Pan American Silver Shifts Assets to Canadian Dollars

Pan American Silver Corp., the world’s fourth-largest silver producer, said it’s shifting its currency holdings into Canadian dollars, betting the U.S. dollar may fall further.

The world’s reserve currencies are struggling to maintain their value amid “ridiculous” debt levels, Chief Executive Officer Geoffrey Burns said today on a conference call with analysts. Gold and silver look “extremely appealing” as alternative long-term investments, he said.

“We diversified some of our currency holdings into Canadian dollars away from U.S. dollars to provide more stability in the event we do see continued weakness in the U.S. dollar,” Burns said. “It’s not just the U.S. dollar -- the euro, the Japanese yen are going to have extreme difficulty hanging onto their long-term values as a commodity of trade.”

The dollar fell against most of its major counterparts today, while gold rose to the highest price in almost five weeks on speculation that the accelerating pace of inflation will boost demand for the precious metal as an investment hedge. Wholesale prices rose for a seventh straight month in the U.S., led by higher prices for fuel.

Gold futures for April delivery rose $1, or 0.1 percent, to settle at $1,375.10 an ounce at 1:34 p.m. on the Comex in New York. Silver futures for March delivery fell 6.7 cents, or 0.2 percent, to $30.629 an ounce.

Vancouver-based Pan American expects Argentina’s Chubut province to overturn a ban on open-pit mining after local elections in March, allowing the company to develop its Navidad silver deposit, Burns said. The company’s silver output will fall to 23 million ounces this year from 24 million ounces in 2010, he said. Industria Penoles SA, BHP Billiton Ltd. and KGMH Polska Miedz SA are the world’s largest silver producers.

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

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.