's ownership was approximately 87% during the quarter.
Huaron Mine 2005 2004 2005 2004
-------------------------------------------------------------------------
Tonnes milled 167,585 166,965 427,814 481,445
Average silver grade -
grams per tonne 212 228 214 230
Average zinc grade -
percent 2.70% 3.13% 2.86% 3.22%
Silver - ounces 940,400 1,062,949 2,747,189 3,126,738
Zinc - tonnes 2,823 3,856 9,067 11,877
Lead - tonnes 1,635 2,815 5,161 8,660
Copper - tonnes 449 491 1,326 1,250
Total cash cost per
ounce $ 5.13 $ 3.85 $ 5.04 $ 3.89
Total production cost
per ounce $ 6.37 $ 5.12 $ 6.25 $ 5.14
In thousands of US dollars
Direct operating costs,
royalties, treatments,
and refining charges $ 10,456 $ 10,635 $ 31,456 $ 31,604
By-product credits (6,067) (6,909) (18,872) (20,471)
-------------------------------------------------------------------------
Cash operating costs 4,389 3,726 12,583 11,133
Depreciation,
amortization,
and reclamation 1,064 1,234 3,026 3,571
-------------------------------------------------------------------------
Production costs $ 5,453 $ 4,960 $ 15,610 $ 14,704
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Payable ounces of silver
(used in cost per
ounce calculations) 856,228 968,624 2,496,885 2,859,286
Mine Operations
Highlights Three months ended Nine months ended
September 30 September 30
Quiruvilca Mine 2005 2004 2005 2004
-------------------------------------------------------------------------
Tonnes milled 95,539 98,625 275,792 284,590
Average silver grade -
grams per tonne 217 235 223 236
Average zinc grade -
percent 3.34% 3.48% 3.21% 3.66%
Silver - ounces 579,586 654,182 1,723,973 1,892,383
Zinc - tonnes 2,698 2,920 7,472 8,994
Lead - tonnes 754 890 2,103 2,998
Copper - tonnes 366 310 1,009 800
Total cash cost per
ounce $ 3.55 $ 3.55 $ 4.07 $ 3.42
Total production cost
per ounce $ 4.10 $ 3.82 $ 4.62 $ 3.70
In thousands of US dollars
Direct operating costs,
royalties, treatments
and refining charges $ 6,914 $ 6,304 $ 20,251 $ 18,688
By-product credits (5,007) (4,142) (13,723) (12,673)
-------------------------------------------------------------------------
Cash operating costs 1,907 2,161 6,528 6,014
Depreciation,
amortization
and reclamation 296 162 879 487
-------------------------------------------------------------------------
Production costs $ 2,203 $ 2,324 $ 7,407 $ 6,502
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Payable ounces of silver
(used in cost per
ounce calculations) 537,719 608,010 1,603,593 1,757,629
La Colorada Mine
-------------------------------------------------------------------------
Tonnes milled 56,746 34,822 156,209 126,211
Average silver grade -
grams per tonne 510 510 537 457
Silver - ounces 817,744 441,959 2,249,760 1,352,549
Zinc - tonnes - - - 122
Lead - tonnes - - - 136
Total cash cost per
ounce $ 5.48 $ 7.05 $ 5.48 $ 6.41
Total production cost
per ounce $ 7.40 $ 8.83 $ 7.40 $ 8.53
In thousands of US dollars
Direct operating costs,
royalties, treatments
and refining charges $ 4,832 $ 3,316 $ 13,300 $ 9,324
By-product credits (374) (208) (1,009) (793)
-------------------------------------------------------------------------
Cash operating costs 4,458 3,109 12,291 8,531
Depreciation,
amortization,
reclamation 1,561 783 4,308 2,829
-------------------------------------------------------------------------
Production costs $ 6,019 $ 3,982 $ 16,599 $ 11,360
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Payable ounces of silver
(used in cost per
ounce calculations) 813,752 440,854 2,242,188 1,331,696
Three months ended Nine months ended
September 30 September 30
Pyrite Stockpile Sales 2005 2004 2005 2004
-------------------------------------------------------------------------
Tonnes sold 15,076 19,214 46,488 64,050
Average silver grade -
grams per tonne 327 374 327 378
Silver - ounces 158,578 231,115 514,608 779,426
Total cash cost per
ounce $ 1.72 $ 0.10 $ 1.76 $ 0.08
Total production cost
per ounce $ 1.72 $ 0.10 $ 1.76 $ 0.08
In thousands of US dollars
Direct operating costs,
royalties, treatments
and refining charges $ 152 $ 13 $ 510 $ 34
By-product credits - -
-------------------------------------------------------------------------
Cash operating costs 152 13 510 34
Depreciation,
amortization,
reclamation - -
-------------------------------------------------------------------------
Production costs $ 152 $ 13 $ 510 $ 34
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Payable ounces of silver
(used in cost per
ounce calculations) 88,376 131,491 289,169 444,178
San Vincente Mine(xx)
-------------------------------------------------------------------------
Tonnes milled - 7,920 - 18,649
Average silver grade -
grams per tonne - 389 - 408
Average zinc grade -
percent - 7.48% - 5.28%
Silver - ounces - 86,704 - 210,451
Zinc - tonnes - 512 - 817
Copper - tonnes - 15 - 36
(xx) Pan American does not include San Vincente production in its cost
per ounce calculations. The production statistics represent Pan
American's 50% interest in the mine.
Pan American Silver Corp.
