Our operations

San Vicente


San Vicente is an underground silver-zinc mine located in the department of Potosí, in   Southern Bolivia. Pan American holds a 95% interest in PASB (Pan American Silver Bolivia). The remaining 5% of PASB is owned by an affiliate of Trafigura Baheer B.V. PASB owns a 50% joint venture interest in, and is the operator of, the San Vicente project. The remaining interest in the joint venture project is held by Corporación Minera de Bolivia (“COMIBOL”), the Bolivian state mining company.

Silver, zinc, and lead mineralization is present as epithermal veins, replacements in brecciated conglomerates, and mineralization in dacitic dykes. Shrinkage stoping is the mining method for narrow vein stopes while sub level long hole mining is used in areas where the veins and structures are more than about 2 meters wide.

Ore is treated by primary crushing, semi-autogenous and ball mill grinding, concentrating in a flotation circuit, and is then thickened and dewatered to produce silver in zinc and copper concentrates. The nominal mill capacity is 750 tonnes per day.


San Vicente’s 2014 silver production of 3.95 million ounces was consistent with the prior year as throughput rates, silver recoveries, and grades all remained stable. The steady throughput in 2014 was achieved despite a two-week shutdown in July that resulted from a strike at the mine. Zinc production decreased by 6% and lead production decreased by 11% primarily on account of lower grades.

Cash costs at San Vicente were $13.16 in 2014, 15% lower than in 2013, primarily as a result of lower concentrate treatment and royalty costs from lower metal prices realized in 2014.

San Vicente’s 2014 all-in sustaining costs per silver ounce sold (“AISCSOS”) decreased by 13% to $13.78 from $15.75 in 2013. The decrease was primarily attributable to 13% more payable silver ounces sold, along with a $4.8 million reduction to sustaining capital expense.


In 2015, we expect similar throughput rates and recoveries to the 2014 levels, and a modest improvement in silver grades due to mine sequencing and reductions in mine dilution through improvements to the mining method. This is expected to result in 2015 silver production of between 4.0 million and 4.15 million ounces, an increase from the 3.95 million ounces produced in 2014. We also anticipate better zinc and lead grades that are expected to drive increased zinc and lead by-product production as well.

2015 cash costs are expected to decline to between $11.00 and $12.00 per silver ounce, from $13.16 per ounce in 2014, due primarily to an expected improvement in by-product credits resulting from higher zinc and lead production. In addition, cash costs are expected to benefit from reductions in royalties from lower metal prices and reduced concentrate treatment costs.

2015 sustaining capital at San Vicente is expected to be between $4.0 million and $5.0 million, an increase from 2014 sustaining capital. Major components of the 2015 sustaining capital budget include $1.0 million in mill equipment refurbishment, $1.1 million in mine equipment replacements, a ventilation raise and pump station installations and $0.6 million in exploration.

2015 AISCSOS at San Vicente is expected to be between $12.25 and $13.25 per ounce, a slight decline from the $13.78 per ounce reported in 2014, as the same factors expected to reduce cash costs in 2015 described above will also benefit AISCSOS.

Mineral Reserves and Resources

Management estimates that the Proven and Probable mineral reserves for the Morococha mine, as at December 31, 2014, are as follows:

San Vicente Mineral Reserves 1, 2, 3

Reserve Category Tonnes (Mt) Grams of Silver per tonne % Zinc % Lead
Proven 1.9 460 3.03 0.39
Probable 0.7 425 2.44 0.49
TOTAL 2.7 451 2.86 0.42


1. Estimated using a price of $18.50 per ounce of silver, $2,000 per tonne of zinc and $2,000 per tonne of lead.

2. Mineral Reserve estimates for the San Vicente mine were prepared under the supervision of, or were reviewed by, Michael Steinmann, P.Geo., and Martin G. Wafforn, P.Eng., as Qualified Persons as that term is defined in NI 43-101.

