VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan.
23, 2012) -
(All amounts in Canadian dollars unless otherwise stated)
Pan American Silver Corp.
(TSX:PAA)(NASDAQ:PAAS) ("Pan
American") and Minefinders Corporation Ltd.
(TSX:MFL)(NYSE Amex:MFN)
("Minefinders") are pleased to announce that they have entered into a
definitive agreement (the "Arrangement Agreement") pursuant to which Pan
American will acquire all of the issued and outstanding common shares
of Minefinders by way of a plan of arrangement.
Under the terms of the
Arrangement Agreement, Minefinders shareholders will be entitled to
elect to receive, in exchange for each Minefinders share held, either:
(i) 0.55 shares of Pan American and $1.84 in cash; or (ii) 0.6235 shares
of Pan American; or (iii) $15.60 in cash, subject to pro-ration under
total aggregate cash and share pools of approximately $176 million and
approximately 53 million Pan American shares, respectively, on a
fully-diluted basis.
Assuming full pro-ration, Minefinders shareholders
will receive 0.55 shares of Pan American and $1.84 in cash in exchange
for each Minefinders share held.
The consideration represents a total offer value of $15.60
per Minefinders share, based on the January 20, 2012 closing price of
Pan American common shares on the Toronto Stock Exchange and a premium
of 36% to the January 20, 2012 closing price of Minefinders shares on
the Toronto Stock Exchange (33% premium based on the respective volume
weighted average prices of Pan American and Minefinders on the Toronto
Stock Exchange for the 20 trading days ending January 20, 2012).
The
proposed transaction implies a total transaction value of approximately
$1.5 billion.
Upon completion of the transaction, existing Minefinders
shareholders will own approximately 33% of Pan American on a
fully-diluted basis.
Transaction Highlights
- Creates the leading growth-oriented,
geographically-diversified silver producer with combined market
capitalization of approximately $4 billion: The combined
company will be one of the largest diversified silver mining companies
by market capitalization, providing enhanced capital markets scale and
profile and increased strategic flexibility.
- Exceptional growth profile with expected silver production to double by 2015:
The combined company will have a leading and well sequenced growth
profile combining immediate access to near-term cash flow with
significant future growth opportunities.
Combined production for the
year ended 2011 of approximately 26 million ounces of silver (based on
Pan American 2011 guidance and Minefinders disclosed 2011 results),
expected to reach over 50 million ounces by the year 2015.
Minefinders
Dolores property provides a number of attractive near-term opportunities
to drive production growth prior to the expected commencement of
production at Pan Americans Navidad project.
- Enhanced portfolio diversification and project pipeline:
The combined company will consist of 8 operating mines and an extensive
portfolio of development and exploration projects in jurisdictions
throughout the Americas where Pan American currently operates.
Based on
expected silver production in 2011, approximately 52% of combined
production will be from mines in Mexico, 21% from Peru, 15% from
Argentina and 12% from Bolivia.
- Significant silver Mineral Reserves and Mineral Resources:
The combined company will have a significant Mineral Reserve base
consisting of 350 million ounces of Proven and Probable silver Mineral
Reserves and 3.0 million ounces of Proven and Probable gold Mineral
Reserves - with additional Measured and Indicated Mineral Resources of
742 million ounces of silver and 2.0 million ounces of gold and Inferred
Mineral Resources of 265 million ounces of silver and 1.4 million
ounces of gold, as of the end of December 20101.
- Strong balance sheet and access to capital:
The additional cash flow from Minefinders Dolores property will
solidify Pan Americans ability to fund its industry-leading growth
profile without equity dilution while maintaining its existing dividend.
The pro forma company will have a cash balance of approximately US$5702 million,
undrawn credit facilities in the amount of US$150 million, substantial
cash flow generating capacity and negligible debt.
In addition, Pan
American shares will remain one of the worlds most liquid silver
investments with listings on both the TSX and NASDAQ and with one of the
largest public market floats of primary silver producers.
- Attractive re-rating opportunity:
The valuation of the combined company will be well positioned to benefit
from enhanced scale, diversification and growth profile as well as
strong transaction rationale.
Geoff Burns, President and CEO of Pan American, commented,
"Given the location of Minefinders assets, we believe this acquisition
is logical and consistent with Pan Americans vision to become the
largest, low-cost primary producer of silver in the world.
Silver
production from Minefinders Dolores mine has increased almost 200% over
the last year and we expect to see further increases into the future.
As a producing, long-life, low-cost mine, Dolores will not only add to
Pan Americans production, but will help balance our entire portfolio of
producing and development assets." Mr.
Burns continued, "Minefinders
also has significant expansion potential and exceptional exploration
opportunities at Dolores and a number of other promising early stage
properties.
The combined company will be in an excellent position to see
those assets reach their ultimate potential.
