TORONTO (miningweekly.com) - Vancouver-based Pan American Silver has positioned itself for "explosive growth" over the next two or three years, and could double production levels by 2013, CEO Geoff Burns said on Tuesday.
Pan American has eight operating mines, in Mexico, Peru, Argentina and Bolivia, and is studying two large development projects, for which it aims to have completed feasibility studies by the end of this year.
At the La Preciosa silver project, in Mexico's Durango State, the company expects to finish an internal scoping study around mid-year, which will be followed by a completed feasibility study before the end of 2010, Burns told analysts and investors on a conference call.
Pan American has agreed to fund the construction of the project, which is owned in a joint venture with Orko Silver, in exchange for a 55% interest in the asset.
It expects to spend about $9-million this year on exploration and delineation drilling, metallurgical testing and engineering, culminating in the completion of the feasibility study at La Preciosa.
Secondly, the company also plans to make progress on getting its Navidad silver project, in Argentina, to the point where a construction decision can be made.
Pan American bought Navidad when it acquired junior Aquiline Resources in January, and expects to complete a feasibility study either later this year or early in 2011, Burns said.
The firm will spend around $16,5-million in continued exploration and project development on Navidad this year, including a prefeasibility or scoping study to be completed around mid-year.
Pan American has started holding talks with government officials in the province of Chubut, where the project is located, regarding the provincial ban on openpit mining.
"I can tell you that we have already started working with the government to address this issue," Burns said.
He also pointed out that, while the law in Chubut contains language banning openpit mining throughout the province, it also contains language that allows for the designation of 'zones' where openpit mining will be allowed.
"It continues to be our firm expectation that the province will make use of this provision and designate the area around Navidad as one of those zones where opencut mining will be allowed," Burns said.
He is hoping to have some good news in this regard "sometime in the middle of this year".
Pan American Silver, which released fourth-quarter results on Monday, produced 23-million ounces of silver and 100 704 oz of gold in 2009.
Silver production is expected to increase slightly, to 23,4-million ounces this year.
Pan American also declared its first-ever cash dividend on Monday. The firm will pay a semi-annual dividend of $0,025 per common share.
Edited by: Liezel Hill
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