Consolidated Balance Sheets
(In thousands of U.S. dollars)
Sep. 30 Dec. 31
2005 2004
(Unaudited) (Audited)
-------------------------------------------------------------------------
Assets
Current
Cash and cash equivalents $ 22,501 $ 28,345
Short-term investments 45,863 69,791
Accounts receivable, net of $Nil
provision for doubtful accounts 20,091 25,757
Inventories 14,233 10,674
Prepaid expenses 4,034 1,684
-------------------------------------------------------------------------
Total Current Assets 106,722 136,251
Mineral property, plant and equipment, net
(note 3) 119,957 104,647
Investment and non-producing properties (note 4) 142,202 125,863
Direct smelting ore 2,343 2,671
Other assets 518 647
-------------------------------------------------------------------------
Total Assets $ 371,742 $ 370,079
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities
Current
Accounts payable and accrued liabilities $ 17,135 $ 20,331
Advances for metal shipments - 652
Current portion of bank loans and capital lease - 134
Current portion of non-current liabilities 362 479
-------------------------------------------------------------------------
Total Current Liabilities 17,497 21,596
Liability component of convertible debentures 99 134
Provision for asset retirement obligation
and reclamation 32,858 32,012
Provision for future income taxes 31,594 33,212
Other liabilities and provisions 1,500 1,144
Severance indemnities and commitments 143 398
Non-controlling interest 2,368 1,379
-------------------------------------------------------------------------
Total Liabilities 86,059 89,875
-------------------------------------------------------------------------
Shareholders' Equity
Share capital (note 5)
Authorized:
100,000,000 common shares of no par value
Issued:
December 31, 2004 - 66,835,378 common shares
September 30, 2005 - 67,166,373 common shares 383,772 380,571
Equity component of convertible debentures 636 633
Additional paid in capital 13,790 10,976
Deficit (112,515) (111,976)
-------------------------------------------------------------------------
Total Shareholders' Equity 285,683 280,204
-------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 371,742 $ 370,079
-------------------------------------------------------------------------
-------------------------------------------------------------------------
See accompanying notes to consolidated financial statements
Pan American Silver Corp.
Consolidated Statements of Operations
(Unaudited - in thousands of U.S. dollars,
except for shares and per share amounts)
Three months ended Nine months ended
September 30 September 30
2005 2004 2005 2004
-------------------------------------------------------------------------
Revenue $ 30,044 $ 27,409 $ 81,030 $ 63,510
Operating costs (21,337) (18,526) (62,134) (46,225)
Depreciation and
amortization (3,788) (3,033) (9,421) (7,186)
-------------------------------------------------------------------------
Mine operating earnings 4,919 5,850 9,475 10,099
-------------------------------------------------------------------------
General and administrative,
including stock-based
compensation 2,065 1,452 5,378 4,581
Exploration 545 1,213 2,703 2,878
Asset retirement and
reclamation 735 302 1,674 905
Interest and financing
expenses 126 66 312 823
-------------------------------------------------------------------------
Operating income (loss) 1,448 2,817 (592) 912
Investment and other income 1,341 792 2,438 3,618
-------------------------------------------------------------------------
Income before taxes and
non-controlling interest 2,789 3,609 1,846 4,530
Income tax benefit
(provision) 79 - (1,609) -
Non-controlling interest (540) (320) (773) (320)
-------------------------------------------------------------------------
Net income (loss) for the
period $ 2,328 $ 3,289 $ (536) $ 4,210
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Attributable to common
shareholders:
Net income (loss) for the
period $ 2,328 $ 3,289 $ (536) $ 4,210
Accretion of convertible
debentures - - (3) (11,302)
-------------------------------------------------------------------------
Adjusted net income (loss)
for the period attributable
to common shareholders $ 2,328 $ 3,289 $ (539) $ (7,092)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Basic and diluted income
(loss) per share $ 0.03 $ 0.05 $ (0.01) $ (0.11)
Weighted average shares
outstanding - Basic 66,943 66,660 66,943 61,947
Weighted average shares
outstanding - Diluted 71,926 72,213 71,532 67,499
See accompanying notes to consolidated financial statements
Pan American Silver Corp.
Consolidated Statements of Cash Flows
(Unaudited - in thousands of U.S. dollars)
Three months ended Nine months ended
September 30 September 30
2005 2004 2005 2004
-------------------------------------------------------------------------
Operating activities
Net income (loss) for
the period $ 2,328 $ 3,289 $ (536) $ 4,210
Reclamation expenditures (324) (327) (824) (919)
Items not involving cash
Gain on sale of assets (453) - (453) (3,583)
Depreciation and
amortization 3,788 3,033 9,421 7,186
Non-controlling interest 540 320 773 320
Accretion on convertible
debentures - - - 366
Stock-based compensation 345 518 1,347 1,887
Debt settlement expense - - - 1,208
Asset retirement and
reclamation 735 302 1,674 905
Future income tax (1,313) - (1,618) -
Changes in operating
working capital items
(note 6) (1,419) (6,722) (1,477) (11,065)
-------------------------------------------------------------------------
Cash generated by
operations 4,227 413 8,307 515
-------------------------------------------------------------------------
Financing activities
Shares issued for cash 1,539 812 2,740 61,817
Share issue costs (180)
Interest payment on
convertible debentures - (22) - (13,542)
Repayment of bank loans
and capital lease (408) (693) (13,096)
-------------------------------------------------------------------------
Cash generated by
financing activities 1,131 790 2,047 34,999
-------------------------------------------------------------------------
Investing activities
Mineral property,
plant and equipment
expenditures (1,856) (2,679) (13,543) (8,687)
Investment and non-
producing property
expenditures (14,626) (434) (27,032) (988)
Acquisition of net
assets of subsidiary - (36,214) - (36,214)
Maturity of short-term
investments 9,630 2,007 23,428 12,463
Proceeds from sale of
assets 383 - 883 3,583
Other 164 - 66 (2,000)
-------------------------------------------------------------------------
Cash used in investing
activities (6,305) (37,320) (16,198) (31,843)
-------------------------------------------------------------------------
(Decrease)/increase in
cash and cash equivalents
during the period (947) (36,117) (5,844) 3,671
Cash and cash equivalents,
beginning of period 23,448 53,979 28,345 14,191
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 22,501 $ 17,862 $ 22,501 $ 17,862
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Supplementary Disclosures
-------------------------
Shares Issued for
Compensation $ - $ 0 $ 410 $ 245
Share purchase warrants
issued $ 2,100 $ - $ 3,100 $ -
Shares issued for
conversion of convertible
debentures $ - $ - $ 88,848 $ -
Cash Payments
Interest paid $ 18 $ 18 $ 36 $ 409
-----------------------------------------------
-----------------------------------------------
Taxes paid $ 1,001 $ 311 $ 4,112 $ 509
-----------------------------------------------
-----------------------------------------------
See accompanying notes to consolidated financial statements
Pan American Silver Corp.
