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Pan American Silver Corp
Symbol PAAS
Shares Issued 153,448,356
Close 2019-02-20 C$ 19.32
Market Cap C$ 2,964,622,238
Recent Sedar Documents

Pan American has 2018 P+P reserves of 279.8 MMoz Ag

2019-02-20 20:08 ET - News Release

Mr. Christopher Emerson reports

PAN AMERICAN SILVER REPORTS MINERAL RESERVES OF 280 MILLION OUNCES AND CONTINUED SUCCESS AT THE LA COLORADA SKARN DISCOVERY

Pan American Silver Corp. has released its mineral reserves and resources as at Dec. 31, 2018. Pan American's mineral reserves are estimated to contain approximately 280 million ounces of silver and 1.7 million ounces of gold. All financial figures are expressed in U.S. dollars unless otherwise indicated.

The following year-over-year silver reserves changes section provides the changes in Pan American's estimated silver reserves year over year.

Year-over-year silver reserves changes

Proven and probable silver mineral reserves as of Dec. 31, 2017 (1):  288.4 million ounces

Less: contained ounces mined during 2018:  (29.7 million ounces)

Plus: contained ounces discovered by exploration during 2018:  21.1 million ounces

Proven and probable silver mineral reserves as of Dec. 31, 2018 (2) (3):  279.8 million ounces

(1) Prices used to estimate mineral reserves for 2017 were $18.50 per ounce of silver, except at Manantial Espejo, where $16.50 per ounce of silver was used for planned 2018 production, reverting to $18.50 per ounce of silver thereafter.

(2) Prices used to estimate mineral reserves for 2018 were $18.50 per ounce of silver, except at Manantial Espejo, where $16.50 per ounce of silver was used.

(3) Please refer to the complete mineral reserves and mineral resources tables attached to this news release for more detailed information.

"Two thousand eighteen was a very successful year for near-site mine exploration with the replacement of over 21 million ounces of silver and the major skarn discovery at La Colorada, which is not yet reflected in our proven and probable reserves or resources," said Christopher Emerson, Pan American's vice-president, business development and geology. "Drill hole U-68-18 with 308 metres of polymetallic mineralization is another impressive result of this major discovery."

2018 exploration results

Pan American spent $18.8-million on exploration drilling in 2018, of which $11.3-million was included in capital for mine and near-site drilling, and the rest was expensed under exploration and project development costs. Drilling for mine and near-site exploration totalled 106,000 metres, with La Colorada and Morococha accounting for over 65 per cent of the metres drilled. An additional 10,000 metres were drilled for regional exploration.

La Colorada (Mexico) -- added 11.1 million ounces of new silver reserves with approximately 14,000 metres drilled to further define the main vein continuity laterally and at depth. The company also drilled approximately 6,800 metres to further define the manto and skarn mineralization discovery announced on Oct. 23, 2018.

Exploration drilling of the skarn mineralization at depth, approximately 500 to 800 metres below the drill stations, indicates wide intercepts with high-grade, polymetallic mineralization. In particular, drill hole U-87-18, which was drilled 200 metres south of drill hole U-39-18 (reported in Pan American's news release dated Oct. 23, 2018, with 223 metres of polymetallic mineralization), is located in previously untested areas of the mine concession. Visit the company website to view cross-sections, plan and images of the mineralized core.

Recent drill highlights include:

  • U-60-18: 44.5 metres at 40 grams per tonne silver, 0.10 per cent copper, 1.97 per cent lead and 4.71 per cent zinc;
  • 48.8 m at 29 g/t Ag, 0.17 per cent Cu, 1.39 per cent Pb and 4.33 per cent Zn;
  • 67.9 m at 18 g/t Ag, 0.07 per cent Cu, 0.57 per cent Pb and 4.67 per cent Zn;
  • U-68-18: 308.1 m at 46 g/t Ag, 0.20 per cent Cu, 1.93 per cent Pb and 4.56 per cent Zn;
  • Including 65.7 m at 80 g/t Ag, 0.40 per cent Cu, 2.34 per cent Pb and 5.73 per cent Zn;
  • Including 75.0 m at 70 g/t Ag, 0.23 per cent Cu, 3.01 per cent Pb and 6.02 per cent Zn;
  • Including 90.4 m at 38 g/t Ag, 0.19 per cent Cu, 2.25 per cent Pb and 6.15 per cent Zn;
  • U-87-18: 64.7 m at 33 g/t Ag, 0.16 per cent Cu, 1.99 per cent Pb and 2.93 per cent Zn;
  • Including 11.5 m at 71 g/t Ag, 0.31 per cent Cu, 4.47 per cent Pb and 4.57 per cent Zn.

