Pan American Silver to Expand its La Colorada mine

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[{"type":"text","content":"\n\n\n(All Amounts Expressed in US$ Unless Otherwise Stated)\n\n\nVANCOUVER, Dec. 18, 2013 /CNW/ - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAA) (\"Pan American\" or the \"Company\") has decided to proceed with the\n expansion of its La Colorada mine in Zacatecas, Mexico, based on the\n positive results of a recently completed Preliminary Economic\n Assessment (the \"PEA\" or the \"Assessment\").  The PEA demonstrates that\n the relatively low-risk expansion project has the potential to provide\n robust after-tax economic returns using a $19 per ounce long-term\n silver price. The PEA contemplates an increase in silver production\n from the current level of approximately 4.7 million ounces per year to\n 7.7 million ounces per year by the end of 2017, for an incremental\n capital investment of $80 million, the majority of which will be spent\n over the next 3 years.\n\n\nPEA Project Highlights*\n\n\n\n\n\n\n64% increase in estimated annual silver production from current 4.7\n million ounces forecast for 2013, to 7.7 million ounces in 2018 when\n the full expansion Project is completed\n\n\n39% reduction in estimated cash costs from $10.00 forecast for 2013, to\n $6.10 per ounce of silver, net of by-product credits in 2018\n\n\nIncrease mining and processing rates from current 1,250 tpd to an\n estimated 1,500 tpd by mid-2016 and to 1,800 tpd by the end of 2017\n\n\nInstallation of a new 600-metre deep shaft and hoist between the\n Candelaria and Estrella mining zones\n\n\nExpansion and upgrade of the current sulphide processing plant\n\n\nAn estimated minimum project mine life of 10 years at increased\n capacity, based on mid-year 2013 reserves and resources estimate\n\n\nIncremental expansion capital estimated to be $80 million, the majority\n of which will be spent over the next 3 years\n\n\nAssuming a $19/oz silver price, the estimated after-tax net present\n value (NPV**) of the incremental cash flow at a 10% discount is $38.6\n million, with an internal rate of return (IRR) estimated at 22% and a\n capital payback period of 2.5 years. At a $25/oz silver price, the\n estimated 10% NPV increases to $71.7 million, the estimated IRR jumps\n to 32% and the payback period is reduced to 2.0 years\n\n\nAdditional exploration success at La Colorada could meaningfully\n increase the economic potential of an expanded operati...

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