Pan American Silver's 2012 annual revenue soars on record silver and gold production

  Pan American Silver's 2012 annual revenue soars on record silver and gold
                                  production

PR Newswire

VANCOUVER, Feb. 20, 2013

The Company Generated Annual Adjusted Earnings of $1.26 per Share

(Unaudited Results - All amounts in US dollars unless otherwise stated and all
production figures are approximate)

VANCOUVER, Feb. 20,  2013 /PRNewswire/  - Pan American  Silver Corp.  (NASDAQ: 
PAAS; TSX: PAA) (the "Company", or "Pan American"), posted a net loss of $29.4
million during the fourth quarter of 2012, including a non-cash after-tax $100
million impairment  charge  on the  carrying  value of  the  Navidad  deposit. 
Excluding the impairment charge and a  $14.2 million gain on derivatives,  the 
Company generated adjusted earnings^(1) for  the quarter of $55.8 million,  or 
$0.37 per share. For the full year 2012, adjusted earnings were $177.9 million
or $1.26 per share.

 Fourth Quarter 2012 Highlights (unaudited) ^(2)
•Silver production of 6.9 million ounces, an increase of 29%.
•Gold production of 32,400 ounces, an increase of 88%.
•Consolidated cash costs^(3) of $11.75 ^ per ounce of silver, net of
by-product credits.
•Mine operating earnings^(4)  of $85 million.
•Recorded a $100 million non-cash impairment charge on the carrying value
of the Navidad project.
•Net loss of ($29.4) million or ($0.19) per share.
•Adjusted earnings^(1) of $55.8 million or $0.37 per share.
•Operating cash flows before changes in non-cash operating working
capital^(5) of $86.1 million or $0.57 per share.
•Revenue of $247.3 million.
2012 Year-End Highlights (unaudited) ^(2)
•Record silver production of 25.1 million ounces.
•Record gold production of 112,300 ounces.
•Record revenue of $928.6 million.
•Consolidated cash costs^(3) of $12.03 per ounce of silver, net of
by-product credits.
•Mine operating earnings^(4) of $311.4 million.
•Net earnings of $87.5 million, or $0.62 per share.
•Adjusted earnings^(1) of $177.9 million, or $1.26 per share.
•Operating cash flows before changes in non-cash operating working
capital^(5) of $215.5 million or $1.53 per share.
•Cash and short term investments of $542.3 million at December 31, 2012.
•Working capital of $779 million at December 31, 2012.
•Invested $41.7 million to repurchase approximately 2.4 million shares of
the Company under the Company's normal course issuer bid.
•Paid total cash dividends of $24.9 million, or $0.20 per common share.
•Completed the acquisition of Minefinders Corporation Ltd.
("Minefinders") and integrated the Dolores mine into our portfolio of assets.
•Divested the high-cost Quiruvilca mine in Peru.
•Produced the best safety record in the Company's history.
2013 Forecast and Plans
•Produce 25.0 to 26.0 million ounces of silver at cash costs of $11.80 to
$12.80 per ounce, net of by-product credits.
•Complete a mill development study for the Dolores mine.
•Complete a Preliminary Economic Assessment for an expansion of the La
Colorada mine.
•Complete confirmation drilling campaign and publish a new Mineral
Resource estimate for the Waterloo deposit.

^(1) Adjusted earnings is a non-GAAP measure calculated as net earnings for
the period adjusting for the gain or loss recorded on fair market value
adjustments on the Company's outstanding warrants. The Company considers this
measure to better reflect normalized earnings as it does not include
unrealized gains or losses from outstanding warrants, which may be volatile
from period to period.
^(2) Financial information in this news release is based on International
Financial Reporting Standards ("IFRS"); results are unaudited; percentages
compare period-on-period.
^(3) Cash costs per payable ounce of silver is a non-GAAP measure. The Company
believes that in addition to production costs, depreciation and amortization,
and royalties, cash costs per ounce is a useful and complementary benchmark
that investors use to evaluate the Company's performance and ability to
generate cash flow and is well understood and widely reported in the silver
mining industry. However, cash costs per ounce does not have a standardized
meaning prescribed by IFRS as an indicator of performance. Investors are
cautioned that cash costs per ounce should not be construed as an alternative
to production costs, depreciation and amortization, and royalties determined
in accordance with IFRS as an indicator of performance. The Company's method
of calculating cash costs per ounce may differ from the methods used by other
entities and, accordingly, the Company's cash costs per ounce may not be
comparable to similarly titled measures used by other entities. See
"Financial and Operating Highlights" below for a reconciliation of this
measure to the Company's production costs, depreciation and amortization, and
royalties.
^(4) Mine operating earnings is a non-GAAP measure used by the Company to
assess the performance of its silver mining operations. Mine operating
earnings is calculated as revenue less production costs, depreciation and
amortization and royalties. The Company and certain investors use this
information to evaluate the Company's performance.
^(5) Operating cash flows before changes in non-cash operating working capital
is a non-GAAP measure. This non-GAAP measure is used by the Company to manage
and evaluate operating performance and the Company considers this measure to
better reflect normalized cash flow generated by operations. Cash flow from
operations per share is a non-GAAP measure. Cash flow from operations before
changes in working capital per share is used as a measure of return on capital
and is calculated using cash flow from operations, before working capital
changes, divided by basic weighted average shares outstanding.

Geoff Burns, President & CEO commented  on the fourth quarter and fiscal  2012 
results; "As I said when we released our production results several weeks ago,
2012 was  an  excellent  production  year. We  met  our  targets  for  silver 
production and cash costs during the fourth quarter for the full year, and  in 
the process we set new quarterly and annual production records for silver  and 
gold. It is rewarding to deliver  financial results that echo our  production 
performance. Adjusted earnings  for the year  were a very  healthy $1.26  per 
share and  operating cash  flow was  also robust  at $1.53  per share.  As  a 
consequence of  our expected  continued excellent  financial performance,  the 
Board has agreed to decisively increase  our quarterly dividend from $0.05  to 
$0.125 per share, a clear testament  to the strength and profitability of  Pan 
American. 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 should remain basically unchanged".

Financial Results

Pan American generated revenue of $247.3 million during the fourth quarter  of 
2012, which was 16% higher year-on-year. The increase resulted primarily from
higher quantities  of  silver  and  gold  sold,  combined  with  modest  price 
increases for all the metals produced by the Company. Annual revenue for 2012
rose 9%  from  the  previous  year  to a  record  $928.6  million,  driven  by 
significantly higher quantities of precious  metals sold, partially offset  by 
lower realized  prices  for all  metals  produced  by the  Company,  with  the 
exception of gold.