A summary of the drill results from the recently completed 6,800 metres of drilling is provided in this news release.

Morococha (Peru) -- added 7.7 million ounces of new silver reserves, in addition to an increase of 76,000 tonnes of zinc and 21,000 tonnes of lead, which is associated with the increase in polymetallic mineralization at depth. The continued exploration drilling success at Morococha underlines the potential of this district, especially in the eastern portion of the mine.

Huaron (Peru) -- added 4.9 million ounces of silver, primarily through the conversion of resources on the principal structures to reserves due to the 100 level deepening project.

Manantial Espejo/Joaquin/COSE (Argentina) -- 3.5 million ounces of silver reserves were depleted from the low-grade stockpile and underground mine at Manantial Espejo. The company is focused on the development of the high-grade Joaquin and COSE deposits to supplement ore from Manantial Espejo. Exploration drilling at Manantial Espejo continued to define mineralized shoots along the Maria vein.

2019 exploration program

In 2019, Pan American plans to invest approximately $20-million in exploration and complete about 122,000 metres of diamond drilling. About 42,000 metres of drilling will be directed toward the skarn discovery at La Colorada to release an initial mineral resource estimation later in 2019.

Future mineral reserve and resource updates

Pan American intends to provide future mineral reserve and resource updates as at the period ending June 30 of each year, rather than at the period ending Dec. 31 of each year, to optimally align mineral reserves updates, mine plans and budgets. This change will take effect on June 30, 2019, and the updated mineral reserve and resource estimates are expected to include the Tahoe assets that will be added to the company's portfolio following completion of the arrangement.

A summary of the silver and gold mineral reserve and resource information at Dec. 31, 2018, is provided in the attached reserves and resources tables.

                                 MINERAL RESERVES AS OF DEC. 31, 2018 (1, 2) 
                                         
Property             Location      Classification       Tonnes         Ag      Contained Ag        Au      Contained Au
                                                           (mt)      (g/t)             (Moz)     (g/t)             (koz)

Huaron               Peru          Proven                  6.3        156              31.4       n/a               n/a
                                   Probable                4.1        163              21.7       n/a               n/a
Morococha
(92.3%) (3)          Peru          Proven                  3.7        160              19.0       n/a               n/a
                                   Probable                3.1        150              15.1       n/a               n/a
La Colorada          Mexico        Proven                  4.3        387              53.5      0.31              42.9
                                   Probable                4.3        346              47.5      0.27              36.6
Dolores              Mexico        Proven                 35.8         27              31.3      0.86             990.8
                                   Probable                8.7         27               7.7      0.79             220.4
La Bolsa             Mexico        Proven                  9.5         10               3.1      0.67             202.9
                                   Probable                6.2          7               1.4      0.57             113.1
Manantial Espejo     Argentina     Proven                  1.2        156               5.9      1.26              47.3
                                   Probable                0.1        204               0.9      3.64              16.0
San Vicente
(95%) (3)            Bolivia       Proven                  1.5        396              19.3       n/a               n/a
                                   Probable                0.7        383               8.9       n/a               n/a
Joaquin              Argentina     Probable                0.5        721              11.0      0.41               6.2
COSE                 Argentina     Probable                0.1        918               2.2      17.7              43.3
Totals (4)                         Proven plus probable   90.0         97             279.8      0.76           1,719.5