Once the transaction is
complete, we will focus our combined team on the exciting longer-term
expansion opportunities at Dolores.
We also look forward to continuing
to build on the positive relationship that Minefinders has established
with the local communities, ejidos and its own workers, at and around
the Dolores mine."
Mark Bailey, President and CEO of Minefinders, added, "Since
drilling the discovery hole on the Dolores deposit in 1996, we have
successfully advanced the project through exploration, permitting, and
construction into a low-cost gold and silver producer.
The proposed
combination with Pan American represents an exciting next step for our
shareholders as they gain exposure to a diverse portfolio of world class
producing and development assets along with the substantial resources
and expertise that a larger company possesses.
Moreover, we believe that
the addition of the Dolores deposit along with a strong portfolio of
exploration and development projects and a dedicated team of employees
provides a significant contribution to the future growth and success of
Pan American".
Benefits to Pan American Shareholders
- Clearly establishes Pan Americans position as the leading geographically-diversified primary silver mining company
- Enhances Pan Americans growth profile with the
addition of near-term production, combined with significant development
and exploration opportunities, including a potential mill expansion at
Dolores
- Meaningfully reduces Pan Americans silver cash costs through the addition of low-cost production from Dolores
- Strengthens ability to finance organic growth using
internally generated funds while maintaining Pan Americans existing
dividend
- Increases production from Mexico, a mining-friendly jurisdiction where Pan American already has extensive operations
- Logical combination with potential for meaningful synergies
- Adds a strong team of experienced mining professionals currently operating the Dolores mine
Benefits to Minefinders Shareholders
- Immediate and significant premium
- Exposure to a diverse portfolio of producing and development assets
- Ability to participate in the success of the combined company
- Enhanced growth profile and exposure to the upside associated with successful permitting and development of Navidad
- Expansion of current Mexican and Latin American
management expertise that includes a proven track record of successful
mill expansions and underground development
- Dividends, greater liquidity and increased market profile
Summary of the Transaction
The proposed transaction will be carried out by way of a plan of arrangement under the Ontario Business Corporations Act,
whereby Pan American will acquire all of the issued and outstanding
common shares of Minefinders.
Minefinders shareholders will be entitled
to elect to receive, in exchange for each Minefinders share held,
either: (i) 0.55 shares of Pan American and $1.84 in cash; or (ii)
0.6235 shares of Pan American; or (iii) $15.60 in cash, subject to
pro-ration under total aggregate cash and share pools of approximately
$176 million and approximately 53 million Pan American shares,
respectively, on a fully-diluted basis.
Assuming full pro-ration,
Minefinders shareholders will receive 0.55 shares of Pan American and
$1.84 in cash, in exchange for each Minefinders share held.
Each
outstanding option of Minefinders shall be exchanged for an option of
Pan American that will entitle the holder to receive, upon the exercise
thereof, 0.6235 of a Pan American share at an exercise price equal to
the exercise price of the exchanged Minefinders option divided by 0.6235
(subject to rounding).
The proposed transaction is subject to certain customary
conditions, including court approval, the approval of not less than (i)
66-2/3% of the votes cast by Minefinders shareholders voting as a single
class, and (ii) 66-2/3% of the votes cast by Minefinders shareholders
and Minefinders option holders, voting together as a single class at a
special meeting of Minefinders security holders that is expected to be
held in March 2012, and not less than a majority of the votes cast at a
special meeting of Pan American shareholders that is expected to be held
on the same date.
Pursuant to the Arrangement Agreement, the proposed
transaction is also subject to applicable stock exchange and regulatory
approvals and the satisfaction of certain closing conditions customary
for transactions of this nature.
The Arrangement Agreement also provides
for, among other things, customary reciprocal board support and
non-solicitation covenants (subject to "fiduciary out" provisions that
entitle either party to consider and accept a superior proposal and a
5-business day "right to match" in favour of Pan American in the event
of a superior proposal for Minefinders).
The Arrangement Agreement also
provides for reciprocal termination payments of $42 million and
reciprocal expense reimbursement payments of $5 million in certain
specified circumstances.
The boards of directors of Pan American and Minefinders have
each unanimously determined that the proposed transaction is fair and
in the best interest of their respective companies and recommend that
their respective security holders vote in favour of the proposed
transaction.
CIBC World Markets, exclusive financial advisor to Pan
American, and Scotia Capital, independent fairness opinion provider to
the board of directors of Pan American, have each provided an opinion to
the effect that the consideration offered to Minefinders shareholders
is fair, from a financial point of view, to Pan American.
BMO Capital
Markets, exclusive financial advisor to Minefinders and its board of
directors, has provided an opinion to the effect that the consideration
to be received by Minefinders shareholders is fair, from a financial
point of view, to Minefinders shareholders.
