PAN AMERICAN SILVER COMMENTS ON CHANGES
TO MINING LEGISLATION IN RIO NEGRO, ARGENTINA
Vancouver, B.C. � January 19, 2011 � Pan American Silver
Corp. (NASDAQ: PAAS; TSX: PAA) (�Pan American� or the �Company�) owns 100% of
the Calcatreu gold development
project (�Calcatreu�
or the �Project�), located in the Province of
Rio Negro, in Argentina. Since acquiring the Project in early
2010 as part of the purchase of Aquiline Resources, the Company has performed only a modest amount of new work due to
the fact that Rio
Negro had banned
the use of sodium cyanide, which is critical to the recovery
of gold from Calcatreu�s
mineral resource.
On December 29, 2011, Rio Negro�s
provincial legislature passed
law Nr. 4738, which
among other things, allows for the use
of chemical substances, including
sodium cyanide, in mineral
processing. The new law
replaced law 3981 that limited mining activity.
The new legislation was
signed, published
and enacted into law on January 9, 2012
and it also established the evaluation
process for the filing
and approval of an Environmental
Impact Assessment (�EIA�), which is necessary to mine and process
minerals in the province.
Pan American�s President
& CEO, Geoff Burns, commented, �This is a very positive development for Rio Negro and for Argentina. While the previous legislation allowed open pit mining, it banned the use of cyanide in mineral processing, effectively rendering our Calcatreu gold project uneconomic. By reversing
this ban, the provincial and municipal governments have clearly reaffirmed their commitment to responsible,
environmentally sensitive mining
development, which will bring significant investment
and the associated benefits
for all stakeholders, particularly
the local communities�.
In 2011, Pan American Silver
invested $1.7 million at
Calcatreu, completing
2,932 meters of diamond
drilling, mostly as
confirmation holes and to collect
fresh metallurgical
sample materials.
Results on testing performed on these materials are still pending and the Company
has not yet had an opportunity to confirm
and update the resource estimates,
which were prepared in April 2008 by Micon
for Aquiline Resources
Inc. According to those
estimates, the Project hosts an indicated resource of 8
million tonnes grading 2.63 gpt gold and 25.7 gpt silver, with additional inferred resources of 3.4 million tonnes grading
2.06 gpt gold and 16.6 gpt
silver, representing
a potentially significant
undeveloped gold resource
within the Company�s
portfolio.
In 2012, the Company
intends to accelerate
development activities
at the Project, which
will include further diamond drilling, metallurgical testing, environmental baseline studies and preliminary engineering, as it
works towards producing a Preliminary Assessment and an EIA for Calcatreu.
Calcatreu is less than 140 kilometres due north of Pan American�s most important silver development project, Navidad, which is also located in the central Meseta region
of Patagonia, just across the border, in the neighboring
province of Chubut. There has clearly
been a positive shift in attitude towards mining and mining investment in Argentina since
the recent re-election
of President Cristina Fernandez de Kirchner,
and it is gratifying to see Rio
Negro take a leading
role in responding
to this change.
About Pan American
Pan American Silver�s mission is to be the world�s largest and low cost primary silver mining company by increasing its low-cost silver
production and silver reserves.
The Company has seven
operating mines in Mexico, Peru, Argentina and
Bolivia. Pan American also owns the Navidad project in Chubut, Argentina and is the operator of the La
Preciosa project in
Durango, Mexico.
Technical information contained in this news
release has been reviewed by Michael
Steinmann, P.Geo., Executive
Vice President Geology
& Exploration, and Martin Wafforn, P.Eng., Vice President Technical Services, who
are the Company�s Qualified
Persons for the purposes
of NI 43-101.
Information Contact
Kettina Cordero
Coordinator, Investor
Relations
(604) 684-1175
info@panamericansilver.com
www.panamericansilver.com
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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 RELATING TO THE COMPANY AND ITS OPERATIONS. ALL
STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT, ARE
FORWARD-LOOKING STATEMENTS. WHEN USED IN THIS NEWS RELEASE, THE WORDS,
"BELIEVES", "EXPECTS", "INTENDS",
"PLANS", "FORECAST", "OBJECTIVE",
"OUTLOOK", "POSITIONING", "POTENTIAL",
"ANTICIPATED", "BUDGET", AND OTHER SIMILAR WORDS
AND EXPRESSIONS, IDENTIFY FORWARD-LOOKING STATEMENTS OR INFORMATION.
THESE FORWARD-LOOKING STATEMENTS OR INFORMATION RELATE TO, AMONG OTHER
THINGS: THE EFFECTS OF LAWS, REGULATIONS AND GOVERNMENT POLICIES
AFFECTING PAN AMERICAN'S OPERATIONS OR POTENTIAL FUTURE OPERATIONS,
INCLUDINGTHOSE IN THE ARGENTINA, THE ABILITY OF THE COMPANY TO CONDUCT
SUFFICIENT EXPLORATION ORTO DEVELOP THE CALCATREU PROJECT; THE
TIMING AND THE ABILITY OF THE COMPANY TO COMPLETE AN EIA OR PRELIMINARY
ASSESSMENT; THE TIMING FOR ANY CONFIRMATION OR UPDATE OF PAST
RESOURCE ESTIMATES; AND THE COMPANY'S PLANS AND EXPECTATIONS FOR ITS
PROPERTIES AND OPERATIONS.
