Nov. 10 (Bloomberg) -- Pan American Silver Corp., the Canadian silver and zinc producer with mines in Mexico, Argentina and Peru, said third-quarter profit nearly tripled as increased metals output offset lower prices.

Net income was $17.4 million, or 20 cents a share, compared with $6.4 million, or 8 cents, a year earlier, Vancouver-based Pan American said today in a statement.

Mining companies including Pan American, Glencore International AG and Hochschild Mining Plc slashed jobs and planned to shut mines in Peru after the global financial crisis eroded demand for zinc and lead. Pan American needs to expand production further to make up for the drop in prices, said JPMorgan Chase & Co. analyst John Bridges.

“Pan American has largely completed this process and is looking for assets to acquire,” Bridges, who rates the company’s shares “underweight,” said in an Oct. 14 note to clients. “We see downside risk.”

Pan American rose 38 cents, or 1.6 percent, to close at C$24.77 in Toronto Stock Exchange trading. The earnings report was released after the market closed.

Sales rose 49 percent to $118.6 million, the company said. Pan American sold silver at an average price of $14.69 an ounce in the quarter, down 2.5 percent from a year ago. Gold prices rose 10 percent, while zinc fell 1 percent and copper fell 24 percent.

Silver production climbed 31 percent to a record 6.35 million ounces in the third quarter, while zinc production gained 16 percent and gold output rose fourfold on the start up of the Manantial Espejo mine in Argentina, the company said.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

Last Updated: November 11, 2009 00:03 EST