Consolidated Statements of Shareholders' Equity
For the nine months ended September 30, 2005
(in thousands of U.S. dollars, except for amounts of shares)
Common Shares
------------------------ Convertible
Shares Amount Debentures
-------------------------------------------------------------------------
Balance, December 31, 2003 53,009,851 $ 225,154 $ 66,735
Issued on the exercise of stock
options 785,095 9,437 -
Issued on the exercise of share
purchase warrants 544,775 1,965 -
Stock-based compensation - - -
Issued for cash, net of issue costs 3,333,333 54,820 -
Accretion of convertible debentures - - 2,871
Issued on the conversion of
convertible debentures 9,145,700 88,950 (68,973)
Issued as compensation 16,624 245 -
Net income for the year - - -
-------------------------------------------------------------------------
Balance, December 31, 2004 66,835,378 380,571 633
Issued on the exercise of stock
options 300,325 2,780 -
Issued on the exercise of share
purchase warrants 1,186 11 -
Issued warrants on settlement of debt - - -
Stock-based compensation on granting
of stock options - - -
Issued as compensation 29,484 410 -
Accretion of convertible debentures - - 3
Other - - -
Net loss for the period - - -
-------------------------------------------------------------------------
Balance, September 30, 2005 67,166,373 $ 383,772 $ 636
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Additional
Paid in
Capital Deficit Total
-------------------------------------------------------------------------
Balance, December 31, 2003 $ 12,752 $(120,543) $ 184,098
Issued on the exercise of stock
options (3,965) - 5,472
Issued on the exercise of share
purchase warrants - - 1,965
Stock-based compensation 2,189 - 2,189
Issued for cash, net of issue costs - - 54,820
Accretion of convertible debentures - (2,871) -
Issued on the conversion of
convertible debentures - (8,464) 11,513
Issued as compensation - - 245
Net income for the year - 19,902 19,902
-------------------------------------------------------------------------
Balance, December 31, 2004 10,976 (111,976) 280,204
Issued on the exercise of stock
options (51) - 2,729
Issued on the exercise of share
purchase warrants - - 11
Issued warrants on settlement of debt 2,100 - 2,100
Stock-based compensation on granting
of stock options 937 - 937
Issued as compensation - - 410
Accretion of convertible debentures - (3) -
Other (172) - (172)
Net loss for the period - (536) (536)
-------------------------------------------------------------------------
Balance, September 30, 2005 $ 13,790 $(112,515) $ 285,683
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Pan American Silver Corp.
Notes to Unaudited Interim Consolidated Financial Statements as at
September 30, 2005 and 2004 and for the three month and nine month
periods then ended.
(Tabular amounts are in thousands of U.S. dollars, except for numbers of
shares, price per share and per share amounts)
1. Nature of Operations
Pan American Silver Corp (the "Company") is engaged in silver mining and
related activities, including exploration, extraction, processing,
refining and reclamation. The Company has mining operations in Peru,
Mexico and Bolivia, project development activities in Argentina, Mexico
and Bolivia, and exploration activities in South America.
2. Summary of Significant Accounting Policies
a) Basis of Presentation: The accompanying unaudited consolidated
financial statements have been prepared in accordance with accounting
principles generally accepted in Canada for interim financial information
and follow the same accounting policies and methods as our most recent
annual financial statements. Accordingly, they do not include all the
information and footnotes required by accounting principles generally
accepted in Canada for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included.
Operating results for the three-month and nine month periods ended
September 30, 2005 and 2004 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2005.
The consolidated balance sheet at December 31, 2004 has been derived
from the audited financial statements at that date but does not include
all of the information and footnotes required by accounting principles
generally accepted in Canada for complete financial statements. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Pan American Silver Corp. (the
"Company") Annual Report for the year ended December 31, 2004.
b) Principles of Consolidation: The consolidated financial statements
include the wholly-owned and partially-owned subsidiaries of the Company,
the most significant of which are presented in the following table:
Operations and
Ownership Development
Subsidiary Location interest Status Projects
-------------------------------------------------------------------------
Pan American Silver
S.A.C. Peru 100% Consolidated Quiruvilca Mine
Compania Minera Huaron
S.A. Peru 100% Consolidated Huaron Mine
Compania Minera Argentum
S.A. Peru 87.5% Consolidated Morococha Mine
Minera Corner Bay S.A. Mexico 100% Consolidated Alamo Dorado
Project
Plata Panamericana S.A.
de C.V. Mexico 100% Consolidated La Colorada Mine
Inter-company balances and transactions have been eliminated in
consolidation. Investments in corporate joint ventures where the Company
has ownership of 50% or less and funds its proportionate share of
expenditures are accounted for under the equity method. The Company has
no investments in entities in which it has greater than 20% ownership
interest accounted for using the cost method.
c) Revenue Recognition: Revenue is recognized when title and risk of
ownership of metals or metal bearing concentrate passes to the buyer and
when collection is reasonably assured. The passing of title to the
customer is based on the terms of the sales contract. Product pricing is
determined at the point revenue is recognized by reference to active and
freely traded commodity markets.
