Pan American Silver Announces Results of Joaquin Preliminary Feasibility Study
Pan American Silver Announces Results of Joaquin Preliminary Feasibility Study
All amounts are expressed in US$ unless otherwise indicated. This news release contains forward-looking information about
expected future events and financial and operating performance of the Company. Readers should refer to the risks and
assumptions set out in the “Cautionary Note Regarding Forward-Looking Statements and Information” at the end of this news
release.
Suite 1500 - 625 Howe St.
Vancouver, BC Canada, V6C 2T6
604-684-1175
www.panamericansilver.com
PAN AMERICAN SILVER CORP .
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Vancouver, B.C. - Dec. 21, 2017 - Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAAS) (“Pan American”, or
the “Company”) has finalized a preliminary feasibility study on the La Morocha deposit, which is part of the
Joaquin project (“Joaquin”), located in Santa Cruz, Argentina. The study recommends the development of the
La Morocha deposit as an underground mine, with processing to occur at Pan American's Manantial Espejo
mill. Based on the results of the preliminary feasibility study, Pan American's Board of Directors has approved
a capital investment of approximately $37.8 million to construct the La Morocha underground mine and fund
activities up to the point of commercial production (excluding $3.6 million of reimbursable value-added tax
("VAT")).
The Company intends to prepare a technical report (the "Technical Report") pursuant to National Instrument
43-101 - Standards of Disclosure for Mining Projects ("NI 43-101") and file on SEDAR (www.sedar.com). The
Technical Report will also be available on the Company's website (www.panamericansilver.com).
La Morocha Preliminary Feasibility Study Highlights:
• Ore to be delivered to Manantial Espejo for processing is estimated to be 474 thousand tonnes at 721
grams per tonne of silver.
• Life-of-mine recovered silver ounces are estimated at 8.9 million and account for 96% of the total
estimated project revenue. Total recovered gold ounces are estimated at 5,100.
• Metallurgical test work confirms that the Manantial Espejo mill is suited to process the ore from La
Morocha at a slightly higher cost per tonne than the ore from Manantial Espejo. Silver and gold
recovery is estimated to average 81%.
• An estimated mine production and ore transport rate of 600 tonnes per day during peak operations.
• The mining method will be primarily post pillar cut and fill using unconsolidated mine development
waste rock for backfill.
• Ore will be hauled to surface by mine trucks and then transported by road to the Manantial Espejo
processing facility, located 145 kilometres to the south of Joaquin.
• Development of the underground access decline ramp is scheduled to begin in the second quarter of
2018, with first ore production starting in late 2019 and running until the end of 2021.
• The estimated $37.8 million project development capital investment (excluding $3.6 million of
reimbursable VAT) is scheduled to be incurred during 2018 and 2019, and is anticipated to be funded
from the cash flow generated through the Company's operating activities.
• The base case economic estimate for La Morocha is an after-tax net present value ("NPV") of $9.1
million, using a 5% discount rate, with an after-tax internal rate of return ("IRR") of 18%, at assumed
metal prices of $18.50 per ounce silver and $1,300 per ounce gold.
“Developing Joaquin is a low-risk project that enhances the value of our Manantial Espejo processing plant
and infrastructure assets. The ore from La Morocha will supplement ore feed from the underground mine and
stockpiles at Manantial Espejo, as well as the feed from our COSE project. We expect the combined
production from these sources to contribute approximately 21 million ounces of silver to Pan American’s
consolidated silver production over the 2018 to 2021 time period,” said Michael Steinmann, President and
Chief Executive Officer of Pan American. “Furthermore, extending the life of our operations at Manantial
Espejo supports our efforts to continue exploring across our large mineral concessions in the area, including
the attractive exploration potential at the La Negra deposit and other prospects acquired with Joaquin.”
Estimated Production Profile
Silver production
(million ounces) Manantial Espejo COSE Joaquin Annual Total
2018 3.3 0.0 0.0 3.4
2019 2.7 1.6 0.8 5.1
2020 2.9 0.4 4.3 7.6
2021 1.3 0.0 3.8 5.1
Total 10.3 2.0 8.9 21.2
Gold production
(thousand ounces)
2018 30.0 0.1 0.0 30.1
2019 22.8 33.5 1.0 57.3
2020 24.3 8.0 2.8 35.0
2021 11.2 0.0 1.3 12.5
Total 88.2 41.6 5.1 134.9
Totals may not add up due to rounding.
PAN AMERICAN SILVER CORP .
