VANCOUVER, Feb. 18, 2016 /CNW/ – Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA) ("Pan American", or the "Company") today reported unaudited results for the three and twelve months ended December 31, 2015.
Strategic Achievements
Fourth Quarter ("Q4") 2015
- Produced 6.78 million ounces of silver and 48,200 ounces of gold
- Reduced consolidated cash costs(1) 24% from Q4 2014 to $9.09 per payable ounce of silver, net of by-product credits
- Reduced consolidated All-In Sustaining Costs per Silver Ounce Sold(2) ("AISCSOS") 21% from Q4 2014 to$14.76, net of by-product credits
- Increased net cash flow generated from operating activities to $23.4 million, or $0.15 per share
Full-Year 2015 ("2015")
- Achieved record silver production of 26.12 million ounces
- Achieved record gold production of 183,700 ounces
- Reduced consolidated cash costs(1) by 15% from 2014 to $9.70 per payable ounce of silver, net of by-product credits
- Reduced consolidated AISCSOS(2) by 17% from 2014 to $14.92
- Generated strong net cash flow from operating activities of $88.7 million, sufficient to fully fund sustaining capital of $73.7 million
- Advanced the La Colorada expansion:
- New shaft 50% complete
- New sulphide processing plant 70% complete
- Commenced the Dolores expansion:
- Advanced underground ramp 866 metres
- New power line approximately 74% complete
(1) | Cash cost per ounce of silver, net of by-product credits ("cash costs") is a not a generally accepted accounting principle (a "non-GAAP") measure. Cash costs does not have a standardized meaning prescribed by IFRS as an indicator of performance. The Company's method of calculating cash costs may differ from the methods used by other entities and, accordingly, the Company's cash costs may not be comparable to similarly titled measures used by other entities. Investors are cautioned cash costs per payable ounce of silver should not be construed as an alternative to production costs, depreciation and amortization, and royalties determined in accordance with IFRS as an indicator of performance. Readers should refer to the "Alternative Performance (non-GAAP) Measures" section at the end of this news release for a more detailed discussion of this measure and its calculation. |
(2) | All-In Sustaining Costs per Silver Ounce Sold ("AISCSOS") is a non-GAAP measure. The Company has adopted AISCSOS as a measure of its consolidated operating performance and its ability to generate cash from all operations collectively, and the Company believes it is a more comprehensive measure of the cost of operating our consolidated business than traditional cash costs per payable ounce as it includes the cost of replacing ounces through exploration, the cost of ongoing capital investments (sustaining capital), general and administrative expenses, as well as other items that affect the Company's consolidated earnings and cash flow. AISCSOS does not have a standardized meaning prescribed by GAAP, and readers should refer to the "Alternative Performance (non-GAAP) Measures" section at the end of this news release for a more detailed discussion of this measure and its calculation. |
Michael Steinmann, President and Chief Executive Officer of the Company commented on the fourth quarter 2015 and full-year 2015 performance results, "2015 was one of the strongest production years in Pan American's history with record silver and gold production, a 15% decrease of our cash costs and a 17% decrease in AISCSOS from 2014. In spite of deteriorating metal prices, our record setting production helped us to continue to generate strong operating cash flows of$88.7 million, or $0.58 per share, which was more than sufficient to cover our annual sustaining capital of $73.7 million. Our efforts did not fully counteract the effects of lower metal prices on our earnings, as net realizable value adjustments, low prices, foreign exchange losses, and impairments pushed us into a net loss position for the year."
Mr. Steinmann continued, "However, our balance sheet remains healthy and we have more than adequate cash to fully fund both of our expansion projects at La Colorada and Dolores, which are advancing as planned. I look forward to 2016 and beyond, when we should see substantial reductions to our cash costs and AISCSOS once the two expansions are complete."
