Pan American Silver produced record 6.9 Million Ounces of Silver in the Fourth Quarter of 2012

Pan American Silver produced record 6.9 Million Ounces of Silver in the Fourth
                               Quarter of 2012

PR Newswire

VANCOUVER, Jan. 22, 2013

2012 Annual Silver Production Reached Record 25.1 Million Ounces

All amounts expressed in US$ unless otherwise indicated

VANCOUVER, Jan. 22, 2013 /PRNewswire/ - Pan American Silver Corp. ("Pan
American" or the "Company") (NASDAQ: PAAS) (TSX: PAA) produced a record 6.9
million ounces of silver during the fourth quarter of 2012, propelling the
Company to a new annual production record of 25.1 million ounces for the full
year.

The Company also  produced a record  32,381 ounces of  gold during the  fourth 
quarter of 2012, lifting annual gold  production to112,283 ounces, also a  new 
record.

Fourth Quarter 2012 Preliminary Unaudited Operational Highlights *

  *Record silver production of 6.9 million ounces, an increase of 30% over
    the fourth quarter of 2011
  *Record gold production of 32,381 ounces, an increase of 88% over the
    fourth quarter of 2011
  *Preliminary, consolidated cash costs of $11.75 per ounce of silver, net of
    by-product credits

2012 Full Year Preliminary Unaudited Operational Highlights ^*

  *Record silver production of 25.1 million ounces, an increase of 15% from
    2011
  *Record gold production of 112,300 ounces, an increase of 43% from 2011
  *Preliminary consolidated cash costs of $12.03 per ounce of silver, net of
    by-product credits

* Cash costs per ounce for both the quarter and full year have been estimated
and could change based on final audited results.

Geoff Burns,  President  and CEO  of  Pan  American commented,  "2012  was  an 
excellent production  year for  Pan  American. We  achieved our  targets  for 
silver production and cash  costs during the fourth  quarter and for the  full 
year, and in the  process we set new  quarterly and annual production  records 
for silver and gold. In large part this was the result of the acquisition and
integration of the Dolores  mine. However, we also  saw both our La  Colorada 
and San Vicente mines establish new annual silver production records. We  are 
expecting 2013 to be even better, as we are forecasting increases in both  our 
silver and gold  production while our  cash costs per  ounce remain  basically 
unchanged."

Full year 2012 silver and gold production and preliminary, unaudited cash
costs by mine are presented in the following table:

Mine              2012 Ag Production (Moz) 2012 Au Production Cash Costs^(2)
                                                (Oz)^(1)
La Colorada                 4.4                  3,600            $8.64
Alamo Dorado                5.4                  18,000           $5.05
Dolores^(3)                 2.7                  43,500           $4.05
Huaron                      2.9                   700             $17.51
Morococha (92.2%)           2.1                  2,800            $23.48
San Vicente (95%)           3.7                    0              $18.92
Manantial Espejo            3.6                  43,300           $14.65
Quiruvilca^(4)              0.3                   400             $36.33
Total                       25.1                112,300           $12.03

     
^(1)  Rounded to the nearest hundred
^(2) Cash costs per silver ounce, net of by-product credits. Average
      by-product metal prices during 2012 were: Au
     $1,671.02/oz, Zn $1,961/tonne, Pb $2,052/tonne, Cu $7,879/tonne.
^(3)  Includes production from April 1, 2012 until December 31, 2012.
^(4)  The Company sold the Quiruvilca mine effective June 1, 2013.
     

Pan American also produced  36,848 tonnes of zinc,  12,266 tonnes of lead  and 
4,162 tonnes of copper for the full year 2012.

2013 Operational Forecast

This year, Pan American expects to produce 25 to 26 million ounces of  silver, 
an increase of up to  one million ounces from  2012, while gold production  is 
expected to climb to up to 34% to between 140,000 and 150,000 ounces.

Cash costs are forecast at $11.80 to $12.80 per ounce of silver for 2013,  net 
of by-product credits, which is comparable to 2012 actual results.

The Company anticipates similar  levels of base metals  production in 2013  at 
36,000 to 39,600 tonnes of zinc, 11,500 to 12,500 tonnes of lead, and 3,500 to
4,000 tonnes of copper.

