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Mon Oct 29, 2001
Pan American Silver Retires US$12 Million Loan And Arranges New Credit Facility
Pan American Silver Corp. (NASDAQ: PAAS; TSE: PAA) is pleased to announce the retirement of its US$12 million loan taken out in August 2000 to finance the reconstruction of the Huaron mine in Peru. The remaining US$6.3 million balance of the original two-year loan was prepaid from the proceeds of a new four-year, US$6.5 million credit facility granted by Banco de Credito del Peru. This transaction will result in a US$436,000 reduction in monthly loan repayments (US$571,000 before and US$135,000 after). Huaron's assets are the only collateral pledged under this re-financing, leaving Pan American's other assets unencumbered.
Pan American completed the reconstruction of Huaron in April 2001 and the mine reached commercial production in May. Huaron is operating at design capacity and to the end of September 2001 had produced 1,749,882 ounces of silver, 5,546 tonnes of lead, 5,177 tonnes of zinc and 495 tonnes of copper. The mine's first full year of production in 2002 is forecast to yield about 4.3 million ounces of silver.
Pan American operates three wholly-owned silver mines, Huaron and Quiruvilca in Peru, and La Colorada, in Mexico. The La Colorada mine has operated at a limited scale of 150 tonnes per day since January 2001 and is forecast to produce about 0.75 million ounces of silver this year. Pan American is advancing discussions with several interested parties to debt finance the approximately US$20 million capital needed to expand La Colorada to 750 tonnes per day, which would yield 3.5 million ounces of silver per year.
Pan American is one of North America's leading primary silver producers and has no hedge position in any metal. Silver production in 2001 is forecast at 7.5 million ounces, more than double that of 2000. Full-scale production from La Colorada will result in further production growth in 2002. With all three mines at full-scale operation Pan American will be the purest large silver producer in the world.
Ross J. Beaty, Chairman or
Rosie Moore, VP Corporate Relations
(604) 684-1175
www.panamericansilver.com
The statements that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties that could cause actual results to vary materially from the targeted results. Such risks and uncertainties include those described in the Company's Form 40-F as amended. |
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