In 2012, Pan American  realized average prices for  silver and gold of  $31.26 
per ounce and $1,672.30 per ounce, respectively. Average realized prices  for 
zinc, lead and copper were $1,971 per  tonne, $2,071 per tonne and $7,879  per 
tonne, respectively. On  an annualized  basis, silver accounted  for 71%  and 
gold accounted for 18% of the  Company's revenue, while zinc, lead and  copper 
contributed 6%, 2% and 3% of total revenue, respectively.

During the fourth quarter of 2012, Pan American recorded a net loss of ($29.4)
million or ($0.19) per share, primarily due to the Company's decision to incur
a $100  million non-cash  impairment charge  on the  Navidad deposit,  thereby 
decreasing the  carrying  value  from  $570  million  to  $470  million.  The 
impairment charge was taken  in recognition of  the deterioration of  business 
conditions in  Argentina  and  the uncertainty  the  current  environment  has 
created. The Company remains committed to the development of Navidad; however,
as previously disclosed, the project will remain on care and maintenance until
conditions improve.

Adjusted earnings for the fourth quarter  of 2012 were $55.8 million or  $0.37 
per share, after  adjusting for the  $100 million impairment  charge, a  $14.2 
million non-cash gain  on the valuation  of the Company's  derivatives, and  a 
$0.6 million unrealized gain on foreign exchange. Quarterly adjusted earnings
further benefited from a $2.5 million gain on the sale of investment shares in
Orko Silver,  $2.5 million  realized  from option  payments on  the  company's 
Peruvian exploration properties,  and $0.8 million  in silver option  payments 
from the Quiruvilca property. For the full year 2012, Pan American  generated 
consolidated net earnings of  $87.5 million or $0.62  per share, and  adjusted 
earnings of $177.9 million or $1.26 per share.

Mine operating earnings  generated during the  last quarter of  2012 were  $85 
million, 4% lower year-on-year. The decline  was mainly the result of  higher 
operating costs resulting from higher labour, consumables and energy  expenses 
at the Peruvian, Argentinean and Bolivian operations. Mine operating earnings
for the year 2012 were $311.4 million,  a decline of 24% as compared to  2011, 
predominantly due to lower realized metal prices in 2012.

Operating cash  flows before  changes in  non-cash operating  working  capital 
during the fourth quarter of 2012 was  $86.1 million, or $0.57 per share,  11% 
less than in the same period of 2011. Operating cash flows before changes  in 
non-cash operating working capital  for the year 2012  was $215.5 million,  or 
$1.53 per share, a decline of 46% from the previous year.

Cash and short term  investments at December 31,  2012 rose to $542.3  million 
from $491.2 million at year-end 2011.  The Company's working capital rose  to 
$779 million, 37% more  than at year-end 2011.  The Company maintains one  of 
the cleanest balance sheets in the  industry, with minimal debt consisting  of 
$36.9 million in capital  lease obligations and  $41.1 million in  convertible 
notes acquired in connection with the Minefinders' transaction.

During the last quarter of 2012 the Company repurchased approximately  598,000 
shares under the current normal course  issuer bid for total consideration  of 
approximately $10.7  million. In  2012, the  Company spent  $41.7 million  to 
purchase approximately 2.4 million shares. At December 31, 2012, Pan American
had 151,820,635  issued  and  outstanding common  shares.  In  addition,  Pan 
American distributed  a  total of  $7.6  million  and $24.9  million  in  cash 
dividends to shareholders  during the fourth  quarter of and  full year  2012, 
respectively.

The Company's effective tax  rates for the fourth  quarter and full year  2012 
were 25% and 34%, respectively using adjusted earnings. Effective rates  vary 
considerably between  periods and  from  the amounts  that would  result  from 
applying the Canadian  statutory income  tax rates to  earnings before  income 
taxes. The main factors that have  affected the effective tax rate for  2012 
and the comparable period were the non-taxable portion of unrealized gains and
losses on the  Company's derivatives, foreign  income tax rate  differentials, 
foreign exchange  and  non-recognition of  certain  deferred tax  assets.  In 
addition, the Company took a non-cash impairment charge on its Navidad  asset. 
The Company  expects that  these  and other  factors  will continue  to  cause 
volatility in effective  tax rates in  the future and  that the effective  tax 
rate for 2013 would be 30% to 35%.

Production and Operations

During the last  quarter of 2012,  the Company produced  a record 6.9  million 
ounces of  silver and  32,400 ounces  of gold,  an increase  of 29%  and  88%, 
respectively year-on-year. The production increase resulted from the addition
of silver and gold  production from Dolores, and  higher silver production  at 
Alamo Dorado,  Manantial  Espejo, Morococha  and  San Vicente  due  to  higher 
throughput and grades. Annual consolidated silver production in 2012 was also
a record at 25.1 million ounces, as expected.

Over half of the Company's silver is  now being produced at its three  Mexican 
operations. During  the fourth  quarter  of 2012,  La Colorada  produced  1.1 
million ounces, 3% higher year-on-year primarily due to higher grades.  Alamo 
Dorado produced 1.6 million ounces of silver, which was 26% higher than in the
fourth quarter of  2011 due  to higher  grades and  recoveries. In  addition, 
Dolores produced 0.9  million ounces  of silver,  a 16%  improvement from  the 
previous quarter. During the full year 2012, La Colorada produced a total  of 
4.4 million ounces of silver and  Alamo Dorado produced 5.4 million ounces  of 
silver, while Dolores contributed  2.7 million ounces of  silver from April  1 
until December 31, 2012.

Pan American's Peruvian  operations had  a good  fourth quarter  of 2012  with 
Huaron and Morococha producing  0.8 million ounces and  0.6 million ounces  of 
silver, respectively. Huaron's production  was slightly lower year-on-year  on 
lower grades; whereas Morococha's silver  production rose 38% year-on-year  on 
higher throughput and grades. For the full year 2012, the Company's  Peruvian 
operations produced a  combined total  of 5.3  million ounces  of silver:  2.9 
million at Huaron,  2.1 million at  Morococha, and 0.3  million at  Quiruvilca 
before the Company divested the mine effective June 1, 2012.

In Bolivia, higher throughput and grades at San Vicente boosted production  to 
1 million  ounces  of silver  during  the last  quarter  of 2012,  15%  higher 
year-on-year and  to 3.7  million ounces  during the  full year  2012, or  19% 
greater than the previous year.

In Argentina, better  throughput, grades  and recoveries  at Manantial  Espejo 
drove a  25% increase  in quarterly  silver production  compared to  the  last 
quarter of 2011 to 1 million ounces.  Silver production for the year was  3.6 
million ounces, slightly lower than the 3.8 million ounces produced in 2011.