Minefinders directors and senior management, representing,
in aggregate, approximately 3.5% of Minefinders fully diluted shares
outstanding, have entered into customary voting support agreements
pursuant to which, among other things, they have agreed to vote their
Minefinders shares in favour of the proposed transaction.
If approved by security holders of Minefinders and
shareholders of Pan American, the proposed transaction is expected to be
completed by the end of March 2012.
The terms and conditions for the proposed transaction will
be summarized in the Management Information Circulars to be mailed to
Minefinders and Pan American securityholders, respectively, in February
2012.
Copies of the Arrangement Agreement, the Management Information
Circulars, and certain related documents and agreements will be filed
with Canadian and U.S.
securities regulators and will be available at
the SEDAR website at www.sedar.com under Pan Americans and Minefinders profiles, as applicable.
Pursuant to the indenture for Minefinders 4.5% convertible
senior notes due in 2015, Pan American will make an offer to purchase
the convertible notes at face value (including accrued and unpaid
interest) within 30 days of the effective closing date of the
Arrangement.
Advisors and Counsel
Pan Americans exclusive financial advisor is CIBC World
Markets Inc., and its legal counsel are Borden Ladner Gervais LLP and
Skadden, Arps, Slate, Meagher & Flom LLP.
Scotia Capital Inc.
provided a fairness opinion to the Board of Directors of Pan American in
connection with the Arrangement Agreement.
Minefinders exclusive
financial advisor is BMO Capital Markets and its legal advisors are
Stikeman Elliott LLP and Dorsey & Whitney LLP.
Kingsdale Shareholder Services Inc.
("Kingsdale") has been
retained by Pan American to act as Proxy Solicitation and Information
Agent in connection with the proposed transaction.
Pan American and
Minefinders shareholders with questions about the proposed transaction
may contact Kingsdale toll-free at 1-877-657-5859.
Outside of North
America, please dial 416-867-2272, or email .
Conference Call
Pan American and Minefinders will host a joint conference
call and webcast on January 23, 2012 at 11:00 am ET (8:00 am PT) to
discuss this announcement.
The conference call can be accessed by
dialing toll free 1-800-319-4610 (Canada & USA) or by dialing
1-604-638-5340 from outside North America.
A live webcast of the
conference and the presentation will be accessible at https://services.choruscall.com/links/pan120123.html and on Pan Americans website at www.panamericansilver.com and on Minefinders website at www.minefinders.com.
The call will be available for replay for one week after the
conference by dialing 1-604-638-9010 and entering code 6218 followed by
the # sign.
About Pan American
Pan Americans mission is to be the worlds largest low-cost
primary silver mining company by increasing its low-cost silver
production and silver reserves.
It has seven operating mines in Mexico,
Peru, Argentina and Bolivia.
Pan American also owns the Navidad project
in Chubut, Argentina, and is the operator of the La Preciosa project in
Durango, Mexico.
About Minefinders
Minefinders is a precious metals mining and exploration
company and operates the multi-million ounce Dolores gold and silver
mine in Mexico.
For more information, please visit our website at www.minefinders.com.
Footnotes
(1) Mineral Reserves and Resources:
Pan American Mineral Reserves and Resources
Minefinders Mineral Reserves and Resources
(2) Pro Forma cash balance based on Cash and Cash Equivalent
balances as of September 30, 2011, adjusted for the cash component of
the offer, the settlement of Minefinders convertible senior notes due
2011 and the expiration of Minefinders share purchase warrants on
December 31, 2011.
Excludes transaction expenses.
Additional Information Regarding Mineral Reserves and Mineral Resources
Michael Steinmann, P.Geo.
Executive Vice President, Geology
and Exploration of Pan American and Martin Wafforn, P.
Eng., Vice
President, Technical Services of Pan American, and Mark Bailey,
President and CEO of Minefinders, are the "qualified persons" within the
meaning of National Instrument 43-101 - Standards of Disclosure for
Mineral Projects ("NI 43-101") adopted by Canadian Securities
Administrators, who supervised the preparation of the scientific and
technical information of Pan American and Minefinders, respectively,
included in this press release.
Incremental additions to Pan Americans
Mineral Resources expected to result from a successful combination with
Minefinders are based solely on scientific and technical information
provided by Minefinders and neither Pan American nor Messrs.
Steinmann
or Wafforn accept any responsibility in respect of technical information
of Minefinders contained in this press release.
For more information on
Pan Americans projects, readers should refer to Pan Americans Annual
Information Form for the year ended December 31, 2010, dated March 31,
2011 and the technical reports referenced therein and Pan Americans
Annual Report for the year ended December 31, 2010, each of which is
available on SEDAR at www.sedar.com.
For more information on Minefinders projects, readers should refer to
Minefinders Annual Information Form for the year ended December 31,
2010, dated February 24, 2011 and the technical reports therein and
Minefinders Annual Report for the year ended December 31, 2010, each of
which is available on SEDAR at www.sedar.com.