Consolidated Financial Results
Three months ended December 31, | Twelve months ended December 31, | |||||||
(Unaudited in thousands of U.S. Dollars, except as noted) | 2015 | 2014 | 2015 | 2014 | ||||
Revenue | $ | 162,960 | $ | 163,096 | $ | 674,688 | $ | 751,942 |
Mine operating (loss) earnings | $ | (7,771) | $ | (21,369) | $ | (32,089) | $ | 8,073 |
Net loss for the period | $ | (136,958) | $ | (525,727) | $ | (231,556) | $ | (544,823) |
Adjusted loss for the period(1) | $ | (17,517) | $ | (21,207) | $ | (57,968) | $ | (20,825) |
Net cash generated from operating activities | $ | 23,401 | $ | 823 | $ | 88,692 | $ | 124,188 |
Costs Per Payable Silver Ounce | ||||||||
All-in sustaining cost per silver ounce sold(2)(AISCSOS) | $ | 14.76 | $ | 18.62 | $ | 14.92 | $ | 17.88 |
Per Share Results | ||||||||
Net loss per share attributable to common shareholders (basic) | $ | (0.88) | $ | (3.48) | $ | (1.49) | $ | (3.60) |
Adjusted loss per share attributable | $ | (0.12) | $ | (0.14) | $ | (0.38) | $ | (0.14) |
Net cash generated from operating activities per share | $ | 0.15 | $ | 0.01 | $ | 0.58 | $ | 0.82 |
(1) | Adjusted (loss) earnings, and adjusted (loss) earnings per share attributable to common shareholders, are a non-GAAP measure that the Company considers to better reflect normalized earnings as it eliminates items that may be volatile from period to period relating to positions which will settle in future periods, and items that are non-recurring. Readers should refer to the "Alternative Performance (non-GAAP) Measures" section at the end of this news release for a more detailed discussion of this measure and its calculation. |
(2) | AISCSOS is a non-GAAP measure. AISCSOS does not have a standardized meaning prescribed by GAAP, and readers should refer to the "Alternative Performance (non-GAAP) Measures" section at the end of this news release for a more detailed discussion of this measure and its calculation. |
Fourth Quarter Consolidated Financial Results – Q4 2015 vs. Q4 2014
Pan American's revenue during Q4 2015 declined slightly from Q4 2014, a result of metal price declines and negative price and quantity settlements, almost completely offset by increased quantities of metals sold, most notably gold and copper.
During Q4 2015, the Company's average realized prices for silver and gold declined 7% and 8%, respectively from Q4 2014 to $14.66 per ounce of silver and $1,109 per ounce of gold. The Company received $1,672 per tonne of zinc, $1,684 per tonne of lead, and $4,871 per tonne of copper, a decline from the fourth quarter of 2014 of 25%, 14%, and 26%, respectively.
The Company's net loss during Q4 2015 declined by $388.8 million from Q4 2014 primarily due to a decline of $412.8 million in net of tax impairment charges and a $13.6 million reduction in mine operating losses. During Q4 2015, the Company recorded $121.5 million in pre-tax impairment charges on the value of mineral properties, and plant and equipment at Morococha, Dolores and Alamo Dorado. The impairment charges were incurred mainly due to the prolonged decline in the Company's long-term reserve metal prices in the quarter. After adjusting for impairment charges and other items, the Company's adjusted loss for Q4 2015 declined 17% relative to Q4 2014, primarily the result of a decline in production costs.
Net cash generated from operating activities during Q4 2015 rose sharply compared to Q4 2014 due largely to the decline in mine operating losses, lower income tax, and interest payments.
AISCSOS during Q4 2015 declined 21%, or $3.86 from Q4 2014 to $14.76, primarily as a result of lower direct operating costs, higher by-product credits, particularly from more gold by-product production at Dolores and Alamo Dorado; and higher silver sales, partially offset by higher general and administrative expenses; and higher treatment and refining charges.
During Q4 2015, the Company paid $7.6 million in cash dividends to its shareholders and drew $36.2 million from its secured revolving line of credit exclusively in connection with the payment of the Minefinders convertible debentures, which all matured in December 2015.
Annual Consolidated Financial Results – 2015 vs. 2014
Pan American's revenue in 2015 declined by $77.3 million from 2014 revenues, due to significantly lower metals prices, partially offset by larger quantities of gold and copper sold. During 2015, the Company sold 20% more ounces of gold and 73% more tonnes of copper than in 2014 due to record annual gold and copper production.
In 2015, the Company's average realized prices for silver and gold declined 16% and 8% from 2014, respectively. Pan American received an average of $15.53 per ounce of silver and $1,162 per ounce of gold in 2015. The Company received$1,889 per tonne of zinc, 13% less than in 2014, $1,745 per tonne of lead, 16% less than in 2014, and $5,314 per tonne of copper, 22% less than in 2014.