Under our concentrate sales contracts with third-party smelters, final
commodity prices are set on a specified future quotational period,
typically one to three months, after the shipment arrives at the smelter
based on market metal prices. Revenues are recorded under these contracts
at the time title passes to the buyer based on the expected settlement
period. The contracts, in general, provide for a provisional payment
based upon provisional assays and quoted metal prices. Final settlement
is based on the average applicable price for a specified future period,
and generally occurs from three to six months after shipment. Final sales
are settled using smelter weights, settlement assays (average of assays
exchanged and/or umpire assay results) and are priced as specified in the
smelter contract.
Third party smelting and refining costs are recorded as a reduction
of revenue.
d) Cash and Cash Equivalents: Cash and cash equivalents include cash,
bank deposits, and all highly-liquid investments with a maturity of three
months or less at the date of purchase. The Company minimizes its credit
risk by investing its cash and cash equivalents with major international
banks and financial institutions located principally in Canada and Peru
with a minimum credit rating of A1 as defined by Standard & Poor's. The
Company's management believes that no concentration of credit risk exists
with respect to investment of its cash and cash equivalents. Due to the
short maturity of cash equivalents, their carrying amounts approximate
their fair value.
e) Short-term Investments: Short-term investments principally consist of
highly-liquid debt securities with original maturities in excess of three
months and less than one year. These debt securities include corporate
bonds with S & P rating of A- to AAA with an overall average of single A
high. The Company classifies all short-term investments as
available-for-sale securities. Unrealized gains and losses are recognized
on these investments at the end of each period and are included in
determining net income/(loss).
f) Inventories: Inventories include concentrate ore, dore, ore in
stockpiles and operating materials and supplies. The classification of
inventory is determined by the stage at which the ore is in the
production process. Inventories of ore are sampled for metal content and
are valued based on the lower of actual production costs incurred or
estimated net realizable value based upon the period ending prices of
contained metal. Material that does not contain a minimum quantity of
metal to cover estimated processing expense to recover the contained
metal is not classified as inventory and is assigned no value. All metal
inventories are stated at the lower of cost or market, with cost being
determined using the first-in, first-out method. Supplies inventories are
valued at the lower of average cost and replacement cost, net of
obsolescence. Concentrate and dore inventory includes product at the mine
site, the port warehouse and product held by refineries, and are also
valued at lower of cost or market.
g) Property, Plant, and Equipment: Expenditures for new facilities, new
assets or expenditures that extend the useful lives of existing
facilities are capitalized and depreciated using the straight-line method
at rates sufficient to depreciate such costs over the shorter of
estimated productive lives of such facilities or the useful life of the
individual assets ranging from five to twenty years. Certain mining
equipment is depreciated using the units-of-production method based upon
estimated total proven and probable reserves. Maintenance and repairs are
expensed as incurred.
h) Operational Mining Properties and Mine Development: Mineral
exploration costs are expensed as incurred. When it has been determined
that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to develop
such property including costs to further delineate the ore body and
remove over burden to initially expose the ore body, are capitalized.
Such costs are amortized using the units-of-production method over the
estimated life of the ore body based on proven and probable reserves.
Significant payments related to the acquisition of the land and mineral
rights are capitalized as incurred. Prior to acquiring such land or
mineral rights the Company generally makes a preliminary evaluation to
determine that the property has significant potential to develop an
economic ore body. The time between initial acquisition and full
evaluation of a property's potential is variable and is dependant on many
factors including: location relative to existing infrastructure, the
property's stage of development, geological controls and metal prices. If
a mineable ore body is discovered, such costs are amortized when
production begins. If no mineable ore body is discovered, such costs are
expensed in the period in which it is determined the property has no
future economic value. Interest expense allocable to the cost of
developing mining properties and to construct new facilities is
capitalized until the assets are ready for their intended use. Gains or
losses from sales or retirements of assets are included in other income
or expense. Ongoing mining expenditures on producing properties are
charged against earnings as incurred. Major development expenditures
incurred to increase production or extend the life of the mine are
capitalized.
i) Asset Impairment: Management reviews and evaluates its long-lived
assets for impairment when events or changes in circumstances indicate
that the related carrying amounts may not be recoverable. An impairment
is considered to exist if total estimated future cash flows or
probability-weighted cash flows on an undiscounted basis are less than
the carrying amount of the assets, including mineral property, plant and
equipment, non-producing property, and any deferred costs such as
deferred stripping. An impairment loss is measured and recorded based on
discounted estimated future cash flows or the application of an expected
present value technique to estimate fair value in the absence of a market
price. Future cash flows include estimates of proven, probable, and a
portion of resource recoverable ounces, gold and silver prices
(considering current and historical prices, price trends and related
factors), production levels, capital and reclamation costs, all based on
detailed engineering life-of-mine plans. Assumptions underlying future
cash flow estimates are subject to risks and uncertainties. Any
differences between significant assumptions and market conditions and/or
the Company's performance could have a material effect on any impairment
provision, and on the Company's financial position and results of
operations. In estimating future cash flows, assets are grouped at the
lowest levels for which there are identifiable cash flows that are
largely independent of cash flows from other groups. Generally, in
estimating future cash flows, all assets are grouped at a particular mine
for which there is identifiable cash flow.
j) Reclamation and Remediation Costs: Estimated future reclamation and
remediation costs are based principally on legal and regulatory
requirements.
