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Thu Apr 4, 2002
Pan American Silver Moves Forward On La Colorada Expansion, And Nominates John Willson To Board
Vancouver, British Columbia...(All dollar amounts are expressed in U.S. dollars)...Pan American Silver Corp. (NASDAQ: PAAS, TSE: PAA) has engaged International Finance Corp. (IFC), the private sector lending arm of the World Bank, to arrange project debt financing for a portion of the capital needed to expand the La Colorada silver mine in Mexico. Total capital costs for the expansion, including pre-production interest, financing fees, and $2 million in contingency are estimated at $19.1 million. At 50 percent debt and 50 percent equity financing, and based on a silver price of $4.50 per ounce, the mine expansion is expected to generate at least a 34 percent rate of return. IFC has begun their detailed due diligence on the expansion plan, which, pending agreement on final terms, could result in availability of debt financing by the end of June, and initiation of increased production in the second quarter 2003. Since late 1997, Pan American has spent $21.7 million on acquisition and development of the La Colorada project to its current stage. The Company has funds available for the mine expansion with $15.6 million recently raised, and has already purchased underground ore scoops and a 600 tonne per day oxide mill to add to the current 200 tonne per day sulfide processing circuit. La Colorada's resulting 800 tonne per day operation will produce 3.8 million ounces of silver per year and will be over 90 percent revenue leveraged to silver.
In other corporate news, long-standing director Mr. J.E. (Ted) Fletcher has decided not to seek re-election to Pan American's Board of Directors this year. Pan American thanks Ted for his excellent service to the Company since 1995. To fill the vacancy, Mr. John Willson has agreed to stand for election to the Board in May. Mr. Willson's career as a mining engineer has spanned the world and many commodities. At Cominco he was involved in engineering at the Sullivan mine, led on-site construction at the Black Angel underground zinc project in Greenland, was Vice President of the Northern Group in charge of operations at the Polaris, Pine Point and Con mines, and served as CEO of Western Canada Steel Ltd, a Cominco steel-making subsidiary. Mr. Willson was then CEO of Pegasus Gold Inc. until 1992, when he became CEO of Placer Dome Inc., one of the world's largest gold mining companies, a position he held until his retirement in April 2000. Mr. Willson also served on the board of the World Gold Council, chairing it from 1999 until 2001.
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. All amounts are expressed in U.S. dollars. |
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