Pan American's mine operating losses were $32.1 million during 2015, $40.2 million lower than the $8.1 million mine operating earnings generated in 2014. The decline in mine operating earnings was due almost entirely to the lower revenue, which was partially offset by a $40.2 million decrease in net production costs and royalties.
Pan American's net loss for 2015 declined by $313.3 million when compared to net losses for 2014, mostly on account of$392.7 million lower net of tax impairment charges, primarily offset by the previously mentioned decline in revenues. In 2015, the Company recognized pre-tax impairment charges totaling $150.3 million relating to write-downs of the Manantial Espejo, Morococha, Dolores, and Alamo Dorado mines.
The adjusted loss of $58.0 million for 2015 was $37.1 million higher than the adjusted loss in 2014. The year-over-year increased adjusted loss was largely attributable to the previously discussed decline in revenues, offset by reduced production costs and royalties and lower income taxes.
Net cash generated from operating activities during 2015 declined 29% compared to 2014, mainly as a result of lower revenues, offset by decreased production costs and royalties, as well as lower income tax payments. Operating cash flow generated during the year was sufficient to fund all of the Company's sustaining capital needs, taxes payable, interest payments and half of the $41.7 million distributed to shareholders during 2015 in the form of cash dividends.
Consolidated AISCSOS for 2015 declined 17% to $14.92 compared to 2014 due to lower sustaining capital expenditures, lower net realizable value adjustments to inventories, primarily related to Dolores heap leach inventories; lower direct operating costs, and higher by-product credits, mainly from record gold production.
At December 31, 2015, Pan American had $226.6 million in cash and short-term investments and maintained a very strong working capital position of $392.2 million.
Consolidated Operational Results – Q4 2015 vs. Q4 2014
Q4 2015 | Q4 2014 | |||||
Ag | Au | Cash Costs(1) $ | Ag | Au | Cash | |
La Colorada | 1.42 | 0.65 | 7.28 | 1.29 | 0.72 | 7.57 |
Dolores | 0.95 | 18.21 | 11.64 | 0.95 | 17.99 | 12.99 |
Alamo Dorado | 0.82 | 7.89 | 5.49 | 0.86 | 5.67 | 14.07 |
Huaron | 0.99 | 0.24 | 11.35 | 0.95 | 0.30 | 12.22 |
Morococha | 0.52 | 0.78 | 12.99 | 0.60 | 0.91 | 12.53 |
San Vicente | 1.08 | n/a | 11.12 | 1.17 | n/a | 11.88 |
Manantial Espejo | 1.01 | 20.46 | 6.48 | 0.91 | 18.27 | 13.93 |
TOTAL (2) | 6.78 | 48.22 | 9.09 | 6.73 | 43.86 | 11.92 |
(1) | Cash costs per payable ounce of silver, net of by-product credits. Average by-product metal prices for Q4 2015 were: Au $1,106/oz, Zn $1,613/tonne, Pb $1,681/tonne, and Cu $4,892/tonne. Cash costs is a non-GAAP measure and cash costs does not have a standardized meaning prescribed by IFRS as an indicator of performance. Readers should refer to the "Alternative Performance (non-GAAP) Measures" section at the end of this news release for a more detailed discussion of this measure and its calculation. |
(2) | Totals may not add up due to rounding. |
Silver production in Q4 2015 was similar to Q4 2014, with production increases at La Colorada, Huaron, and Manantial Espejo partially offset by production declines at the Company's other operations.
Despite substantially lower prices for all by-products, consolidated cash costs during Q4 2015 declined 24% due to higher production of all by-product metals and lower direct unit operating costs at all mines, particularly at Huaron, Morococha, Manantial Espejo and Alamo Dorado.
Gold production during Q4 2015 rose 10% from the comparable quarter of 2014, driven by increased production atDolores, Alamo Dorado and Manantial Espejo.
During Q4 2015, Pan American also produced 11,500 tonnes of zinc, 4,100 tonnes of lead and 4,000 tonnes of copper, 12%, 5% and 34% more than in Q4 2014. Copper production rose significantly due to mine sequencing at the Company's Peruvian mines, where production continues to focus on copper-rich areas.