Pan American's consolidated 2012 gold production was a record 112,300  ounces, 
a 43% increase from 2011 due to the addition of production from Dolores, which
contributed 43,500 ounces and  more gold ounces produced  at Alamo Dorado  and 
Morococha, partially offset by less ounces produced at Manantial Espejo and La
Colorada and the divestiture of Quiruvilca.

At 36,900 tonnes of zinc,  12,300 tonnes of lead  and 4,200 tonnes of  copper, 
the  Company's  annual  consolidated  base  metals  production  exceeded   our 
expectations.

Pan American posted consolidated cash costs of $11.75 per ounce of silver, net
of by-product  credits,  during  the  last quarter  of  2012,  a  5%  increase 
year-on-year. 2012  annual consolidated  cash costs  of $12.03  per ounce  of 
silver, net  of  by-product credits  were  well within  Company  guidance  and 
represent an increase of 28% compared to 2011. The cash costs escalation  was 
driven mainly  by  industry-wide  escalation  for the  cost  of  supplies  and 
consumables like cyanide, labour cost increases in all jurisdictions where Pan
American operates, higher underground mine development rates at the  Company's 
Peruvian operations,  the strengthening  of the  Peruvian Sol  against the  US 
Dollar, higher smelting and refining costs and the increase in royalties  paid 
to COMIBOL, Pan American's  joint venture partner at  the San Vicente mine  in 
Bolivia.

In 2012, Pan American  spent $129 million in  sustaining capital at its  seven 
operations primarily for exploration activities, particularly at La  Colorada; 
open pit mine  pre-stripping at  Dolores, Manantial Espejo  and Alamo  Dorado; 
underground mine development  at Morococha and  Huaron; mobile mine  equipment 
repair and replacements across all mines; significant tailings dam  expansions 
at Huaron and La Colorada; and ancillary facility and infrastructure  upgrades 
across all mines.

In 2012, Pan American  spent $50 million on  major projects, $21 million  were 
spent for  advancing the  Navidad project  engineering and  design,  including 
preparation of an  Environmental Impact Assessment;  $5.6 million to  complete 
the Morococha ancillary facility relocation project; and $23.5 million at  the 
Dolores mine to conduct preliminary studies to assess the potential to enhance
long-term value with the addition of a milling circuit and/or underground mine
and to  advance leach  pad stabilization  and construction  efforts to  insure 
sustainability of heap leach  production. In addition,  Pan American spent  a 
total of $25 million in its  exploration programs, including $16.3 million  in 
mine-site exploration at its seven  operations and $8.7 million in  greenfield 
exploration activities at selected properties.

2013 Outlook

As indicated in the news release dated January 22, 2013, the Company plans  to 
make $157 million  in capital  investments this year.  Of this,  approximately 
$127 million will be  invested in sustaining capital  for the seven  operating 
mines,  primarily  for  near-mine   exploration  activities;  open  pit   mine 
pre-stripping at Dolores, Manantial Espejo and Alamo Dorado; underground  mine 
development at  Morococha and  Huaron; and  mobile mine  equipment repair  and 
replacements across all mines.

In addition, the Company plans  to invest $30 million  at the Dolores mine  on 
leach pad  stabilization,  expansion  and construction,  to  complete  a  mill 
scoping analysis and to initiate a power  line project to connect the mine  to 
the national power  grid. Pan  American is examining  the potential  economic 
benefits of increasing Dolores' production with the installation of a grinding
circuit to  treat part  of the  higher  grade ore  currently being  mined  and 
treated. The Company has launched preliminary engineering, as well as capital
and operating cost studies required to construct and operate a high grade  ore 
grinding and treatment circuit, which will culminate in a scoping study to  be 
completed during the third quarter of 2013.

At La Colorada, given the  mine's enormous exploration discovery success  over 
the last few years and the  favorable geometry of the mineral distribution  of 
those discoveries, the Company has initiated engineering studies to  determine 
the viability of  expanding the mine's  production and expects  to complete  a 
Preliminary Economic Assessment by year-end 2013 to define the magnitude,  the 
capital investment and the economic benefit of a potential expansion.

The Company  also plans  to  spend $3.6  million  to complete  a  confirmation 
drilling  campaign  at  the  Waterloo   deposit  in  San  Bernardino   County, 
California, and  to  conduct  additional  metallurgical  evaluations,  project 
scoping and a Mineral Resource estimate.

A further  $14.7  million is  expected  to  be spent  in  selected  greenfield 
exploration activities and  another $6.5  million in holding  costs for  other 
exploration properties.

Commenting on the  Company's operating results,  Steve Busby, Chief  Operating 
Officer, said; "Without a doubt,  our greatest accomplishment during 2012  for 
Pan American was our excellent safety performance, the prevention of lost time
accidents and a reduction in accident severity among all of our employees  and 
contractors. In addition, in 2012, we completed the Minefinder's  acquisition 
providing a significant boost of low-cost silver and gold production from  the 
Dolores mine in Mexico. We look forward  to having an excellent year in  2013 
and are excited to  advance the evaluation of  the milling circuit at  Dolores 
and the potential expansion of our La Colorada mine in Mexico with the goal of
increasing the Company's consolidated  silver production.I'd like to  extend 
my personal  thanks to  all of  our dedicated  and hardworking  employees  and 
contractors throughout  the  Company  who have  again  proven  their  superior 
ability to  successfully  overcome  the  challenges we  face  in  running  our 
business and achieving  consolidated operating performance  firmly within  our 
production and cost guidance for 2012. Thanks to these efforts, our  business 
is exceptionally  strong and  sustainable  and I  see  2013 shaping-up  to  be 
another good year."

                                     ***

About Pan American

Pan American'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.

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 host a conference call to discuss the results on Thursday,
February 21, 2013 at 11:00 am ET (08:00 am PT). To access the conference,
North American participants dial toll free 1-888-390-0546. International
participants dial 1-416-764-8688, or 778-383-7413. A live audio webcast can
be accessed at http://www.newswire.ca/en/webcast/detail/1098699/1197127
Listeners may also gain access by logging on at
http://www.panamericansilver.com/category/events/. The call will be available
for replay for one week after the call by dialing 1-416-764-8677, or
1-888-390-0541 and entering PIN # 638671.