Capital investments in 2013  are expected to total  $157 million. The  Dolores 
mine, where several major projects are planned, will require approximately $68
million. Dolores'  capital projects  include; the  construction of  the  first 
phase  of  leach   pad  3,  significant   pre-stripping  and  the   systematic 
rehabilitation of the  mining fleet.  The Company  also plans  to invest  $15 
million at La Colorada, $7.5 million  at Alamo Dorado, $20 million at  Huaron, 
$15 million at  Morococha, $11.5 million  at San Vicente,  and $20 million  at 
Manantial Espejo.

The following table presents 2013 forecast silver and gold production and cash
costs by mine:

Mine              2013 Ag Production 2013 Au Production  Cash Costs^(2)
                        (Moz)             (Oz)^(1)
La Colorada          4.60 - 4.70       4,300 - 4,500     $9.00 - $9.75
Alamo Dorado         4.80 - 5.00      16,000 - 16,500    $8.25 - $8.50
Dolores              3.25 - 3.45      63,500 - 68,000    $2.25 - $3.50
Huaron               2.85 - 2.95        500 - 1,000     $20.00 - $22.00
Morococha (92.2%)    2.40 - 2.60       2,200 - 2,500    $20.50 - $22.25
San Vicente (95%)    3.75 - 3.85             0          $17.26 - $18.00
Manantial Espejo     3.35 - 3.45      53,500 - 57,500   $13.00 - $14.25
Total               25.00 - 26.00    140,000 - 150,000  $11.80 - 12.80

         
^(1) Rounded to the nearest hundred
          Cash costs per silver ounce, net of by-product credits. By-product
^(2)  metal prices assumptions used for 2013
          cash costs calculation: Au $1,600/oz, Zn $1,925/tonne, Pb
          $1,975/tonne, Cu $7,800/tonne
         

Commenting on  2013's  production and  capital  forecast, Steve  Busby,  Chief 
Operating Officer, said, "2013 looks  to be another record  setting-production 
year for Pan American. We're calling for  up to a one million ounce  increase 
in silver production  and up  to a  34% jump in  gold production.  I am  also 
pleased to say that  it appears as  though our cash  costs have stabilized  at 
2012 levels of  between $11.80 and  $12.80 per ounce."  Mr. Busby  continued, 
"Our capital  budget  for 2013  is  larger than  normal,  as we  have  several 
multi-year projects  planned  for  2013 at  our  operations.  These  include; 
construction of leach pad 3 at Dolores, and tailings dam expansions at Huaron,
San Vicente and La Colorada,  as well as a significant  open pit push back  at 
Alamo Dorado. I'm  expecting our  capital programs  to return  to more  normal 
levels in 2014 once these projects are completed."

Technical information  contained in  this  news release  with respect  to  Pan 
American  has  been  reviewed  by  Michael  Steinmann,  P.Geo.,  Executive  VP 
Corporate Development  & Geology,  and Martin  Wafforn, P.Eng.,  VP  Technical 
Services, who  are the  Company's Qualified  Persons for  the purposes  of  NI 
43-101.

Pan American will announce its unaudited 2012 fourth quarter and 2012 consolidated
results on
Wednesday, February 20, 2013 after market close. A conference call and live audio
webcast to discuss
the results will be held on Thursday, February 21 at 11:00 am EST (8:00 am PST). To
access the
conference, North American participants dial 1-888-390-0546, followed by conference ID
94638671. A
live audio webcast can be accessed at
http://www.newswire.ca/en/webcast/detail/1098699/1197127.
Listeners may also gain access to the webcast by logging on at
http://www.panamericansilver.com/category/events/?eventDate=2013-02&eventDisplay=month.
The
call will be available for replay for one week after the call by dialing 1-416-764-8677
and entering PIN
638671.

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,  including  the  recently  acquired 
Dolores gold/silver mine in Chihuahua, Mexico. Pan American also owns the  La 
Virginia development project in Sonora, Mexico, the Waterloo silver project in
California, USA as well as both the Navidad silver project and Calcatreu  gold 
project in Argentina.