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Mineral Reserve and Resource Estimates
Management estimates that mineral reserves and mineral resources at La Morocha, as at November 30,
2017, are as follows:
Classification Tonnes
Silver (grams per
tonne)
Silver contained
metal (million
ounces)
Gold (grams per
tonne)
Gold contained
metal (thousand
ounces)
Probable 474,000 721 11.0 0.4 6.3
Totals may not add up due to rounding. Mineral reserve estimates were prepared under the supervision of, or
were reviewed by, Martin Wafforn, P . Eng., Senior Vice President Technical Services and Process Optimization of
Pan American. Metal prices used for the mineral reserve estimate were $18.50 per ounce of silver and $1,300 per
ounce of gold.
Classification Tonnes
Silver (grams per
tonne)
Silver contained
metal (million
ounces)
Gold (grams per
tonne)
Gold contained
metal (thousand
ounces)
Indicated 58,000 385 0.7 0.6 1.1
Inferred 6,000 389 0.1 1.3 0.2
Totals may not add up due to rounding. Mineral resource estimates were prepared under the supervision of, or
were reviewed by, Christopher Emerson, FAusIMM, Vice President Business Development and Geology, of Pan
American. Metal prices used for the mineral resource estimate were $25 per ounce of silver and $1,400 per ounce
of gold. Mineral resources do not have demonstrated economic viability, and are in addition to mineral reserves.
Pan American Silver acquired 100% of Joaquin from Coeur Mining, Inc. (“Coeur”) in February 2017. Pan
American owns 100% of the Manantial Espejo mine and processing plant, which has nominal capacity of
2,000 tonnes per day and produces silver and gold doré.
Qualified Persons
This news release was prepared under the supervision and review of Martin Wafforn, P . Eng., Senior Vice
President, Technical Services and Process Optimization, and Christopher Emerson, FAusIMM, Vice President,
Business Development and Geology, who are Qualified Persons as that term is defined by NI 43-101.
Data Verification
The Qualified Persons responsible for the preparation of the Technical Report have verified the data disclosed,
including sampling, analytical, and test data underlying the information contained in this news release.
Geological, mine engineering and metallurgical reviews included, among other things, reviewing mapping,
core logs, and re-logging existing drillholes, review of geotechnical and hydrological studies, environmental
and community factors, the development of the life of mine plan, capital and operating costs, transportation,
taxation and royalties, and review of existing metallurgical test work. In the opinion of the Qualified Persons
responsible for the preparation of the Technical Report, the data, assumptions, and parameters used to
estimate mineral resources and mineral reserves, the metallurgical model, the economic analysis, and the
preliminary feasibility study are sufficiently reliable for those purposes. The Technical Report, when filed, will
contain more detailed information concerning associated QA/ QC and other data verification matters, and the
key assumptions, parameters and methods used by the Company.
PAN AMERICAN SILVER CORP .
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About Pan American Silver
Pan American Silver is one of the world’s largest primary silver producers, providing investors with enhanced
exposure to silver through low-cost operations. Founded in 1994, Pan American Silver is recognized for its
operating expertise, prudent financial management and commitment to responsible development. The
Company is headquartered in Vancouver, B.C. and owns and operates six mines in Mexico, Peru, Argentina
and Bolivia. Our shares trade on NASDAQ and the Toronto Stock Exchange under the symbol "PAAS".
For more information, visit: www.panamericansilver.com.
For more information contact:
Siren Fisekci
VP , Investor Relations & Corporate Communications
Ph: 604-806-3191
Email: [email protected]
PAN AMERICAN SILVER CORP .
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Cautionary Note Regarding Forward-Looking Statements and Information
Certain of the statements and information in this news release constitute “forward-looking statements” within the
meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information”
within the meaning of applicable Canadian provincial securities laws. All statements, other than statements of
historical fact, are forward-looking statements or information. Forward-looking statements or information in this
news release relate to, among other things: the estimated grade of mineral reserves and resources; the
development of La Morocha as an underground mine and the processing of mineralized material at Manantial
Espejo as a viable option for the Company; estimates of operating costs; future financial or operational
performance, including the amount of future production at La Morocha; and our estimated production of silver and
gold during the period 2018 to 2021; the estimated capital investment in respect of the La Morocha Project and
source of funds; the ability of the Company to successfully complete development of La Morocha and COSE on
schedule or on budget, or at all, and the impacts of such projects on the Company, including with respect to
production; the estimates of project NPV and IRR for La Morocha; and the expenditures and success related to any
future exploration or development programs.
