(All amounts in US dollars unless otherwise stated)
VANCOUVER, Sept. 10, 2013 /CNW/ - Pan American Silver Corp. (PAAS: NASDAQ; PAA: TSX) ("Pan American" or the "Company") has decided to close out its
outstanding silver and gold hedges.
The Company previously announced that it had entered into forward
contracts for 5.3 million ounces of silver and 24,000 ounces of gold,
at average prices of $20.43 per ounce of silver and $1,323 per ounce of
gold, spread relatively equally over a period of 12 months. The amount
of silver and gold under contract represented approximately 20% and 18%
of the Company's forecasted 12-month silver and gold production,
respectively.
Through accelerated physical metal delivery and straight repurchase, Pan
American now intends to close all of these forward contracts before the
end of the current year.
President and CEO, Geoff Burns commented on the Company's decision; "We
decided to put the hedges in place as a short term tactical response,
to reduce risk during a time of extreme price volatility. However, our
action may have inadvertently sent the wrong message to the market and
to our shareholders about our hedging philosophy and our view of the
long term prospects for silver and gold." Burns continued, "We have
become more comfortable that we will realize the benefits of our cost
reduction initiatives and are considerably more optimistic about the
short term prospects for both silver and gold, therefore negating the
conditions that initially lead us to enter into the hedges. More
importantly, we need to unequivocally reassure our shareholders that
the Company's fundamental philosophy is still that of not hedging our
precious metal production, thereby providing maximum exposure to the
price of silver."
About Pan American
Pan American's vision 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. Pan American also owns several
development projects in USA, Mexico, Peru and Argentina.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This NEWS RELEASE contains "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 securities legislation. All statements, other than
statements of historical fact, are forward-looking statements.
Statements containing forward-looking information express, as at the
date of this NEWS RELEASE, the Company's plans, estimates, forecasts,
projections, expectations, or beliefs as to future events or results.
SUCH forward-looking statements AND information include, but are not
limited to statements as to any future hedging of precious metals; the
benefits of hedging or non-hedging and the successful closing out of
its hedging positions and the financial impact of doing so.
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 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 and 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; 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; business opportunities that may be
presented to, or pursued by, the Company; 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 40F 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.
SOURCE Pan American Silver Corp.