NON-IFRS MEASURE - CASH COSTS PER OUNCE

THIS NEWS RELEASE PRESENTS INFORMATION ABOUT  OUR CASH COSTS OF PRODUCTION  OF 
AN OUNCE OF SILVER FOR OUR OPERATING MINES. CASH COSTS PER OUNCE PRODUCED  IS 
CALCULATED AS FOLLOWS:

  *EXCEPT AS OTHERWISE NOTED, CASH COSTS PER OUNCE PRODUCED IS CALCULATED BY
    DIVIDING TOTAL CASH COSTS BY TOTAL SILVER OUNCES PRODUCED AT THE RELEVANT
    MINE OR MINES

  *TOTAL CASH COSTS INCLUDE MINE OPERATING COSTS SUCH AS MINING, PROCESSING,
    ADMINISTRATION, ROYALTIES AND OPERATING TAXES, BUT EXCLUDE AMORTIZATION,
    RECLAMATION COSTS, FINANCING COSTS AND CAPITAL DEVELOPMENT AND
    EXPLORATION. CERTAIN AMOUNTS OF STOCK-BASED COMPENSATION ARE EXCLUDED AS
    WELL

CASH COST  PER OUNCE  OF SILVER  PRODUCED  IS INCLUDED  IN THIS  NEWS  RELEASE 
BECAUSE CERTAIN INVESTORS USE THIS  INFORMATION TO ASSESS OUR PERFORMANCE  AND 
ALSO TO DETERMINE OUR ABILITY TO GENERATE  CASH FLOW FOR USE IN INVESTING  AND 
OTHER ACTIVITIES. THE INCLUSION OF CASH  COSTS PER OUNCE PRODUCED MAY  ENABLE 
INVESTORS TO BETTER UNDERSTAND YEAR-OVER-YEAR CHANGES IN OUR PRODUCTION COSTS,
WHICH IN TURN AFFECT PROFITABILITY AND CASH FLOW.

CASH COSTS  PER OUNCE  PRODUCED DOES  NOT  HAVE A  STANDARDIZED MEANING  OR  A 
CONSISTENT BASIS OF CALCULATION PRESCRIBED BY CANADIAN ACCOUNTING  STANDARDS. 
INVESTORS ARE  CAUTIONED THAT  CASH COSTS  PER OUNCE  PRODUCED SHOULD  NOT  BE 
CONSIDERED IN ISOLATION OR  CONSTRUED AS A SUBSTITUTE  TO COSTS DETERMINED  IN 
ACCORDANCE WITH CANADIAN ACCOUNTING STANDARDS  AS PRESCRIBED UNDER IFRS AS  AN 
INDICATOR OF  PERFORMANCE. OUR  METHOD OF  CALCULATING CASH  COSTS PER  OUNCE 
PRODUCED MAY DIFFER FROM THE METHODS USED BY OTHER ENTITIES AND,  ACCORDINGLY, 
OUR CASH COSTS PER  OUNCE PRODUCED MAY NOT  BE COMPARABLE TO SIMILARLY  TITLED 
MEASURES USED BY OTHER ENTITIES. SEE OUR MD&A FOR THE YEAR ENDED DECEMBER31,
2011 FILED ON SEDAR  AT WWW.SEDAR.COM FOR A  RECONCILIATION OF CASH COSTS  PER 
OUNCE PRODUCED TO THE MOST DIRECTLY COMPARABLE ACCOUNTING MEASURE UNDER IFRS.

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 PRODUCTION OF SILVER, GOLD AND
OTHER METALS IN 2013; OUR CASH COSTS PER OUNCE OF SILVER IN 2013; OUR  CAPITAL 
INVESTMENTS FOR 2013; AND OUR CAPITAL PROGRAMS IN 2014.

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;
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.  SUCH 
RISKS AND  UNCERTAINTIES INCLUDE,  BUT  ARE NOT  LIMITED TO:  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; 
OUR ABILITY  TO  COMPLETE  AND  SUCCESSFULLY  INTEGRATE  ACQUISITIONS  AND  TO 
MITIGATE OTHER BUSINESS COMBINATION RISKS; 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  PROVINCIAL   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 UNDERTAKE  ANY OBLIGATION TO UPDATE OR  REVISE 
FORWARD-LOOKING  STATEMENTS  OR  INFORMATION,  WHETHER  AS  A  RESULT  OF  NEW 
INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT TO THE EXTENT REQUIRED BY LAW.





SOURCE Pan American Silver Corp.

Contact:

Information Contact

Kettina Cordero
Manager, Investor Relations
(604) 684-1175
info@panamericansilver.com
www.panamericansilver.com
 
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