CAUTIONARY NOTE REGARDING 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. WHEN USED IN THIS NEWS RELEASE THE WORDS, "BELIEVES",  "EXPECTS", 
"INTENDS",  "PLANS",   "FORECAST",  "OBJECTIVE",   "OUTLOOK",   "POSITIONING", 
"POTENTIAL", "ANTICIPATED", "BUDGET", AND OTHER SIMILAR WORDS AND EXPRESSIONS,
IDENTIFY FORWARD-LOOKING  STATEMENTS  OR INFORMATION.  THESE  FORWARD-LOOKING 
STATEMENTS OR INFORMATION RELATE TO, AMONG OTHER THINGS: FUTURE PRODUCTION  OF 
SILVER, GOLD AND OTHER METALS AND  THE TIMING OF SUCH PRODUCTION; FUTURE  CASH 
COSTS PER OUNCE OF SILVER; THE PRICE  OF SILVER AND OTHER METALS; THE  EFFECTS 
OF  LAWS,  REGULATIONS  AND  GOVERNMENT  POLICIES  AFFECTING  PAN   AMERICAN'S 
OPERATIONS OR POTENTIAL FUTURE OPERATIONS  INCLUDING, BUT NOT LIMITED TO,  THE 
LAWS IN THE PROVINCE  OF CHUBUT, ARGENTINA,  WHICH CURRENTLY HAVE  SIGNIFICANT 
RESTRICTIONS ON MINING, AND  RECENT AMENDMENTS TO THE  LABOUR LAWS IN  MEXICO; 
THE CONTINUING NATURE OF HIGH  INFLATION, RISING CAPITAL AND OPERATING  COSTS, 
CAPITAL  RESTRICTIONS  AND  RISKS  OF  EXPROPRIATION  IN  ARGENTINA  AND,   IN 
PARTICULAR, IN THE PROVINCE OF CHUBUT AND THEIR EFFECTS ON THE COMPANY AND ITS
ASSETS; THE DEVELOPMENT OF THE NAVIDAD PROJECT AND OTHER DEVELOPMENT PROJECTS
OF THE COMPANY;  THE TIMING  OF PRODUCTION  AND THE  CASH AND  TOTAL COSTS  OF 
PRODUCTION AT  EACH  OF  THE  COMPANY'S PROPERTIES;  THE  SUFFICIENCY  OF  THE 
COMPANY'S CURRENT  WORKING CAPITAL,  ANTICIPATED OPERATING  CASH FLOW  OR  ITS 
ABILITY TO RAISE  NECESSARY FUNDS;  TIMING OF  RELEASE OF  TECHNICAL OR  OTHER 
REPORTS, INCLUDING  ENVIRONMENTAL  IMPACT  ASSESSMENTS;  THE  ABILITY  OF  THE 
COMPANY TO ACHIEVE ANY PLANNED EXPANSIONS AND DEVELOPMENT, INCLUDING BUT  NOT 
LIMITED TO, POTENTIAL OPPORTUNITIES AND ADVANCEMENTS AT THE DOLORES MINE,  AND 
THE TIMING FOR  THE SAME; THE  ESTIMATES OF EXPECTED  OR ANTICIPATED  ECONOMIC 
RETURNS FROM THE COMPANY'S MINING PROJECTS; FORECAST CAPITAL AND NON-OPERATING
SPENDING; FUTURE SALES OF THE METALS, CONCENTRATES OR OTHER PRODUCTS  PRODUCED 
BY THE COMPANY; AND  THE COMPANY'S PLANS AND  EXPECTATIONS FOR ITS  PROPERTIES 
AND OPERATIONS.

THESE STATEMENTS REFLECT THE  COMPANY'S CURRENT VIEWS  WITH RESPECT TO  FUTURE 
EVENTS AND ARE NECESSARILY  BASED UPON A NUMBER  OF ASSUMPTIONS AND  ESTIMATES 
THAT, WHILE CONSIDERED REASONABLE  BY THE COMPANY,  ARE INHERENTLY SUBJECT  TO 
SIGNIFICANT   BUSINESS,   ECONOMIC,   COMPETITIVE,   POLITICAL   AND    SOCIAL 
UNCERTAINTIES AND CONTINGENCIES. MANY FACTORS, BOTH KNOWN AND UNKNOWN,  COULD 
CAUSE ACTUAL RESULTS, PERFORMANCE OR  ACHIEVEMENTS TO BE MATERIALLY  DIFFERENT 
FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT ARE OR MAY BE EXPRESSED  OR 
IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS CONTAINED IN THIS NEWS RELEASE  AND 
THE COMPANY HAS MADE ASSUMPTIONS AND ESTIMATES BASED ON OR RELATED TO MANY  OF 
THESE FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION: FLUCTUATIONS IN SPOT
AND  FORWARD  MARKETS  FOR  SILVER,  GOLD,  BASE  METALS  AND  CERTAIN   OTHER 
COMMODITIES (SUCH AS NATURAL GAS,  FUEL OIL AND ELECTRICITY); FLUCTUATIONS  IN 
CURRENCY MARKETS (SUCH  AS THE  CANADIAN DOLLAR, PERUVIAN  SOL, MEXICAN  PESO, 
ARGENTINE PESO AND BOLIVIAN BOLIVIANO  VERSUS THE U.S. DOLLAR); RISKS  RELATED 
TO THE TECHNOLOGICAL AND OPERATIONAL NATURE OF THE COMPANY'S BUSINESS; CHANGES
IN  NATIONAL  AND  LOCAL   GOVERNMENT,  LEGISLATION,  TAXATION,  CONTROLS   OR 
REGULATIONS INCLUDING AMONG OTHERS, CHANGES  TO IMPORT AND EXPORT  REGULATIONS 
AND LAWS  RELATING  TO  THE  REPATRIATION  OF  CAPITAL  AND  FOREIGN  CURRENCY 
CONTROLS; POLITICAL OR  ECONOMIC DEVELOPMENTS  IN CANADA,  THE UNITED  STATES, 
MEXICO, PERU,  ARGENTINA, BOLIVIA  OR OTHER  COUNTRIES WHERE  THE COMPANY  MAY 
CARRY ON  BUSINESS  IN THE  FUTURE;  RISKS  AND HAZARDS  ASSOCIATED  WITH  THE 
BUSINESS  OF   MINERAL   EXPLORATION,  DEVELOPMENT   AND   MINING   (INCLUDING 
ENVIRONMENTAL HAZARDS, INDUSTRIAL ACCIDENTS, UNUSUAL OR UNEXPECTED  GEOLOGICAL 
OR STRUCTURAL FORMATIONS, PRESSURES, CAVE-INS AND FLOODING); 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 AND  THE EFFECTS  OF LABOUR  LAWS IN  THOSE COUNTRIES  IN WHICH  THE 
COMPANY OPERATES;  RELATIONSHIPS  WITH AND  CLAIMS  BY LOCAL  COMMUNITIES  AND 
INDIGENOUS POPULATIONS;  AVAILABILITY  AND INCREASING  COSTS  ASSOCIATED  WITH 
MINING INPUTS AND LABOUR;  THE SPECULATIVE NATURE  OF MINERAL EXPLORATION  AND 
DEVELOPMENT, INCLUDING THE RISKS OF  OBTAINING NECESSARY LICENSES AND  PERMITS 
AND THE  PRESENCE OF  LAWS AND  REGULATIONS THAT  MAY IMPOSE  RESTRICTIONS  ON 
MINING, INCLUDING  THOSE  CURRENTLY  IN THE  PROVINCE  OF  CHUBUT,  ARGENTINA; 
DIMINISHING QUANTITIES OR GRADES OF MINERAL RESERVES AS PROPERTIES ARE  MINED; 
GLOBAL  FINANCIAL   CONDITIONS;  THE   COMPANY'S  ABILITY   TO  COMPLETE   AND 
SUCCESSFULLY INTEGRATE ACQUISITIONS AND TO MITIGATE OTHER BUSINESS COMBINATION
RISKS; CHALLENGES TO,  OR DIFFICULTY  IN MAINTAINING, THE  COMPANY'S TITLE  TO 
PROPERTIES AND  CONTINUED OWNERSHIP  THEREOF; THE  ACTUAL RESULTS  OF  CURRENT 
EXPLORATION ACTIVITIES, CONCLUSIONS  OF ECONOMIC EVALUATIONS,  AND CHANGES  IN 
PROJECT PARAMETERS  TO  DEAL WITH  UNANTICIPATED  ECONOMIC OR  OTHER  FACTORS; 
INCREASED COMPETITION  IN  THE  MINING  INDUSTRY  FOR  PROPERTIES,  EQUIPMENT, 
QUALIFIED PERSONNEL, AND THEIR COSTS;  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.  INVESTORS ARE  CAUTIONED AGAINST  ATTRIBUTING  UNDUE 
CERTAINTY OR RELIANCE ON FORWARD-LOOKING STATEMENTS. 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.  THE COMPANY DOES NOT  INTEND, 
AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE THESE FORWARD-LOOKING STATEMENTS
OR INFORMATION TO REFLECT CHANGES  IN ASSUMPTIONS OR CHANGES IN  CIRCUMSTANCES 
OR ANY OTHER EVENTS  AFFECTING SUCH STATEMENTS OR  INFORMATION, OTHER THAN  AS 
REQUIRED BY APPLICABLE LAW.