THESE
STATEMENTS REFLECT THE COMPANY'S CURRENT VIEWS WITH RESPECT TO FUTURE
EVENTS AND ARE NECESSARILY BASED UPON A NUMBER OF ASSUMPTIONS AND
ESTIMATES THAT, WHILE CONSIDERED REASONABLE BY THE COMPANY, ARE
INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, COMPETITIVE,
POLITICAL AND SOCIAL UNCERTAINTIES AND CONTINGENCIES. MANY FACTORS,
BOTH KNOWN AND UNKNOWN, COULD CAUSE ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM THE RESULTS, PERFORMANCE
OR ACHIEVEMENTS THAT ARE OR MAY BE EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS 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 SPOT AND FORWARD MARKETS FOR SILVER, GOLD, BASE METALS
AND CERTAIN OTHER COMMODITIES (SUCH AS NATURAL GAS, FUEL OIL AND
ELECTRICITY); FLUCTUATIONS IN CURRENCY MARKETS (SUCH AS THE PERUVIAN
SOL, MEXICAN PESO, ARGENTINE PESO AND BOLIVIAN BOLIVIANO VERSUS THE
U.S. DOLLAR); RISKS RELATED TO THE TECHNOLOGICAL AND OPERATIONAL NATURE
OF THE COMPANY'S BUSINESS; CHANGES IN NATIONAL AND LOCAL GOVERNMENT,
LEGISLATION, TAXATION, CONTROLS OR REGULATIONS INCLUDING, AMONG;
POLITICAL OR ECONOMIC DEVELOPMENTS IN CANADA, THE UNITED STATES,
MEXICO, PERU, ARGENTINA, BOLIVIA OR OTHER COUNTRIES WHERE THE COMPANY
MAY CARRY ON BUSINESS IN THE FUTURE; RISKS AND HAZARDS ASSOCIATED WITH
THE BUSINESS OF MINERAL EXPLORATION, DEVELOPMENT AND MINING (INCLUDING
ENVIRONMENTAL HAZARDS, INDUSTRIAL ACCIDENTS, UNUSUAL OR UNEXPECTED
GEOLOGICAL OR STRUCTURAL FORMATIONS, PRESSURES, CAVEINS AND FLOODING);
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; AVAILABILITY AND
INCREASING COSTS ASSOCIATED WITH MINING INPUTS AND LABOUR; THE
SPECULATIVE NATURE OF MINERAL EXPLORATION AND DEVELOPMENT, INCLUDING
THE RISKS OF OBTAINING NECESSARY LICENSES AND PERMITS AND THE PRESENCE
OF LAWS AND REGULATIONS THAT MAY IMPOSE RESTRICTIONS ON MINING;
CHALLENGES TO, OR DIFFICULTY IN MAINTAINING, THE COMPANY'S TITLE TO
PROPERTIES AND CONTINUED OWNERSHIP THEREOF; THE ACTUAL RESULTS OF
CURRENT EXPLORATION ACTIVITIES, 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. INVESTORS ARE CAUTIONED AGAINST
ATTRIBUTING UNDUE CERTAINTY OR RELIANCE ON FORWARD-LOOKING STATEMENTS.
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. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME
ANY OBLIGATION, TO UPDATE THESE FORWARD-LOOKING STATEMENTS OR
INFORMATION TO REFLECT CHANGES IN ASSUMPTIONS OR CHANGES IN
CIRCUMSTANCES OR ANY OTHER EVENTS AFFECTING SUCH STATEMENTS OR
INFORMATION, OTHER THAN AS REQUIRED BY APPLICABLE LAW.
NOTE FOR
US INVESTORS
THIS
NEWS RELEASE HAS BEEN PREPARED IN ACCORDANCE WITH THE REQUIREMENTS OF
CANADIAN PROVINCIAL SECURITIES LAWS, WHICH DIFFER FROM THE REQUIREMENTS
OF U.S. SECURITIES LAWS. UNLESS OTHERWISE INDICATED, ALL
ESTIMATES INCLUDED IN THIS NEWS RELEASE HAVE BEEN BASED UPON MINERAL
RESOURCE ESTIMATES PREPARED IN ACCORDANCE WITH CANADIAN NATIONAL
INSTRUMENT 43-101 � STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS (��NI
43-101��) AND THE CANADIAN INSTITUTE OF MINING, METALLURGY AND
PETROLEUM CLASSIFICATION SYSTEM. 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
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, AND
MINERAL 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,
ESTIMATES INCLUDED IN THIS NEWS RELEASE HAVE BEEN BASED UPON
��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. 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.
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