(1) Prices used to estimate mineral reserves for 2018 were: $18.50 per ounce of silver, $1,300 per ounce of 
gold, $2,400 per tonne of zinc, $2,100 per tonne of lead and $6,000 per tonne of copper, except at Manantial
Espejo, where $16.50 per ounce of silver and $1,250 per ounce of gold were used. Metal prices used for La 
Bolsa were $14 per ounce of silver and $825 per ounce of gold.
(2) Mineral reserve estimates were prepared under the supervision of, or were reviewed by, Christopher
Emerson, FAusIMM, vice-president, business development and geology, and Martin G. Wafforn, PEng, senior
vice-president, technical services and process optimization, each of whom is a qualified person as that 
term is defined in National Instrument 43-101.
(3) This information represents the portion of mineral reserves attributable to Pan American based on its 
ownership interest in the operating entity as indicated.     
(4) Totals may not add up due to rounding.   

 
                        MEASURED AND INDICATED MINERAL RESOURCES AS OF DEC. 31, 2018 (1, 2)                   

Property            Location      Classification           Tonnes        Ag      Contained Ag       Au     Contained Au
                                                              (mt)     (g/t)             (Moz)    (g/t)            (koz)

Huaron              Peru          Measured                    2.1       155              10.4      n/a              n/a
                                  Indicated                   1.7       151               8.3      n/a              n/a
Morococha
(92.3%) (3)         Peru          Measured                    0.3       145               1.4      n/a              n/a
                                  Indicated                   0.5       151               2.4      n/a              n/a
La Colorada         Mexico        Measured                    0.6       193               3.7     0.22              4.2
                                  Indicated                   2.0       156               9.9     0.15              9.4
Dolores             Mexico        Measured                    4.5        20               2.8     0.25             36.4
                                  Indicated                   1.6        27               1.4     0.53             27.4
La Bolsa            Mexico        Measured                    1.4        11               0.5     0.90             39.9
                                  Indicated                   4.5         9               1.3     0.50             71.2
Manantial Espejo    Argentina     Measured                    0.1       169               0.8     1.66              7.8
                                  Indicated                   0.2       241               1.4     2.86             16.5
San Vicente
(95%) (3)           Bolivia       Measured                    0.8       154               4.0      n/a              n/a
                                  Indicated                   0.2       148               0.9      n/a              n/a
Navidad             Argentina     Measured                   15.4       137              67.8      n/a              n/a
                                  Indicated                 139.8       126             564.5      n/a              n/a
Pico Machay         Peru          Measured                    4.7       n/a               n/a     0.91            137.5
                                  Indicated                   5.9       n/a               n/a     0.67            127.1
Joaquin             Argentina     Indicated                   0.1       385               0.7     0.58              1.1
Totals (4)                        Measured and indicated    186.3       121             682.1     0.58            478.5

(1) Prices used to estimate mineral resources for 2018 were: $18.50 per ounce of silver, $1,300 per ounce of
gold, $2,400 per tonne of zinc, $2,100 per tonne of lead and $6,000 per tonne of copper, except at the
following properties: Dolores and Manantial Espejo used $24 per ounce of silver and $1,400 per ounce of 
gold; Joaquin used $25 per ounce of silver and $1,400 per ounce of gold; La Bolsa used $14 per ounce of 
silver and $825 per ounce of gold; and Navidad used $12.52 per ounce of silver and $1,100 per tonne of
lead.
(2) Mineral resource estimates were prepared under the supervision of, or were reviewed by, Christopher 
Emerson, FAusIMM, vice-president, business development and geology, and Martin G. Wafforn, PEng, senior 
vice-president, technical services and process optimization, each of whom is a qualified person as that 
term is defined in National Instrument 43-101.      
(3) This information represents the portion of mineral resources attributable to Pan American based on 
its ownership interest in the operating entity as indicated. 
(4) Totals may not add up due to rounding.       