The asset retirement obligation is measured using assumptions for
cash outflows such as expected labor costs, allocated overhead and
equipment charges, contractor markup, and inflation adjustments to
determine the total obligation. The sum of all these costs are
discounted, using the credit adjusted risk-free interest rate from the
time the Company expects to pay the retirement obligation to the time the
Company incurs the obligation. The measurement objective is to determine
the amount a third party would demand to assume the asset retirement
obligation.
Upon initial recognition of a liability for an asset retirement
obligation, the Company capitalizes the asset retirement cost to the
related long-lived asset. The Company amortizes this amount to operating
expense using the units-of-production method. The Company evaluates the
cash flow estimates at the end of each reporting period to determine
whether the estimates continue to be appropriate. Upward revisions in the
amount of undiscounted cash flows will be discounted using the current
credit-adjusted risk-free rate. Downward revisions will be discounted
using the credit-adjusted risk-free rate that existed when the original
liability was recorded.
k) Foreign Currency Translation: The Company's functional currency is
the U.S. dollar. The accounts of subsidiaries, not reporting in
U.S. dollars, and which are integrated operations, are translated into
U.S. dollars using the temporal method. Under this method, substantially
all assets and liabilities of foreign subsidiaries are translated at
exchange rates in effect at the date of the transaction or at end of each
period. Revenues and expenses are translated at the average exchange rate
for the period. Foreign currency transaction gains and losses are
included in the determination of net income/(loss).
l) Stock-based Compensation Plans: The Company provides stock grants or
options to buy common shares of the Company to directors, officers,
employees and service providers. The board of directors grants such
options for periods of up to ten years, vesting period of up to four
years and at prices equal to or greater than the weighted average market
price of the five trading days prior to the date the options were
granted.
The Company applies the fair-value method of accounting in accordance
with recommendation of CICA Handbook Section ("CICA 3870"), "Stock-based
Compensation and Other Stock-based Payments". Stock-based compensation
expense is calculated using the Black-Scholes option pricing model or
stock at market price.
m) Income Taxes: The Company computes income taxes in accordance with
CICA Handbook Section ("CICA 3465"), "Income Taxes", that requires an
asset and liability approach which results in the recognition of future
tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax basis of
assets and liabilities, as well as operating loss and tax credit
carry-forwards, using enacted or substantially enacted, as applicable,
tax rates in effect in the years in which the differences are expected to
reverse.
n) Use of Estimates: The preparation of financial statements in
conformity with accounting principles generally accepted in Canada
requires the Company's management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
o) Earnings (Loss) Per Share: Basic earnings (loss) per share
calculations are based on the net income (loss) attributable to common
shareholders for the period divided by the weighted average number of
common shares issued and outstanding during the period.
The diluted earnings/(loss) per share calculations are based on the
weighted average number of common shares outstanding during the period,
plus the effects of dilutive common share equivalents. This method
requires that the dilutive effect of outstanding options and warrants
issued should be calculated using the treasury stock method. This method
assumes that all common share equivalents have been exercised at the
beginning of the period (or at the time of issuance, if later), and that
the funds obtained thereby were used to purchase common shares of the
Company at the average trading price of common shares during the period.
For convertible securities that may be settled in cash or shares at
the holder's option the more dilutive of cash settlement and share
settlement is used in computing diluted earnings/(loss) per share. For
settlements in common shares, the if-converted method is used, which
requires that returns on senior convertible equity instruments and income
charges applicable to convertible financial liabilities be added back to
net earnings/(loss), and the net earnings/(loss) is also adjusted for any
non-discretionary changes that would arise from the beginning of the
period (or at the time of issuance, if later).
Potentially dilutive securities totaling 5,013,642 for the nine
months ended September 30, 2005 (74,922, 874,308 and 4,064,412 shares
arising from convertible debentures, outstanding and exercisable stock
options and share purchase warrants, respectively) and 4,904,736 shares
for the nine months ended September 30, 2004 (74,922, 1,015,344 and
3,814,470 shares arising from convertible debentures, outstanding stock
options and share purchase warrants, respectively) were not included as
they were anti-dilutive.
Reclassifications: Certain reclassifications of prior year balances
have been made to conform to current year presentation.
3. Mineral property, plant and equipment
Mineral property, plant and equipment consist of:
September 30, 2005 December 31, 2004
----------------------------- -----------------------------
Cost Accumulated Net Book Cost Accumulated Net Book
Amortization Value Amortization Value
----------------------------- -----------------------------
Morococha
mine, Peru $ 32,347 $ (5,352) $ 26,995 $ 18,217 $ (2,099) $ 16,118
La Colorada
mine, Mexico 60,571 (9,435) 51,136 54,848 (5,261) 49,587
Huaron mine,
Peru 57,656 (18,733) 38,923 53,628 (16,039) 37,589
Quiruvilca
mine, Peru 17,007 (14,643) 2,364 25,601 (24,616) 985
Other 1,121 (582) 539 904 (536) 368
-----------------------------------------------------------
TOTAL $168,702 $(48,745) $119,957 $153,198 $(48,551) $104,647
-----------------------------------------------------------
-----------------------------------------------------------
4. Investment and non-producing properties
Acquisition costs of investment and non-producing properties together
with costs directly related to mine development expenditures are
deferred. Exploration expenditures on investment and non-producing
properties are charged to operations in the period they are incurred.