Pan American Silver Corp.
Financial & Operating Highlights
                         Three months ended         Twelve months ended
                            December 31,               December 31,
                           2012          2011           2012         2011
Consolidated                                                          
Financial Highlights
(Unaudited in                                                         
thousands of U.S.
Dollars)
                                                                     
Net (loss) earnings   $  (29,411) $       95,467 $        87,513 $     354,146
for the period
(Loss) earnings per   $    (0.19) $         0.89 $          0.62 $        3.31
share attributable to
common shareholders
(basic)
Adjusted earnings for $    55,777 $       55,775 $       177,859 $     251,247
the period^(1)
Adjusted earnings per $      0.37 $         0.52 $          1.26 $        2.36
share attributable to
common shareholders
(basic)
Mine operating        $    85,011 $       88,270 $       311,363 $     409,125
earnings
Net cash generated    $    81,603 $      104,967 $       193,305 $     359,455
from operating
activities
Operating cash flows  $    86,076 $       96,485 $       215,529 $     398,890
before changes in
non-cash operating
working capital^(2)
Capital spending      $  (65,269) $     (38,788) $     (159,915) $   (118,933)
Dividends Paid        $     7,618 $       $  24,919 $     
                                           2,639                        10,732
Shares repurchased    $    10,719 $   66,093 $   41,749 $      94,034
Cash and short-term   $   542,324 $      491,222 $       542,324 $     491,222
investments
Working capital^(3)   $   778,669 $      566,430 $       778,669 $     566,430
                                                                     
Consolidated Metals                                                   
Recovered ^(4)
                                                                     
Silver metal - ounces  6,894,166     5,334,537     25,075,298   21,853,582
Gold metal - ounces       32,381        17,239        112,283       78,426
Zinc metal - tonnes        8,886        10,730         36,848       37,234
Lead metal - tonnes        2,805         3,400         12,266       12,701
Copper metal - tonnes      1,137         1,173          4,162        4,544
                                                                     
Average Price                                                         
Realized
                                                                     
Silver metal ($/oz)   $     33.41 $        32.49 $         31.26 $       35.03
Gold metal ($/oz)    $     1,728 $        1,683 $         1,672 $       1,567
Consolidated Cost per                                                 
Ounce of Silver (net
of by-product
credits) ^ (4),(5)
                                                                     
Total cash cost per   $     11.75 $        11.18 $         12.03 $        9.44
ounce
Total production cost $     16.12 $        16.74 $         16.88 $       13.51
per ounce
                                                                     
Payable ounces of      6,558,268     5,020,804     23,746,108   20,753,040
silver (used in cost
per ounce
calculations)

^(1)    Adjusted earnings and adjusted earnings per share attributable to
        common shareholders are non-GAAP measures. Adjusted earnings is
        calculated as net earnings
        for the period adjusting for the gains or losses recorded on fair
        market value adjustments on the Company's outstanding derivative
        instruments, unrealized foreign
        exchange gains or losses, unrealized gain or loss on commodity
        contracts, the transaction costs arising from the Minefinders
        transaction, write-down of mining assets,
        and gains on the disposition of mineral interests. The Company
        considers this measure to better reflect normalized earnings as it
        does not include items which may
        be volatile from period to period.
                                                           
                            Three months ended       Twelve months ended
                                  December 31,              December 31,
       Adjusted Earnings        2012        2011        2012         2011
        Reconciliation
       Net (loss)
        earnings for the   $  (29,411)  $    95,467  $    87,513  $    354,146
        period
       Adjust derivative    (14,203)    (30,994)    (24,159)    (101,828)
        (gains) losses
       Adjust unrealized
        foreign exchange        (584)     (9,627)       6,124      (1,071)
        (gains) losses
       Adjust unrealized
        (gains) losses of        (34)         929        (25)            -
        commodity
        contracts
       Adjust                      -           -      16,162            -
        acquisition costs
       Adjust gain on
        sale of mineral             -           -     (7,765)            -
        property
       Adjust write-down     100,009           -     100,009            -
        of mining assets
       Adjusted earnings  $    55,777  $    55,775  $   177,859  $    251,247
        for the period
       