 
                              INFERRED MINERAL RESOURCES AS OF DEC. 31, 2018 (1, 2) 

Property            Location      Classification       Tonnes        Ag      Contained Ag       Au      Contained Au
                                                          (mt)     (g/t)             (Moz)    (g/t)             (koz)

Huaron              Peru          Inferred                6.2       157              31.0      n/a               n/a
Morococha
(92.3%) (3)         Peru          Inferred                4.7       140              21.4      n/a               n/a
La Colorada         Mexico        Inferred                6.2       185              37.1     0.20              40.8
Dolores             Mexico        Inferred                4.3        45               6.2     1.15             158.5
La Bolsa            Mexico        Inferred               13.7         8               3.3     0.51             224.6
Manantial Espejo    Argentina     Inferred                0.5       194               3.0     2.71              41.4
San Vicente
(95%) (3)           Bolivia       Inferred                2.5       322              26.3      n/a               n/a
Navidad             Argentina     Inferred               45.9        81             119.4      n/a               n/a
Pico Machay         Peru          Inferred               23.9       n/a               n/a     0.58             445.7
Joaquin             Argentina     Inferred               0.01       389               0.1     1.29               0.2
COSE                Argentina     Inferred               0.03       382               0.3     7.10               6.3
Totals (4)                        Inferred              108.0        92             248.0     0.59             917.5

(1) Prices used to estimate mineral resources for 2018 were: $18.50 per ounce of silver, $1,300 per 
ounce of gold, $2,400 per tonne of zinc, $2,100 per tonne of lead and $6,000 per tonne of copper,
except at the following properties: Dolores and Manantial Espejo used $24 per ounce of silver and 
$1,400 per ounce of gold; Joaquin used $25 per ounce of silver and $1,400 per ounce of gold; La 
Bolsa used $14 per ounce of silver and $825 per ounce of gold; and Navidad used $12.52 per ounce of 
silver and $1,100 per tonne of lead.
(2) Mineral resource estimates were prepared under the supervision of, or were reviewed by, Christopher 
Emerson, FAusIMM, vice-president, business development and geology, and Martin G. Wafforn, PEng, senior
vice-president, technical services and process optimization, each of whom is a qualified person as that 
term is defined in National Instrument 43-101.     
(3) This information represents the portion of mineral resources attributable to Pan American based on 
its ownership interest in the operating entity as indicated.                                         
(4) Totals may not add up due to rounding.                                                           

General notes with respect to technical information

Mineral reserves and resources are as defined by the Canadian Institute of Mining, Metallurgy and Petroleum.

Pan American reports mineral resources and mineral reserves separately. Reported mineral resources do not include amounts identified as mineral reserves. Mineral resources that are not mineral reserves have no demonstrated economic viability.

Pan American does not expect these mineral reserve and resource estimates to be materially affected by metallurgical, environmental, permitting, legal, taxation, socio-economic, political and marketing, or other relevant issues.

See the company's annual information form dated March 22, 2018, available at SEDAR for further information on the company's material mineral properties, other than the Joaquin property, including information concerning associated quality assurance/quality control and data verification matters, the key assumptions and methods used by the company to estimate mineral reserves and mineral resources, and for a detailed description of known legal, political, environmental and other risks that could materially affect the company's business and the potential development of the company's mineral reserves and resources. For information on the Joaquin property, please refer to the company's news release dated Dec. 21, 2017.

Grades are shown as contained metal before mill recoveries are applied. Samples from the first 16 drill holes in the new manto/skarn discovery (holes U-01-18 to U-57-18) were analyzed at the La Colorada mine laboratory, which is operated by the company's employees, using fire assay with gravimetric finish for gold and silver, and by acid digestion with atomic absorption finish for lead, zinc and copper. The majority of the samples from the subsequent drill holes (hole U-60-18 onward) was prepared and analyzed by Activation Laboratories Ltd. of Zacatecas, Mexico, using fire assay with gravimetric finish for gold and silver, and by acid digestion with atomic absorption finish for lead, zinc and copper. Pan American Silver implements a quality assurance and quality control (QAQC) program, including the submission of certified standards, blanks and duplicate samples to the laboratory. As a result of some blank and standard failures associated with analyses conducted at the La Colorada mine laboratory, as reported in Pan American's news release dated Oct. 23, 2018, the failed batches were resubmitted to the laboratory for reanalysis, and the primary laboratory was switched to Actlabs. The results of the QAQC samples submitted to Actlabs demonstrate acceptable accuracy and precision, and no significant contamination is occurring at the laboratory. The qualified person is of the opinion that the sample preparation, analytical and security procedures followed for the samples will be sufficient and reliable for the purpose of any future mineral resource and mineral reserve estimates.