Consolidated Operational Results – 2015 vs. 2014
FY 2015 | FY 2014 | |||||
Ag | Au | Cash Costs(1) $ | Ag | Au | Cash | |
La Colorada | 5.33 | 2.63 | 7.41 | 4.98 | 2.57 | 8.14 |
Dolores | 4.25 | 79.14 | 9.28 | 3.98 | 66.82 | 12.94 |
Alamo Dorado | 2.97 | 20.34 | 11.41 | 3.47 | 17.56 | 12.89 |
Huaron | 3.71 | 1.05 | 10.91 | 3.63 | 1.16 | 11.56 |
Morococha | 2.17 | 3.22 | 13.03 | 2.37 | 2.92 | 13.22 |
San Vicente | 4.12 | n/a | 11.57 | 3.95 | n/a | 13.16 |
Manantial Espejo | 3.58 | 77.32 | 7.33 | 3.72 | 70.47 | 10.12 |
TOTAL (2) | 26.12 | 183.70 | 9.70 | 26.11 | 161.50 | 11.46 |
(1) | Cash costs per payable ounce of silver, net of by-product credits. Average by-product metal prices for 2015 were: Au $1,160/oz, Zn $1,928/tonne, Pb $1,784/tonne, and Cu $5,495/tonne. Cash costs is a non-GAAP measure and cash costs does not have a standardized meaning prescribed by IFRS as an indicator of performance. Readers should refer to the "Alternative Performance (non-GAAP) Measures" section at the end of this news release for a more detailed discussion of this measure and its calculation. |
(2) | Totals may not add up due to rounding. |
Consolidated record silver production for 2015 was similar to that of 2014, with production increases at La Colorada,Dolores, Huaron, and San Vicente offsetting declines at Alamo Dorado, Morococha and Manantial Espejo. Consolidated gold production rose 14% compared to 2014 to a new annual Company record with notable increases to production record levels at Dolores, Alamo Dorado and Manantial Espejo.
Despite substantially lower by-product metal prices, the Company reduced cash costs by 15% from 2014 on account of higher gold production and record-breaking consolidated copper production, as well as substantially lower unit operating costs per tonne at all of the Company's mines due to improved productivities, favorable currency exchange rates and lower costs for certain consumables, especially diesel fuel.
Pan American's consolidated base metals production during 2015 was 40,700 tonnes of zinc, 14,600 tonnes of lead and 15,000 tonnes of copper. Zinc production declined 7% and lead production declined 3% from 2014, mainly due to lower production at Morococha from a change in mine sequencing targeting higher value ores from the copper-rich Esperanzaarea that drove consolidated copper production up 67% from 2014.
Capital Expenditures – Fiscal Year 2015 vs. Fiscal Year 2014
During 2015, Pan American spent $73.7 million in sustaining capital at its operating mines, 25% less than in 2014, due to reduced pre-stripping at Manantial Espejo, fewer mining equipment replacements, and less capitalized underground infrastructure development at Huaron and Morococha given the advances accomplished in previous years.
In addition, the Company invested $76.5 million in long term project capital to advance the La Colorada and Dolores mine expansions.
Current and Future Dividends
Today, the Board of Directors approved a quarterly cash dividend in the amount of $0.0125 per common share. The cash dividend will be payable on or about Friday, March 11, 2016, to holders of record of common shares as of the close ofMonday, February 29, 2016. Pan American's dividends are designated as eligible dividends for the purposes of the Income Tax Act (Canada). As is standard practice, the amounts and specific distribution dates of any future dividends will be evaluated and determined by the Board of Directors on an ongoing basis.
2016 Operational Forecast
In 2016, Pan American expects to produce between 24.0 million and 25.0 million ounces of silver and between 175,000 and 185,000 ounces of gold.
Pan American's 2016 base metals production is expected to be between 46,000 and 48,000 tonnes of zinc, 15,000 to 15,500 tonnes of lead and 13,000 to 13,500 tonnes of copper.
Consolidated cash costs for the full year 2016 are expected to be between $9.45 and $10.45 per ounce of silver, net of by-product credits, and consolidated AISCSOS are expected to be between $13.60 and $14.90, net of by-product credits. The Company has assumed by-product prices of Au $1,100/oz, Zn $1,700/tonne, Pb $1,600/tonne and Cu $4,600/tonne in the calculation of the forecast 2016 cash costs and AISCSOS.
Also in 2016, Pan American expects to spend between $65.0 million and $75.0 million in sustaining capital at its operating mines. In addition, the Company expects to invest between $135.0 million and $140.0 million in project development at La Colorada and Dolores.