^(2) Operating cash flows before changes in non-cash operating working
        capital is a non-GAAP measure used by the Company to manage and
        evaluate operating
        performance. The Company considers this measure to better reflect
        normalized cash flow generated by operations.
^(3) Working capital is a non-GAAP measure calculated as current assets
        less current liabilities. The Company and certain investors use this
        information to evaluate
        whether the Company is able to meet its current obligations using its
        current assets.
^(4)    Includes Quiruvilca mine operating results through May 2012.
^(5)    Consolidated cost per ounce of silver is a non-GAAP measure. The
        Company believes that in addition to production costs, depreciation
        and amortization, and
        royalties, cash cost per ounce is a useful and complementary benchmark
        that investors use to evaluate the Company's performance and ability
        to generate cash
        flows and is well understood and widely reported in the silver mining
        industry. However, cash cost per ounce does not have a standardized
        meaning prescribed
        by IFRS as an indicator of performance. Investors are cautioned that
        cash costs per ounce should not be construed as an alternative to
        production costs,
        depreciation and amortization, and royalties determined in accordance
        with IFRS as an indicator of performance. The Company's method of
        calculating cash
        costs per ounce may differ from the methods used by other entities.
        See "Cash Costs and Total Operating Costs per Ounce of Payable Silver"
        below for a
        reconciliation of this measure to the Company's production costs,
        depreciation and amortization and royalties.

Mine Operations                                                            
Highlights
                          Three months ended         Twelve months ended
                             December 31,                December 31,
                           2012        2011        2012        2011 
                                                                
La Colorada Mine                                                 
                                                                
Tonnes milled            106,396     105,500     419,591     404,533 
Average silver grade         377         352         374         369 
- grams per tonne
Average silver              90.0 %       89.6 %       89.6 %       89.5 %
recovery - percent
Silver - ounces        1,096,603   1,068,800   4,431,111   4,295,783 
Gold - ounces                737       1,043       3,578       4,104 
Zinc - tonnes              1,511       1,129       5,599       4,466 
Lead - tonnes                726         610       2,766       2,388 
                                                                
Total cash cost per   $      8.50  $      9.26  $      8.64  $      7.74 
ounce ^(1)
Total production cost $      9.94  $     11.45  $      9.96  $      8.99 
per ounce ^(1)
                                                                
Payable ounces of      1,043,125   1,018,608   4,215,075   4,093,851
silver

                                                                 
                          Three months ended         Twelve months ended
                             December 31,               December 31,
                            2012        2011        2012        2011 
                                                                 
Alamo Dorado Mine                                                 
                                                                 
Tonnes milled             429,544     436,251   1,697,941   1,848,230 
Average silver grade -        128         102         116         105 
grams per tonne
Average gold grade -         0.35        0.34        0.38        0.33 
grams per tonne
Average silver               87.2 %       83.8 %       85.6 %       83.6 %
recovery - percent
Silver - ounces         1,556,689   1,233,181   5,364,011   5,299,841 
Gold - ounces               4,564       3,966      17,966      16,607 
Copper - tonnes                49           8         117          66 
                                                                 
Total cash cost per    $      4.67  $      5.45  $      5.05  $      4.80 
ounce ^(1)
Total production cost  $      7.65  $      8.76  $      7.95  $      8.29 
per ounce ^(1)
                                                                 
Payable ounces of       1,551,171   1,229,021   5,345,677   5,278,892 
silver
                                                                 

                                     Three months ended   Nine months ended
                                           December 31,        December 31,
                                       2012      2011       2012   2011
Dolores Mine                                                        
                                                                   
Tonnes processed                   1,508,506         -  4,346,595      -
Average silver grade - grams              46         -         42      -
per tonne
Average gold grade - grams per          0.38         -       0.40      -
tonne
Average silver recovery -               41.4  %       -       45.7 %     -
percent
Average gold recovery - percent         80.2  %       -       78.0 %     -
Silver - ounces                      930,113         -  2,652,851      -
Gold - ounces                         14,698         -     43,476      -
                                                                   
                                                                   
Total cash cost per ounce ^(1)   $       3.78    $     - $      4.05  $    -
Total production cost per ounce  $      10.80    $     - $     16.88  $    -
^(1)
                                                                   
Payable ounces of silver             927,788         -  2,646,219      -
* Production and cost figures represent nine months in Pan American ownership
in 2012.

                      Three months ended        Twelve months ended   
                         December 31,              December 31,       
                        2012         2011        2012        2011 
                                                              
Huaron Mine                                                    
                                                              
Tonnes milled         173,895      166,544     683,483     614,437 
Average silver            163          179         162         177 
grade - grams per
tonne
Average zinc grade       2.46  %       2.67 %       2.54 %       2.46 %
- percent
Average silver           83.4  %       80.4 %       81.7 %       79.1 %
recovery - percent
Silver - ounces       753,373      770,128   2,909,890   2,768,768 
Gold - ounces             185          280         655       1,339 
Zinc - tonnes           2,990        2,947      11,824       9,555 
Lead - tonnes           1,127        1,548       4,727       4,865 
Copper - tonnes           622          355       2,257       1,278 
                                                              
Total cash cost     $    21.81    $    14.84  $     17.51  $     14.03 
per ounce ^(1)
Total production    $    24.74    $    21.01  $     21.02  $     16.89 
cost per ounce
^(1)
                                                              
Payable ounces of     643,351      688,276   2,506,481   2,491,190 
silver
                                                              
                      Three months ended        Twelve months ended   
                         December 31,              December 31,       
                        2012         2011        2012        2011 
Morococha Mine*                                                   
                                                              
Tonnes milled         141,954      122,834     535,086     483,104 
Average silver            141          118         143         128 
grade - grams per
tonne
Average zinc grade       2.69  %       3.31 %       2.83 %       2.74 %
- percent
Average silver           86.9  %       86.1 %       84.9 %       86.1 %
recovery - percent
Silver - ounces       551,760      401,354   2,083,726   1,711,668 
Gold - ounces             694          445       2,840       1,691 
Zinc - tonnes           3,089        3,244      11,925      10,676 
Lead - tonnes             859          641       3,601       3,050 
Copper - tonnes           467          377       1,502       1,522 
                                                              
Total cash cost     $    25.96    $    24.92  $     23.48  $     16.11 
per ounce ^(1)
Total production    $    32.01    $    40.07  $     29.75  $     22.19 
cost per ounce
^(1)
                                                              
Payable ounces of     472,490      349,617   1,776,333   1,520,702 
silver
* Production and cost figures are of Pan American's share only. Pan
American's ownership is 92.2%
                      Three months ended        Twelve months ended   
                         December 31,              December 31,       
                        2012         2011        2012        2011 
                                                              