These forward-looking statements and information reflect the Company’s current views with respect to future
events and are necessarily based upon a number of assumptions that, while considered reasonable by the
Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and
contingencies. These assumptions include: our mineral reserve and resource estimates and the assumptions upon
which they are based, including geotechnical and metallurgical characteristics of rock confirming to sampled results
and metallurgical performance; tonnage of ore to be mined and processed; ore grades and recoveries; assumptions
and discount rates being appropriately applied to the preliminary feasibility study; success of the Company's
projects, including the La Morocha development; prices for silver and gold remaining as estimated; currency
exchange rates remaining as estimated; availability of funds for the Company's projects; capital, decommissioning
and reclamation estimates; our mineral reserve and resource estimates and the assumptions upon which they are
based; prices for energy inputs, labour, materials, supplies and services (including transportation); no labour-
related disruptions; no unplanned delays or interruptions in scheduled construction and production; all necessary
permits, licenses and regulatory approvals are received in a timely manner; and our ability to comply with
environmental, health and safety laws. The foregoing list of assumptions is not exhaustive.
The Company cautions the reader that forward-looking statements and information involve known and unknown
risks, uncertainties and other factors that may cause actual results and developments to differ materially from
those expressed or implied by such forward-looking statements or information contained in this news release and
the Company has made assumptions and estimates based on or related to many of these factors. Such factors
include, without limitation: fluctuations in silver and gold prices; fluctuations in prices for energy inputs, labour,
materials, supplies and services (including transportation); fluctuations in currency markets (such as the Canadian
dollar and Argentine peso versus the U.S. dollar); operational risks and hazards inherent with the business of
mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or
unexpected geological or structural formations, cave-ins, flooding and severe weather); inadequate insurance, or
inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with, and claims
by, local communities and indigenous populations; our ability to obtain all necessary permits, licenses and
regulatory approvals in a timely manner; changes in laws, regulations and government practices in Argentina,
including environmental, export and import laws and regulations; legal restrictions relating to mining, including in
Santa Cruz, Argentina; risks relating to expropriation; increased competition in the mining industry for equipment
and qualified personnel; and those factors identified under the caption “Risks Related to Pan American’s Business”
in the Company’s most recent form 40-F and Annual Information Form filed with the United States Securities and
Exchange Commission and Canadian provincial securities regulatory authorities, respectively. Although the
Company has attempted to identify important factors that could cause actual results to differ materially, there may
be other factors that cause results not to be as anticipated, estimated, described or intended. Investors are
cautioned against undue reliance on forward-looking statements or information. Forward-looking statements and
information are designed to help readers understand management’s current views of our near and longer term
prospects and may not be appropriate for other purposes. The Company does not intend, nor does it assume any
obligation to update or revise forward-looking statements or information, whether as a result of new information,
changes in assumptions, future events or otherwise, except to the extent required by applicable law.
Cautionary Note to U.S. Investors Regarding References to Mineral Resources and Mineral Reserves
This news release has been prepared in accordance with the requirements of Canadian securities laws, which differ
from the requirements of U.S. securities laws. Unless otherwise indicated, all mineral reserve and mineral resource
estimates included in this news release have been disclosed in accordance with NI 43-101 and the Canadian
Institute of Mining, Metallurgy and Petroleum Definition Standards. NI 43-101 is a rule developed by the Canadian
Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and
technical information concerning mineral projects.
Canadian public disclosure standards, including NI 43-101, differ significantly from the requirements of the United
States Securities and Exchange Commission (the “SEC”), and information concerning mineralization, deposits,
mineral reserve and resource information contained or referred to herein may not be comparable to similar
information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, this
news release uses the terms ‘‘indicated resources’’ and ‘‘inferred resources’’. U.S. investors are advised that, while
such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. The
requirements of NI 43-101 for identification of ‘‘reserves’’ are not the same as those of the SEC, and reserves
reported by Pan American in compliance with NI 43-101 may not qualify as ‘‘reserves’’ under SEC standards. Under
U.S. standards, mineralization may not be classified as a ‘‘reserve’’ unless the determination has been made that
the mineralization could be economically and legally produced or extracted at the time the reserve determination
is made. U.S. investors are cautioned not to assume that any part of an “indicated resource” will ever be converted
into a “reserve”. U.S. investors should also understand that “inferred resources” have a great amount of uncertainty
as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all
or any part of “inferred resources” exist, are economically or legally mineable or will ever be upgraded to a higher
category. Under Canadian securities laws, estimated “inferred resources” may not form the basis of feasibility or
pre-feasibility studies except in rare cases. Disclosure of “contained ounces” in a mineral resource is permitted
disclosure under Canadian securities laws. However, the SEC normally only permits issuers to report mineralization
that does not constitute “reserves” by SEC standards as in place tonnage and grade, without reference to unit
measures. Accordingly, information concerning mineral deposits set forth herein may not be comparable with
information made public by companies that report in accordance with U.S. standards.