The carrying values of these properties are as follows:
September 30, 2005 December 31, 2004
----------------------------- -----------------------------
Cost Accumulated Net Book Cost Accumulated Net Book
Amortization Value Amortization Value
----------------------------- -----------------------------
Morococha
mine, Peru $ 31,052 $ - $ 31,052 $ 40,472 $ - $ 40,472
Manantial
Espejo,
Argentina 3,446 - 3,446 2,012 - 2,012
Alamo Dorado,
Mexico 104,361 - 104,361 81,692 - 81,692
San Vicente,
Bolivia 1,814 - 1,814 - - -
Other 1,529 - 1,529 1,687 - 1,687
-----------------------------------------------------------
TOTAL $142,202 $ - $142,202 $125,863 $ - $125,863
-----------------------------------------------------------
-----------------------------------------------------------
5. Share Capital
a) Share Option Plan
The Company has a comprehensive stock option plan for its employees,
directors and officers. The plan provides for the issuance of incentive
stock options to acquire up to a total of 10% of the issued and
outstanding common shares of the Company on a non-diluted basis. The
exercise price of each option shall be the weighted average trading price
of the Company's stock on the five days prior to the award date. The
options can be granted for a maximum term of 10 years with vesting
provides determined by the Company.
The following table summarizes information concerning stock options
outstanding as at September 30, 2005:
Options Outstanding Options Exercisable
-----------------------------------------------
Number Weighted Number
Outstanding Average Exercisable Weighted
as at Remaining as at Average
Range of Year of September Contractual September Exercise
Exercise Prices Expiry 30, 2005 Life (months) 30, 2005 Price
-------------------------------------------------------------------------
$4.31 - $7.93 2006 86,333 8.51 86,333 $5.08
$8.32 - $8.70 2007 308,500 25.41 266,500 $8.62
$7.67 - $12.43 2008 357,308 32.99 37,308 $8.74
$14.21 - $19.72 2009 424,108 42.45 214,108 $16.63
$4.31 - $16.19 2010 294,000 61.32 74,000 $10.55
-------------------------------------------------------------------------
1,470,249 34.14 678,249 $9.92
-------------------------------------------------------------------------
-------------------------------------------------------------------------
During the nine month period ended September 30, 2005, 300,325
common shares were issued for proceeds of $2.7 million in connection with
the exercise of options. Also in the period the Company recognized
$0.9 million of stock-based compensation expense for options issued in
2005, 2004 and 2003. The Company used as its assumptions for calculating
expense a discount rate of 3.4%, volatility of 55.6, 42.0, and 41.0 for
expected lives of 3.0, 2.3, and 1.5, respectively and an exercise price
of Cdn $18.80 per share.
b) Share purchase warrants
On September 15, 2005 the Company issued 255,781 share purchase
warrants to the International Finance Corporation ("IFC") as settlement
for the cancellation of the obligation related to payments on the La
Colorada Mine. The warrants have a fair value of $2.1 million and allow
the holder to purchase 255,781 common shares of the Company for $16.91
per share for a period of 5 years after the date of issue.
As at September 30, 2005 there were warrants outstanding that allow
the holders to purchase 3,808,626 common shares of the Company at
Cdn$12.00 per share, which expire on February 20, 2008.
In the period, 1,186 common shares were issued for proceeds of $11 in
connection with the exercise of outstanding warrants.
6. Changes in operating working capital items
The following table summarizes the changes in operating working capital
items:
Three Months Ended Nine Months Ended
September 30 September 30
-----------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------
Short - term investments $ - (475) $ - $ (475)
Accounts receivable (155) (3,320) 5,666 (5,047)
Inventories (1,416) (212) (2,147) 803
Prepaid expenses (1,450) (210) (2,350) (1,241)
Accounts payable and accrued
liabilities 2,722 (1,635) (1,739) (3,029)
Advances for metal shipments (367) (1,388) (652) (3,292)
Severance, indemnities and
commitments (753) 518 (255) 1,216
-------------------------------------------------------------------------
$ (1,419) $ (6,722) $ (1,477) $ (11,065)
-------------------------------------------------------------------------
-------------------------------------------------------------------------
7. Segmented information
Substantially all of the Company's operations are within the mining
sector, conducted through operations in six countries. Due to differences
between mining and exploration activities, the Company has a separate
budgeting process and measures the results of operations and exploration
activities separately. The Corporate office provides support to the
mining and exploration activities with respect to financial, human
resources and technical support.