San Vicente Mine                                               
                                                              
Tonnes milled          79,613       77,760     306,063     282,960 
Average silver            422          368         419         382 
grade - grams per
tonne
Average zinc grade       2.23  %       2.44 %       2.15 %       2.26 %
- percent
Average silver           91.1  %       91.5 %       90.7 %       90.1 %
recovery - percent
Silver - ounces       971,031      842,157   3,726,024   3,130,145 
Zinc - tonnes           1,296        1,501       4,918       4,792 
Copper - tonnes             -          210           -         649 
Lead - tonnes              93            -         432           - 
                                                              
Total cash cost     $    19.84    $    13.35  $     18.92  $     13.48 
per ounce ^(1)
Total production    $    22.86    $    15.67  $     22.05  $     17.14 
cost per ounce
^(1)
                                                              
Payable ounces of     887,816      752,514   3,390,683   2,849,243 
silver
* Production and cost figures are of Pan American's share only. Pan American's
ownership is 95%

                            Three months ended      Twelve months ended    
                               December 31,            December 31,        
                                2012      2011       2012        2011 
                                                                  
Manantial Espejo Mine                                              
                                                                  
Tonnes milled                 187,790   166,567    734,335     697,205 
Average silver grade -            182       167        170         185 
grams per tonne
Average gold grade - grams       2.09      2.27       1.94        2.48 
per tonne
Average silver recovery -        91.9 %    89.3%       89.8 %       90.2 %
percent
Average gold recovery -          95.0 %    94.6%       94.2 %       95.1 %
percent
Silver - ounces             1,034,596   829,553  3,632,550   3,766,504 
Gold - ounces                  11,503    11,114     43,339      52,998 
                                                                  
Total cash cost per ounce  $     13.08  $    7.85 $     14.65  $      7.36 
^(1)
Total production cost per  $     21.41  $   18.34 $     22.73  $     15.89 
ounce ^(1)
                                                                  
Payable ounces of silver    1,032,527   827,894  3,625,285   3,758,971 
                                                                  
                                                                 

(1) Cash costs per payable ounce of silver is a non-GAAP measure. The Company
    believes that, in addition to production costs,
    depreciation and amortization and royalties, cash cost per ounce is a
    useful and complementary benchmark that investors use
    to evaluate the Company's performance and ability to generate cash flow
    and is well understood and widely reported in the
    silver mining industry. However, cash costs per ounce does not have a
    standardized meaning prescribed by IFRS ("International
    Financial Reporting Standards") as an indicator of performance. A
    reconciliation is shown below.

Cash Costs and Total Operating Costs per Ounce of Payable Silver
(Unaudited in thousands of U.S. dollars)
                             Three months ended      Twelve months ended
                                   December 31,            December 31,
                                 2012       2011        2012        2011
Production costs            $   124,389 $    94,818 $    474,001 $    341,363
Add/(Subtract)                                                       
Royalties                        5,693      5,810      35,077      22,031
Smelting,                       18,746     16,076      68,097      64,132
refining, and
transportation
charges
By-product                    (84,652)   (59,437)   (303,035)   (255,820)
credits
Worker's                         (407)      (181)     (1,573)     (5,632)
participation
and voluntary
payments
Change in                       13,758    (4,698)      22,521      30,103
inventories
Other                            1,479      4,993     (2,475)       3,765
Not controlling                (1,968)    (1,268)     (6,914)     (4,099)
interests
Cash Operating             A     77,038     56,113     285,699     195,843
Costs
                                                                    
Add/(Subtract)                                                       
Depreciation and                32,242     23,463     108,153      82,756
amortization
Closure and                        655        896       2,999       3,268
decommissioning
provision
Change in                      (3,857)      4,361       6,273         659
inventories
Other                                -      (240)       (746)       (815)
Not-controlling                  (384)      (541)     (1,504)     (1,334)
interests
Production Costs           B    105,694     84,052     400,874     280,377
                                                                    
Payable Silver             C  6,558,268  5,020,804  23,746,108  20,753,040
Production (oz)
Total Cash costs (A*$1000)/C $     11.75 $     11.18 $      12.03        9.44
per ounce
Total Production (B*$1000)/C $     16.12 $     16.74 $      16.88       13.51
Costs per ounce

Pan American Silver Corp.                                                 
Consolidated Statements of Financial                                       
Position
As at December 31, 2012 and 2011                                        
(Unaudited in thousands of U.S. dollars)
                                            December 31,    December 31,
                                                 2012             2011
Assets                                                                 
Current assets                                                         
Cash                                       $      346,208   $       262,901
Short-term investments                           196,116          228,321
Trade and other receivables                     134,612          103,433
Income taxes receivable                           18,671            2,542
Inventories                                      270,089          135,696
Derivative financial instruments                      25                -
Prepaids and other current assets                  9,546            9,343
                                                975,267          742,236
Non-current assets                                                     
Mineral property, plant and equipment,         2,182,742        1,189,708
net
Long-term refundable tax                           9,937           10,253
Deferred tax assets                                1,450            4,170
Other assets                                       7,291           5,429
Goodwill                                         211,292                -
Total Assets                               $    3,387,979   $     1,951,796
                                                                      
Liabilities                                                            
Current liabilities                                                    
Accounts payable and accrued liabilities   $      136,757   $        78,258
Provisions                                         7,022            2,341
Current portion of finance lease                  12,473           20,841
Current income tax liabilities                    40,346           74,366
                                                196,598          175,806
Non-current liabilities                                                
Provisions                                        45,661           59,052
Deferred tax liabilities                         321,630           54,919
Share purchase warrants                            8,594           23,651
Long-term portion of finance lease                24,377           10,824
Long-term debt                                    41,134                -
Other long-term liabilities                       23,256           25,457
Total Liabilities                                661,250          349,709
                                                                      
Equity                                                                 
Capital and reserves                                                   
Issued capital                                  2,300,517        1,243,241
Share option reserve                              20,560            8,631
Investment revaluation reserve                       964            2,146
Retained earnings                                397,360          339,821
Total Equity attributable to equity            2,719,401        1,593,839
holders of the Company
Non-controlling interests                           7,328           8,248
Total Equity                                    2,726,279        1,602,087
Total Liabilities and Equity                $    3,387,979   $     1,951,796



Pan American                                                        
Silver Corp.
Consolidated
Income Statements
(Unaudited in thousands of U.S. dollars, except for share and per
share amounts)
                    Three months ended     Twelve months ended
                         December 31,           December 31,
                        2012       2011       2012       2011
Revenue            $   247,335 $   212,361 $   928,594 $   855,275
Cost of sales                                             
 Production       (124,389)   (94,818)  (474,001)  (341,363)
   costs
 Depreciation      (32,242)   (23,463)  (108,153)   (82,756)
   and
   amortization
 Royalties          (5,693)    (5,810)   (35,077)   (22,031)
                   (162,324)  (124,091)  (617,231)  (446,150)
Mine operating     $    85,011 $    88,270 $   311,363 $   409,125
earnings
                                                         
