Pan American confident Navidad mine to go ahead

* CEO sees Chubut province law change to allow open pit

* Navidad project has 632 mln silver ounces in reserve

* To produce 19.8 mln oz/yr, cost of $6.03/ounce

* Full feasibility due in Q2 2011
(In U.S. dollars unless noted)

TORONTO, Dec 2 (BestGrowthStock) – The chief executive of Pan
American Silver (PAA.TO: ) said on Thursday that he is confident
that the law in an Argentine province will be revised to allow
a massive open pit silver project to go ahead.

Speaking at a mining conference in Toronto, Geoff Burns
said the Navidad silver mine in the Argentine province of
Chubut, which he described as “transformational” for the
Canadian silver miner, is going to happen.

Chubut banned open pit mining in 2003. Burns said the law
has provisions to allow the government to define regions where
an open pit can be used.

“I believe we’re going to see a change in the law in Chubut
in the near future,” he said.

He added that the law had not been revised so far because
the previous owners of the 632 million ounce Navidad project
were junior exploration companies that the government knew
would not be able to bring the mine to production.

“They know we can build this,” Burns said. “They know that
we have the capacity and expertise.”

He added that the project will employ 1,500 people during
construction and around 500 during the mine’s 17 year life.

Chubut, located in the Patagonia region of Argentina, is a
sparsely populated area of country.

Burns said the Navidad project, which will include eight
open pits, has support from the current governor and the
front-runner in the upcoming elections.

On Wednesday, Pan American released the results of a
preliminary assessment for Navidad, showing average annual
production of 19.8 million ounces over 17 years. Cash costs are
estimated to be $6.03 per ounce of silver.

Spot silver has risen more than 60 percent in the past
three months, hitting a 30-year high of $29.33 an ounce in
early November.

The preliminary assessment sees costs of about $760 million
to bring Navidad into production.

“We view this study positively,” Raymond James analyst Brad
Humphrey said in a note to clients, “because it provides the
company, the Chubut government, and local communities with a
reference point for what the project could look like from an
economic point of view.”

Humphrey, who has a strong “buy” rating on Pan American,
added that while there are political risks, he believes the
company has the expertise to bring Navidad to market.

The Vancouver-based miner expects to release a full
feasibility study in the second quarter of 2011.

Pan American currently owns seven mines in Latin America,
and operates the La Preciosa project in Mexico.

The company produced 6.2 million silver equivalent ounces
in the third quarter of 2010, and is expected to exceed its
2010 target of 23.4 million silver equivalent ounces.

Pan American shares have risen more than 50 percent in the
past three months and were up 0.69 percent at C$39.44 on
Thursday on the Toronto Stock Exchange.

($1=$1.00 Canadian)
(Reporting by Julie Gordon; editing by Rob Wilson)

Pan American confident Navidad mine to go ahead