Segmented disclosures and enterprise-wide information are as follows:
For the three months ended September 30, 2005
-------------------------------------------------------------------------
Mining & Development Investment
-------------------- and Corporate Total
Mexico Peru exploration
-------------------------------------------------------------------------
Revenue from
external
customers $ 5,355 $ 24,731 $ - $ (42) $ 30,044
Investment and
other income $ (5) $ 13 $ 420 $ 913 $ 1,341
Interest and
financing
expenses $ - $ (154) $ - $ 28 $ (126)
Exploration $ - $ (511) $ (193) $ 159 $ (545)
Depreciation and
amortization $ (1,489) $ (2,274) $ (8) $ (17) $ (3,788)
Net income (loss)
for the period $ (1,803) $ 3,358 $ (271) $ 1,044 $ 2,328
Property, plant and
equipment capital
expenditures $ 12,186 $ 4,033 $ 1,970 $ (1,707) $ 16,482
Segment assets $ 82,362 $ 136,518 $ 89,761 $ 63,101 $ 371,742
For the three months ended September 30, 2004
-------------------------------------------------------------------------
Mining & Development Investment
-------------------- and Corporate Total
Mexico Peru exploration
-------------------------------------------------------------------------
Revenue from
external
customers $ 2,901 $ 25,155 $ - $ (647) $ 27,409
Investment and
other income $ 3 $ 5 $ 559 $ 225 $ 792
Interest and
financing
expenses $ - $ (66) $ - $ - $ (66)
Exploration $ (1) $ (48) $ (387) $ (777) $ (1,213)
Depreciation and
amortization $ (618) $ (2,404) $ - $ (11) $ (3,033)
Net income (loss)
for the period $ (993) $ 6,360 $ 169 $ (2,247) $ 3,289
Property, plant and
equipment capital
expenditures $ 1,493 $ 36,537 $ 422 $ 875 $ 39,327
Segment assets $ 51,530 $ 127,461 $ 90,575 $ 72,382 $ 341,948
For the nine months ended September 30, 2005
-------------------------------------------------------------------------
Mining & Development Investment
-------------------- and Corporate Total
Mexico Peru exploration
-------------------------------------------------------------------------
Revenue from
external
customers $ 14,738 $ 69,792 $ - $ (3,500) $ 81,030
Investment and
other income $ (5) $ 439 $ 399 $ 1,605 $ 2,438
Interest and
financing
expenses $ - $ (267) $ - $ (45) $ (312)
Exploration $ (2) $ (511) $ (2,077) $ (113) $ (2,703)
Depreciation and
amortization $ (3,439) $ (5,944) $ (8) $ (30) $ (9,421)
Net income (loss)
for the period $ (1,952) $ 8,994 $ (2,418) $ (5,160) $ (536)
Property, plant and
equipment capital
expenditures $ 26,702 $ 12,149 $ 3,404 $ (1,680) $ 40,575
Segment assets $ 82,362 $ 136,518 $ 89,761 $ 63,101 $ 371,742
For the nine months ended September 30, 2004
-------------------------------------------------------------------------
Mining & Development Investment
-------------------- and Corporate Total
Mexico Peru exploration
-------------------------------------------------------------------------
Revenue from
external
customers $ 8,912 $ 57,295 $ - $ (2,697) $ 63,510
Investment and
other income $ 14 $ 3,438 $ 785 $ (619) $ 3,618
Interest and
financing
expenses $ (229) $ (229) $ - $ (365) $ (823)
Exploration $ (15) $ (48) $ (556) $ (2,259) $ (2,878)
Depreciation and
amortization $ (2,238) $ (4,915) $ - $ (33) $ (7,186)
Net income (loss)
for the period $ (2,386) $ 16,822 $ 203 $ (10,429) $ 4,210
Property, plant and
equipment
Capital
expenditures $ 4,472 $ 39,456 $ 897 $ 1,064 $ 45,889
Segment assets $ 51,530 $ 127,461 $ 90,575 $ 72,382 $ 341,948
Management's Discussion and Analysis
of Financial Condition and Results of Operations
For the Three Months Ended September 30, 2005
October 24, 2005
This Management's Discussion and Analysis ("MD&A") of Pan
American Silver Corp. (the "Company") focuses on significant factors
that affected the performance, and those that may affect the future
performance, of the Company and its subsidiaries'. The MD&A should be read
in conjunction with the unaudited consolidated financial statements of the
Company, and the notes thereto, for the three months ended
RESULTS OF OPERATIONS
Net income for the three months ended
Revenue from metal sales for the third quarter of 2005 was
Operating costs for the three months ended
Mine operating earnings in the third quarter of 2005 were
Mine
operating Net income/ Net income/
Year Quarter earnings/ (loss) for (loss) per
(unaudited) Revenue (loss)(1) the period share
-------------------------------------------------------------------------
2005 Sept. 30 $ 30,044 $ 4,919 $ 2,328 $ 0.03
June 30 $ 23,905 $ 3,073 $ 24 $ 0.00
March 31 $ 27,081 $ 1,483 $ (2,891) $ (0.05)
-------------------------------------------------------------------------
2004 Dec. 31 $ 29,386 $ 2,766 $ 15,692 $ 0.23
Sept. 30 $ 27,409 $ 5,850 $ 3,289 $ 0.05
June 30 $ 20,950 $ 2,411 $ 1,287 $ (0.12)(2)
March 31 $ 15,151 $ 1,838 $ (366) $ (0.05)(2)
-------------------------------------------------------------------------
2003 Dec. 31 $ 12,857 $ 81 $ (4,858) $ (0.15)(2)
Sept. 30 $ 11,890 $ 1,258 $ (390) $ (0.01)(2)
June 30 $ 12,553 $ 758 $ (442) $ (0.01)
March 31 $ 7,822 $ (78) $ (1,104) $ (0.02)
(1) Mine operating earnings/(loss) are equal to revenues less operating
costs and depreciation and amortization
(2) Includes charges associated with early conversion and accretion of
the Debentures
Depreciation and amortization charges for the third quarter of 2005
increased to
General and administration costs for the three-month period ended
Exploration expenses recorded for the third quarter of 2005 were
Reclamation expenses for the third quarter of 2005 increased to
Interest and financing expenses incurred in the third quarter of 2005 were
Investment and other income for the third quarter of 2005 increased to
Income tax benefit of
METAL PRODUCTION
Pan American produced 3,202,289 ounces of silver in the third quarter of
2005, the highest quarterly silver production achieved by the Company in its
eleven year history. Record silver production was achieved at both La Colorada
and Morococha during the quarter. For the first nine months of 2005, silver
production has increased by 1.2 million ounces or 15 per cent as compared to
year-to-date production in 2004. This increase in the silver production was
achieved primarily through the acquisition of Morococha, which was effective as
of
As shown in the following table, zinc and copper production for the first
nine months of the year were also significantly higher than production in the
corresponding period of 2004, even without production from the San Vicente mine
in
Three months ended Nine months ended