3. Tonnes are shown for 100% of the San Vicente property. Pan American has a 95% interest in PASB.

Management estimates that the Measured and Indicated mineral resources at the San Vicente mine, as at December 31, 2014, are as follows:

San Vicente Mineral Resources 1, 2, 3, 4

Resource Category Tonnes (Mt) Grams of Silver per tonne % Zinc % Lead
Measured 0.6 169 2.45 0.15
Indicated 0.3 156 2.12 0.12
Inferred 3.0 366 2.68 0.33


1. These mineral resources are in addition to San Vicente mineral reserves.

2. Estimated using a price of $18.50 per ounce of silver, $2,000 per tonne of zinc and $2,000 per tonne of lead.

3. Mineral resource estimates for San Vicente were prepared under the supervision of, or were reviewed by, Michael Steinmann, P.Geo., who is a Qualified Person as that term is defined in NI 43 101.

4. Tonnes are shown for 100% of the San Vicente property. Pan American has a 95% interest in PASB.


In early 2009, a new constitution was enacted in Bolivia that further entrenches the government’s ability to amend or enact certain laws, including those that may affect mining. On May 1, 2011 Bolivian President Evo Morales announced the formation of a multi-disciplinary committee to re-evaluate several pieces of legislation, including the mining law and this has caused some concerns amongst foreign companies doing business in Bolivia due to the government’s policy objective of nationalizing parts of the resource sector. However, Mr. Morales made no reference to reviewing or terminating agreements with private mining companies at that time.

Following several years of uncertainty and speculation, on May 28, 2014 the Bolivian government enacted Mining Law No. 535 (the “New Mining Law”) which is likely to have significant effects on the mining industry in Bolivia. The New Mining Law is based on the principles of the 2009 Bolivian Constitution which enshrined the concept that all natural resources belong to the Bolivian people and that the state was entrusted with its administration. Thus, the provisions of the New Mining Law have further entrenched the state-driven mining regime in the country, including the creation of a new Bolivian mining authority (“AJAM”) to provide principal mining oversight, varying the role of COMIBOL to focus exclusively on managing state-involved mining projects, requiring minimum levels of state participation and profit sharing in certain projects and by mandating that a state representative is appointed as president of the board of directors of mining associations formed under the New Mining Law. The New Mining Law has also been formulated to support the Bolivian economy by encouraging local industrial growth, for instance, by requiring mining companies to first seek the sale of their products to Bolivian counterparties before looking to international refiners and markets. Perhaps most important to us, under the New Mining Law, all pre-existing contracts must migrate to a new form of agreement, with renegotiated terms, within a 12 or 18 month period (as from an initiation date to be established by AJAM). As such, our current joint venture agreement with COMIBOL in connection with the San Vicente mine will need to be renegotiated in order to conform to the New Mining Law. We are assessing the potential impacts of the New Mining Law on its business, but the primary effects on the San Vicente operation and our interest therein will not be known until such time as we have, if compelled to do so, renegotiated the existing contract, and the full impact may only be realized over time. In the meantime, the New Mining Law provides that pre-existing agreements will be respected during the prescribed period of renegotiation and we will take every measure available to enforce its rights under the existing agreement with COMIBOL. There is, however, no guarantee that governmental actions, including possible expropriation or additional changes in the law, and the prescribed renegotiation of our contract will not impact our involvement in the San Vicente operation in a materially adverse way and such actions could have a material adverse effect on us and our business.

Additional risks of doing business in Bolivia include being subject to new higher taxes and mining royalties (some of which have already been proposed or threatened) and threatened expropriation of assets, all of which could have a material adverse effect on our operations or profitability.

Technical Report
Name San Vicente
Location Sud-Chichas Province, Bolivia
Mine Type Underground
Ownership 95.0%
Products Silver rich zinc and lead concentrates
Capacity 750 tpd
Deposit Type Epithermal veins