Please refer to the Company's news release issued on January 19, 2016 for details of the Company's production and cash costs forecast by mine.
Technical information contained in this news release with respect to Pan American has been reviewed and approved by Martin Wafforn, P.Eng., VP Technical Services, who is the Company's Qualified Person for the purposes of National Instrument 43-101. For additional information about the Company's material mineral properties, please refer to the Company's Annual Information Form dated March 30, 2015, filed at www.sedar.com.
Pan American will host a conference call to discuss these results on Thursday, February 18, 2016 at 1:00 pm EST (10:00 am PST). To participate in the conference, please dial toll number 1-604-638-5340.
A live audio webcast and PowerPoint presentation will be available athttps://meet.panamericansilver.com/ir/8D435YLF. The audio and PowerPoint webcast will also be available for replay by visiting the Events page of the Company's website at www.panamericansilver.com/Investors/Events. |
About Pan American Silver
Pan American Silver's mission is to be the world's pre-eminent silver producer with a reputation for excellence in discovery, engineering, innovation and sustainable development. The Company has seven operating mines in Mexico,Peru, Argentina and Bolivia. Pan American also owns several development projects in Mexico, USA, Peru and Argentina.
NON-GAAP MEASURES
THIS NEWS RELEASE REFERS TO VARIOUS NON-GAAP MEASURES, SUCH AS CASH COSTS PER PAYABLE OUNCE OF SILVER, ALL-IN SUSTAINING COST PER SILVER OUNCE SOLD AND ADJUSTED (LOSS) EARNINGS. READERS SHOULD REFER TO THE "ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES" SECTION AT THE END OF THIS NEWS RELEASE FOR A MORE DETAILED DISCUSSION OF THESE MEASURES AND THEIR CALCULATION.
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. 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: OUR ESTIMATED PRODUCTION OF SILVER, GOLD AND OTHER METALS IN 2016; OUR ESTIMATED CASH COSTS PER PAYABLE OUNCE OF SILVER IN 2016; OUR ESTIMATED CAPITAL INVESTMENTS, AISCSOS, AND SUSTAINING CAPITAL FOR 2016; THE ABILITY OF THE COMPANY TO SUCCESSFULLY COMPLETE ANY CAPITAL INVESTMENT PROGRAMS AND PROJECTS AND THE IMPACTS OF ANY SUCH PROGRAMS AND PROJECTS ON THE COMPANY; AND ANY ANTICIPATED LEVEL OF FINANCIAL AND OPERATIONAL SUCCESS IN 2016.
THESE STATEMENTS 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: TONNAGE OF ORE TO BE MINED AND PROCESSED; ORE GRADES AND RECOVERIES; PRICES FOR SILVER, GOLD AND BASE METALS REMAINING AS ESTIMATED; CURRENCY EXCHANGE RATES REMAINING AS ESTIMATED; 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 AT ANY OF OUR OPERATIONS: NO UNPLANNED DELAYS IN OR INTERRUPTIONS IN SCHEDULED PRODUCTION; ALL NECESSARY PERMITS, LICENCES AND REGULATORY APPROVALS FOR OUR OPERATIONS 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, GOLD AND BASE METALS PRICES; FLUCTUATIONS IN PRICES FOR ENERGY INPUTS, LABOUR, MATERIALS, SUPPLIES AND SERVICES (INCLUDING TRANSPORTATION); FLUCTUATIONS IN CURRENCY MARKETS (SUCH AS THE CANADIAN DOLLAR, PERUVIAN SOL, MEXICAN PESO AND BOLIVIAN BOLIVIANO 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); RISKS RELATING TO THE CREDIT WORTHINESS OR FINANCIAL CONDITION OF SUPPLIERS, REFINERS AND OTHER PARTIES WITH WHOM THE COMPANY DOES BUSINESS; 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 THE JURISDICTIONS WHERE WE OPERATE, INCLUDING ENVIRONMENTAL, EXPORT AND IMPORT LAWS AND REGULATIONS; DIMINISHING QUANTITIES OR GRADES OF MINERAL RESERVES AS PROPERTIES ARE MINED; 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 SECURITIES REGULATORY AUTHORITIES. 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 AND 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 AND INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION, CHANGES IN ASSUMPTIONS, FUTURE EVENTS OR OTHERWISE, EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE LAW.
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