Complete mineral reserve and resource information for all metals, including tonnage and grades, is available at the Pan American Silver website.

Technical information contained in this news release with respect to Pan American has been reviewed and approved by Christopher Emerson, FAusIMM, vice-president, business development and geology, and Martin Wafforn, PEng, senior vice-president, technical services and process optimization, who are each qualified persons for the purposes of National Instrument 43-101.

A summary of the La Colorada drill results is provided in the attached La Colorada drill results table (1) (2).

                                    LA COLORADA DRILL RESULTS 

Drill hole ID       From (m)     To  (m)     Interval (m)    Ag g/t      Cu %      Pb %      Zn %

U-42-18                89.4        94.9              5.6        145      0.44      5.27     10.39
and                   210.2       214.2              4.0         34      0.10      2.05      3.29
U-53-18               209.3       211.7              2.4        114      0.25      2.22      6.61
and                   307.5       312.3              4.8         45      0.12      2.29     10.97
U-57-18               125.5       126.6              1.2      4,665      0.76      4.30      7.33
and                   423.7       428.6              4.9         90      0.07      5.88      6.86
and                   462.3       469.8              7.6         47      2.37      0.87      3.16
U-60-18                82.5        85.2              2.7         84      0.31      4.66     16.70
and                    86.3        88.4              2.1         31      0.16      2.05      7.48
and                   231.0       275.5             44.5         40      0.10      1.97      4.71
incl.                 231.0       238.4              7.4         89      0.28      2.77      9.55
and                   362.5       378.1             15.6        222      0.56      4.11      5.82
incl.                 371.0       375.0              4.0        581      0.91      7.18      7.45
and                   473.6       485.0             11.5        246      0.05      3.67      3.07
incl.                 482.5       485.0              2.5        716      0.06     13.92      9.98
and                   612.8       661.5             48.8         29      0.17      1.39      4.33
incl.                 657.4       660.9              3.5         70      0.36      4.00     15.07
and                   768.6       836.4             67.9         18      0.07      0.57      4.67
incl.                 793.7       798.5              4.8         70      0.13      4.09     18.60
U-68-18               328.9       637.0            308.1         46      0.20      1.93      4.56
incl.                 328.9       394.6             65.7         80      0.40      2.34      5.73
incl.                 338.1       346.4              8.3        126      0.59      4.51     12.42
incl.                 351.7       363.9             12.3        133      0.98      3.37      9.62
incl.                 376.1       393.2             17.1        116      0.28      2.95      5.52
incl.                 446.1       521.1             75.0         70      0.23      3.01      6.02
incl.                 546.7       637.0             90.4         38      0.19      2.25      6.15
incl.                 600.7       624.7             24.0         55      0.33      3.43     11.16
U-71-18               625.7       630.6              4.9        157      1.85      0.46      0.10
U-85-18               267.3       272.8              5.5        117      0.22      5.38     12.73
U-87-18               857.1       922.0             64.7         33      0.16      1.99      2.93
incl.                 857.1       868.6             11.5         71      0.31      4.47      4.57  

(1) The exploration drilling, sampling and analytical data have been reviewed, verified
and compiled by Pan American's geology staff under the supervision of, or were reviewed 
by, Christopher Emerson, FAusIMM, vice-president, business development and geology, who 
is a qualified person as that term is defined in National Instrument 43-101.
(2) True widths of the mineralized intervals are unknown at this time.   

About Pan American Silver Corp.

Pan American Silver is the world's second-largest primary silver producer, providing enhanced exposure to silver through a diversified portfolio of assets, large reserves and increasing production. It owns and operates six mines in Mexico, Peru, Argentina and Bolivia. Pan American Silver maintains a strong balance sheet, has an established management team with proven operating expertise and is committed to responsible development. Founded in 1994, the company is headquartered in Vancouver, B.C., and its shares trade on the Nasdaq and the Toronto Stock Exchange under the symbol PAAS.

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