General and           (4,638)    (5,068)   (20,790)   (18,291)
administrative
Exploration and      (10,405)    (8,804)   (36,746)   (27,727)
project
development
Impairment charge   (100,009)          -  (100,009)          -
Acquisition costs           -          -   (16,162)          -
Foreign exchange        4,883      2,366      5,577    (8,126)
gains (losses)
Gains (losses) on         279      (272)        421        681
commodity and
foreign currency
contracts
Gain on sale of         1,466        136      9,652      1,190
assets
Other income                -     10,079      5,370     15,728
(Loss) earnings      (23,413)     86,707    158,676    372,580
from continuing
operations
                                                         
Gain on                14,203     30,994     24,159    101,828
derivatives
Investment income       3,032        936      6,178      3,055
Interest and          (3,326)    (1,920)    (7,678)   (6,199)
finance expense
(Loss) earnings       (9,504)    116,717    181,335    471,264
before income
taxes
Income tax expense   (19,907)   (21,250)   (93,822)  (117,118)
Net (loss)         $  (29,411) $    95,467 $    87,513 $   354,146
earnings for the
period
                                                         
Attributable to:                                          
  Equity holders  $  (29,060) $    95,356 $    87,359 $   352,494
   of the Company
  Non-controlling      (351)        111        154      1,652
   interests
                  $  (29,411) $    95,467 $    87,513 $   354,146
Earnings per share                                              
attributable to
common
shareholders
Basic earnings per $    (0.19) $      0.89       0.62       3.31
share
Diluted earnings   $    (0.24) $      0.89       0.55       3.31
per share
Weighted average      152,332    106,563    140,883    106,434
shares outstanding
(in 000's) Basic
Weighted average      154,259    106,679    142,442    106,598
shares outstanding
(in 000's) Diluted
                                                                    
Consolidated Statements of Comprehensive Income
(unaudited in                                                               
thousands of U.S.
dollars)
                    Three months ended      Twelve months ended
                        December 31,             December 31,
                        2012       2011       2012       2011
Net (loss)         $  (29,411) $    95,467 $    87,513 $   354,146
earnings for the
period
                                                         
Unrealized net          1,298      (196)      2,452    (3,979)
gains (loss) on
available for sale
securities
(net of zero
dollars tax)
Reclassification      (2,570)      (386)    (3,634)    (1,573)
adjustment for net
loss included in
earnings
Total              $  (30,683) $    94,885 $    86,331 $   348,594
comprehensive
(loss) income for
the period
                                                         
Total                                                     
comprehensive
(loss) income
attributable to:
Equity holders of  $  (30,332) $    94,774 $    86,177 $   346,942
the Company
Non-controlling         (351)        111        154      1,652
interests
                  $  (30,683) $    94,885 $    86,331 $   348,594

Pan American Silver Corp.                                                 
Consolidated Statements of Cash                                            
Flows
(Unaudited in thousands of U.S.                                            
dollars)
                                 Three months ended    Twelve months ended
                                    December 31,          December 31,
                                     2012      2011       2012       2011
Cash flow from operating                                              
activities
Net (loss) earnings for the     $  (29,411) $   95,467 $    87,513 $   354,146
year
                                                                     
Current income tax expense          34,270    22,521     93,689    109,347
Deferred income tax (recovery)    (14,363)   (1,271)        133      7,771
expense
Depreciation and amortization       32,242    23,463    108,153     82,756
Impairment charge                  100,009         -    100,009          -
Accretion on closure and               655       897      2,999      3,268
decommissioning provision
Unrealized (gains) losses on         (584)   (9,627)      6,124    (1,071)
foreign exchange
Stock-based compensation             (574)       430      4,142      3,502
expense
Unrealized (gains) losses on          (34)       929       (25)          -
commodity contracts
Gain on derivatives               (14,203)  (30,994)   (24,159)  (101,828)
Gain on sale of assets             (1,466)     (136)    (9,652)    (1,190)
Changes in non-cash operating      (4,473)     8,482   (22,224)   (39,435)
working capital
Operating cash flows before        102,068   110,161    346,702    417,266
interest and income taxes
                                                                     
Interest paid                      (1,890)     (233)    (3,639)      (557)
Interest received                      591       545      2,575      1,482
Income taxes paid                 (19,166)   (5,506)  (152,333)   (58,736)
Net cash generated from             81,603   104,967    193,305    359,455
operating activities
                                                                     
Cash flow from investing                                              
activities
Payments for mineral property,    (65,269)  (38,788)  (159,915)  (118,933)
plant and equipment
(Purchase) maturity of short      (77,083)  (36,583)     30,383   (51,071)
term investments
Acquisition of Minefinders, net          -         -     86,528          -
of cash acquired
Proceeds from sale of mineral          410       152      1,692      1,297
property, plant and equipment
Net refundable tax and other         1,072     3,859      1,989    (3,915)
asset expenditures
Net cash used in investing       (140,870)  (71,360)   (39,323)  (172,622)
activities
                                                                     
Cash flow from financing                                              
activities
Proceeds from issue of equity          514     1,047      3,195      4,453
shares
Shares repurchased and            (10,719)  (66,093)   (41,749)   (94,034)
cancelled
Dividends paid                     (7,618)   (2,639)   (24,919)   (10,732)
Payments of construction and       (1,745)   (3,102)    (6,213)    (4,646)
equipment leases
Net (distributions                   (530)     (357)    (1,074)        904
to)/contributions from
non-controlling interests
Net cash used in financing        (20,098)  (71,144)   (70,760)  (104,055)
activities
Effects of exchange rate             (828)       950         85        202
changes on cash
Net (decrease) increase in cash   (80,193)  (36,587)     83,307     82,980
Cash at the beginning of the       426,401   299,488    262,901    179,921
period
Cash at the end of the period   $   346,208 $  262,901 $   346,208 $   262,901
                                                                     
Supplemental Cash Flow                                                
Information
Significant Non-Cash Items                                            
Fair value of shares issued as  $         - $        - $ 1,088,104 $         -
part of Minefinders acquisition
Replacement options issued as   $         - $        - $    10,739 $         -
part of Minefinders acquisition
Post acquisition -              $         - $        - $       699 $         -
expenditures associated with
the replacement options
Fair value adjustment of        $         - $    1,972 $         - $     2,411
warrants exercised
Advances received for           $     4,021 $    9,462 $    11,538 $    26,757
construction and equipment
leases
Stock compensation issued to    $       929 $    1,265 $     1,060 $     1,329
employees and directors





SOURCE Pan American Silver Corp.

Contact:

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