September 30 September 30
% %
2005 2004 Change 2005 2004 Change
-------------------------------------------------------------------------
Silver metal
- ounces 3,202,289 3,162,847 1 9,286,658 8,047,483 15
Zinc metal
- tonnes 9,977 10,377 (4) 28,094 24,899 13
Lead metal
- tonnes 4,113 4,865 (15) 11,492 12,955 (11)
Copper metal
- tonnes 1,042 1,100 (5) 3,020 2,370 27
The Morococha mine maintained its trend of increasing silver production and
lowering its cash cost per ounce over the first three quarters of 2005. For the
three-month period ended
The results of the Company's exploration activities at Morococha, which were
contained in a news release dated
The La Colorada mine production continued its improving trend during the
third quarter with record silver production of 817,744 ounces at cash costs of
During the third quarter of 2005, the Quiruvilca mine managed to reduce its
cash costs per payable ounce from those recorded in each of the first two
quarters of 2005. While the mine continued to encounter slightly lower silver
grades than in the previous year, cost control measures and higher by-product
credits from base metal production enabled the Quiruvilca mine to produce
579,586 ounces at the same cash cost of
At the Huaron mine, mining and processing rates in the third quarter of 2005
continued to increase over those achieved in the first two quarters of the
year, however grades and recoveries remained significantly lower than those
historically experienced. Lower grades and recoveries had a negative impact on
silver production, which resulted in approximately 12 per cent lower production
than that recorded in the third quarter of 2004; however silver production was
higher than that achieved in the first two quarters of 2005. Base metal grades
and recoveries have also declined due to a change in the ore type in the areas
currently being mined. The significance of lower grades and recoveries from
Huaron's base metal production can be seen in the 33 per cent increase over
last year's cash costs per payable ounce. Cash costs per payable ounce for the
third quarter of 2005 were
The Company's Pyrite Stockpile operation produced 158,578 ounces of silver
during the quarter at a cash cost of
In
The Company expects consolidated silver production for 2005 to be
approximately 12.5 million ounces, in-line with the revised forecast provided
at the end of the second quarter of 2005. The Company expects consolidated cash
costs per payable ounce over the remainder of the year to be similar to the
third quarter's costs and estimates total consolidated cash cost for 2005 to be
below
CASH AND TOTAL PRODUCTION COSTS PER OUNCE FOR PAYABLE SILVER
Consolidated cash costs per ounce for the three-month period ended
Taking effect from the first quarter of 2005, the Company changed its method
for calculating cash and total costs per ounce of silver. In the past, these
calculations were based on produced ounces, as set out on page 11 of the
Consolidated Financial Statements for the year ended
The non-GAAP measures of cash and total cost per ounce of payable silver are
used by the Company to manage and evaluate operating performance at each of the
Company's mines and are widely reported in the silver mining industry as
benchmarks for performance, but do not have standardized meaning. To facilitate
a better understanding of this measure as calculated by the Company, we have provided
a detailed reconciliation of this measure to our operating costs, as shown in
our unaudited Consolidated Statement of Operations for the three- and
nine-month periods ended
Three months ended Nine months ended
September 30 September 30
2005 2004 2005 2004
--------------------------------------------
Operating Costs $ 21,337 $ 18,526 $ 62,134 $ 46,226
Add/(Subtract)
Smelting, refining,
and transportation
charges 9,469 8,267 27,204 19,426
By-product credits (19,815) (16,530) (55,431) (39,209)
Mining royalties
and worker's
participation 125 219 379 251
Change in
inventories 733 747 2,464 1,041
Other 492 476 1,157 674
Minority interest
adjustment (175) (484) (779) (484)
-------------------------------------------------------------------------
Cash Operating
Costs A $ 12,165 $ 11,222 $ 37,126 $ 27,925
Add/(Subtract)
Depreciation and
amortization 3,788 3,033 9,421 7,186
Asset retirement
and reclamation 736 302 1,674 905
Change in
inventories (45) 0 1,016 0
Other (327) 82 (245) 34
Minority interest
adjustment (154) (222) (475) (222)
-------------------------------------------------------------------------
Production Costs B $ 16,163 $ 14,416 $ 48,518 $ 35,828
Payable Ounces
of Silver C 2,930,179 2,768,841 8,479,763 7,012,651
--------------------------------------------
Total Cash Cost
per Ounce (A(x)1000)/B $ 4.15 $ 4.05 $ 4.38 $ 3.98
--------------------------------------------
Total Produc-
tion Costs
per Ounce (B(x)1000)/C $ 5.52 $ 5.21 $ 5.72 $ 5.11
--------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
At
Working capital at
Capital resources at
During the third quarter, the Company issued 255,781 warrants to the
International Finance Corporation ("IFC") in exchange for the
termination of past and future obligations relating to production from the La
Colorada mine. Each warrant issued entitles the IFC to purchase one common
share of Pan American at a price of US$ 16.91 over a five-year period. These
warrants were negotiated with the IFC during the second quarter of 2005 and
issued as settlement of the Company's obligation to the IFC with a fair value
of
Based on the Company's financial position at
Pan American mitigates the price risk associated with its base metal
production by selling some of its forecasted base metal production pursuant to
forward sales contracts, all of which are designated hedges for accounting
purposes. At
At the end of the third quarter of 2005, the Company had fixed the price of
1,000,000 ounces of silver produced during the third quarter and contained in
concentrates, which are due to be priced in October and November of 2005 under
the Company's concentrate sales contracts. The price fixed for these ounces
averaged
In anticipation of capital expenditures in Mexican pesos ("MXN")
relating to the construction of Alamo Dorado, the Company has purchased MXN 301
million settling between
EXPLORATION AND DEVELOPMENT ACTIVITIES
The development of the Company's Alamo Dorado project in
The Company spent
The Company is in the final stages of feasibility study for its 50 per cent
owned Manantial Espejo project in