Plans to gain a minority interest in a Mexican silver producer have collapsed for Pan American Silver (TSE), which is now investigating other acquisitions and joint ventures.
The company had reached an agreement with Homestake Mining (NYSE) to acquire a 30% interest in a Mexican silver company for US$6 million, but was forced out of the deal when another group exercised its right of first refusal.
Pan American is negotiating to acquire another Latin American silver mine and is reviewing three other silver mines for potential acquisition.
The company, which has been acquiring silver projects in North and South America, hopes to be producing 5 million oz. per year by the end of 1995.
It was recently granted the right to develop the Zacatecana silver tailings deposit in Mexico, which contains more than 11 million tons grading 3 oz. silver per ton. A 135-hole drilling program is in progress.
Output is projected at 4 million oz. per year at an operating cost of less than US$2 per oz. A production decision could be made as early as the third quarter.
Meanwhile, Pan American has received a proposal to joint-venture one of its dormant silver projects from a major mining company which is interested in testing the deep, base-metal potential below the known silver resource. The two companies are negotiating a deal which will exclude the known silver deposit.
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