Pan American Silver eyes Manantial Espejo (February 25, 2002)

Vancouver — The development of the Manantial Espejo silver-gold project has moved a step closer to reality as Silver Standard Resources (SSO-V) inked two deals that pave the way for Pan American Silver (PAA-T) to earn a 50% stake in the promising property in Argentina’s Santa Cruz province.

Silver Standard, which acquired an initial 10% interest in the project from Barrick Gold (ABX-T) last August and has an option to earn a further 40% of Black Hawk Mining‘s (BHK-T) 90% interest, agreed to purchase the remaining 50% for US$2 million in cash or shares. Silver Standard then inked a deal to vend a 50% interest in the project to proven silver miner, Pan American. The price tag to Pan American is US$2 million in cash or shares, plus the first US$3 million on mine construction. Prior to a production decision, the two companies will share exploration cost equally, started Jan. 1, 2002.

At last report, measured and indicated resources at the Manantial Espejo deposit totalled 4.4 million tonnes grading 263.8 grams silver and 4.51 grams gold per tonne. The inferred resource stands at 1.6 million tonnes grading 258.2 grams silver and 3.65 grams gold. Measured and indicated resources represent 73% of the total resource.

Discovered in 1989, the project consists of eight concessions covering 225 sq. km. It is 160 km west of the tidewater port of Puerto San Julian and is accessible via an all-weather gravel road. Geologically, the property is underlain by Jurassic-aged andesitic flows and agglomerates covered by felsic tuffs and ignimbrites. Silver and gold mineralization is generally confined to continuous shoots in quartz veins, which form in northwest-striking fault zones.

Pan American produced 6.9 million oz of silver from its three wholly-owned mines in Peru and Mexico during 2001. This marked a 90% jump from 2000. By-product zinc production increased by 26% to 30,870 tonnes, lead production soared 97% to 17,191 tonnes, and copper production increased 78% to 2,161 tonnes. The dramatic increase was the result of Pan American opening two new mines last year. In April, the Huaron mine in Peru began full-scale production and in January 2001 the La Colorada mine in Mexico started small-scale production.

The silver miner expects to crank out 9.2 million oz this year, a 33% boost over 2001’s tally.