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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
DATED FEBRUARY 20, 2003
Commission File Number 000-13727
PAN AMERICAN SILVER CORP.
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(Registrant's name)
SUITE 1500, 625 HOWE STREET
VANCOUVER, BRITISH COLUMBIA, CANADA V6C 2T6
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F [ ] Form 40-F [X]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): [ ]
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101 (b)(7): [ ]
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws of the
jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-________
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant, Pan American Silver Corp., has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: February 20, 2003
PAN AMERICAN SILVER CORP.
By:
/s/ Ross Beaty
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Ross Beaty
Chairman and C.E.O.
[PAN AMERICAN SILVER CORP. LOGO]
NEWS RELEASE
February 20, 2003
PAN AMERICAN SILVER CORP. -- 2002 YEAR END OPERATIONS UPDATE
Vancouver, British Columbia...Pan American Silver Corp's (Nasdaq - PAAS; TSX -
PAA) silver production reached a record level in 2002. Pan American now operates
four wholly owned primary silver mines that produced a total of 7.8 million
ounces of silver in 2002, up 12 percent from that of 2001. Total cash costs for
consolidated production were $4.16 per ounce of silver in 2002, compared with
$4.36 in 2001. Pan American also produced a record amount of by-product metals
in 2002, including 39,081 tonnes of zinc and 20,790 tonnes of lead. Silver
production for 2003 is forecast to rise to 10.3 million ounces.
The best producer of Pan American's operations in 2002 was the Huaron mine in
Peru, which Pan American opened in mid-2001. Huaron yielded 4.5 million ounces
of silver at a total cash cost of $3.66 per ounce, net of by-product credits.
By-product credits were depressed because of the record low zinc price during
2002 (35 cents per pound). The mine turned in an outstanding performance in
2002, due in part to a wide zone of mineralization discovered early in the year.
At year-end, mill throughput was increased by about 10 percent and silver
production for 2003 is forecast to increase to 4.9 million ounces.
The Company's Quiruvilca mine in Peru continues to struggle against low metal
prices, especially since the veins being mined become more zinc-rich with depth.
Silver production in 2002 was scaled back further to 2.5 million ounces at a
total cash cost of $5.15 per ounce of silver, net of by-product credits. The
Company continues to review available options to reduce the mine's continuing
losses, including closure. To offset the negative impact of continued low zinc
prices, the Company has hedged approximately one half of its projected 2003 zinc
production from Quiruvilca by selling forward approximately 9,000 tonnes of zinc
at an average price of 38 cents per pound. The carrying value of Quiruvilca was
written down by $15.13 million in the third quarter, and a reclamation accrual
will be taken in the fourth quarter. On a positive note, Pan American's two gold
assets adjacent to Quiruvilca are under active exploration by Barrick Gold
following Barrick's announcement of a 7.6 million ounce gold discovery at the
nearby Alto Chicama property.
In November, Pan American acquired a small but profitable silver operation in
central Peru and estimates annual production of about 0.54 million ounces
annually at an average total cash cost of about $1.65 per ounce over a 10-year
period. In 2002, this operation produced 101,459 ounces of silver at a cash cost
of $1.50 per ounce.
In Mexico, the La Colorada mine continued to operate at a small scale, producing
626,035 ounces of silver. A major mine expansion began in July, which will
increase production to an average of 3.8 million ounces annually at an estimated
total cash cost of $2.65 when it is completed in July 2003. La Colorada is
expected to be Pan American's most profitable and
1500-625 HOWE STREET, VANCOUVER, BC CANADA V6C 2T6
TEL 604.684.1175 FAX 604.684.0147
www.panamericansilver.com
purest silver mine, with over 90 percent of its value derived from silver
sales. Construction to date is on schedule and within its $20 million budget.
Remaining costs will be largely funded from a $10 million loan from the
International Finance Corporation, a member of the World Bank Group.
Pan American advanced three development projects during 2002. In June, the
Company agreed to acquire Corner Bay Silver via a share exchange, and this is
scheduled to close on February 20. Corner Bay's main asset is the 100 million
ounce Alamo Dorado silver property in Mexico. Alamo Dorado is nearly ready for
development as a new open pit silver mine capable of producing about 6 million
ounces of silver per year over an 8 year mine life at an estimated total cash
cost of $3.25 per ounce.
In Bolivia, Pan American's San Vicente project produced about 1.1 million ounces
of silver under a short-term toll-milling agreement with a Bolivian company. Pan
American is considering advancing the property towards a feasibility study later
in 2003. In Russia, the Dukat mine reportedly began producing in December, but
no silver sales have yet been made and operations information is not yet
available. Finally, in Argentina, Pan American's 50 percent owned Manantial
Espejo project returned excellent high grade silver-gold results in a further
6,000-meter drilling program targeted on the wide veins on the property. Plans
for 2003 are to progress the property towards a feasibility study through
underground development and additional drilling.
Pan American's Chairman and CEO Ross Beaty, said "Our focus in 2002 was on
building our silver production base so we can fully deliver to our shareholders
superior leverage to higher silver prices, both in terms of capital assets and
immediate revenue. We fully delivered on this objective and we also set the
stage for tremendous further growth in the near future. I really look forward to
continuing these efforts in 2003, with our outstanding pipeline of primary
silver development projects."
Pan American will announce its financial results for the year on March 10 and
will discuss them in a conference call to be held on March 11. Details of the
conference call will be announced in late February.
- End -
Ross J. Beaty, Chairman and C.E.O. or Rosie Moore, VP Corporate Relations
604-684-1175
CAUTIONARY NOTE
Some of the statements in this news release are forward-looking statements, such
as estimates of future production levels, expectations regarding mine production
costs, expected trends in mineral prices and statements that describe Pan
American's future plans, objectives or goals. Actual results and developments
may differ materially from those contemplated by these statements depending on
such factors as changes in general economic conditions and financial markets,
changes in prices for silver and other metals, technological and operational
hazards in Pan American's mining and mine development activities, uncertainties
inherent in the calculation of mineral reserves, mineral resources and metal
recoveries, the timing and availability of financing, governmental and other
approvals, political unrest or instability in countries where Pan American is
active, labor relations and other risk factors listed from time to time in Pan
American's Form 40-F.