Cautionary Note Regarding Mineral Reserve and Mineral Resource Estimates
Pan American and Minefinders are required to describe Mineral
Resources associated with their properties utilizing Canadian Institute
of Mining, Metallurgy and Petroleum ("CIM") definitions of "Measured",
"Indicated" and "Inferred", which are Mineral Resource confidence
categories recognized by Canadian regulations but not recognized by the
United States Securities Exchange Commission (the "SEC").
The CIM
definitions of Proven and Probable Mineral Reserves used in NI 43-101
differ from the definitions in the SEC Industry Guide 7.
In addition,
the terms "Mineral Resource", "Measured Mineral Resource", "Indicated
Mineral Resource" and "Inferred Mineral Resource" are defined in and are
required to be disclosed by NI 43-101; however, these terms are not
defined terms under SEC Industry Guide 7 and normally are not permitted
to be used in reports filed with the SEC.
Investors are cautioned not to
assume that any part or all of mineral deposits in these categories
will ever be converted into Mineral Reserves.
"Inferred Mineral
Resources" have a great amount of uncertainty as to their existence and
as to their economic and legal feasibility.
It cannot be assumed that
all or any part of an Inferred Mineral Resource will ever be upgraded to
a higher category.
Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or pre-feasibility
studies, except in rare cases.
Disclosure of "contained ounces" in a
Mineral Resource is permitted disclosure under Canadian regulations.
However, the SEC normally only permits issuers to report mineralization
that does not constitute "Reserves" by SEC standards as in place tonnage
and grade, without reference to unit measures.
The requirements of NI
43-101 for identification of "Reserves" are also not the same as those
of the SEC, and Mineral Reserves reported by the Company in compliance
with NI 43-101 may not qualify as "Reserves" under SEC standards.
Accordingly, information contained in this release containing
descriptions of mineral deposits may not be comparable to similar
information made public by U.S.
companies subject to the reporting and
disclosure requirements under the United States federal securities laws
and the rules and regulations thereunder.
Additional Information About the Transaction and Where to Find It
In connection with the proposed transaction, Pan American and
Minefinders will file relevant materials with the SEC, including
information circulars.
Investors and securityholders are urged to read
these documents (if and when they become available) and any other
relevant documents filed by Pan American and Minefinders with the SEC,
as well as any amendments or supplements to these documents because they
will contain important information.
Investors and securityholders may
obtain these documents free of charge at the SECs website at www.sec.gov.
In addition, the documents filed with the SEC by Pan American and
Minefinders may be obtained free of charge by directing such request to:
Kingsdale Shareholder Services at 1-877-657-5859.
Outside of North
America, please dial 416-867-2272, or email or from Pan Americans website at www.panamericansilver.com or from Minefinders website at www.minefinders.com.
Such documents are not currently available.
Investors and
securityholders are urged to read the information circulars and the
other relevant materials when they become available before making any
investment decision with respect to the proposed transaction.
Securityholders who have questions about the Transaction can also
contact Kingsdale.
Kingsdale has been retained by Pan American to act as
Information Agent for the Transaction.
This communication shall not constitute an offer to sell or
the solicitation of an offer to buy, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN OF THE STATEMENTS AND INFORMATION IN THIS NEWS
RELEASE CONSTITUTE "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
PROVINCIAL SECURITIES LAWS.
ALL STATEMENTS, OTHER THAN STATEMENTS OF
HISTORICAL FACT, ARE FORWARD-LOOKING STATEMENTS.
WHEN USED IN THIS NEWS
RELEASE, THE WORDS, "MAY" "BELIEVE", "EXPECT", "INTEND", "PLANS",
"FORECAST", "CHANGES", "FUTURE", "POTENTIAL", "ANTICIPATED",
"ESTIMATED", AND OTHER SIMILAR WORDS AND EXPRESSIONS, IDENTIFY
FORWARD-LOOKING STATEMENTS OR INFORMATION.
THESE FORWARD-LOOKING
STATEMENTS OR INFORMATION RELATE TO, AMONG OTHER THINGS: FUTURE
PRODUCTION OF SILVER, GOLD AND OTHER METALS; FUTURE CASH COSTS PER OUNCE
OF SILVER; THE PRICE OF SILVER AND OTHER METALS; THE EFFECTS OF LAWS,
REGULATIONS AND GOVERNMENT POLICIES AFFECTING THE COMPANIES OPERATIONS
OR POTENTIAL FUTURE OPERATIONS, INCLUDING BUT NOT LIMITED TO, LAWS IN
THE PROVINCE OF CHUBUT, ARGENTINA, WHICH CURRENTLY HAVE SIGNIFICANT
RESTRICTIONS ON MINING, THE RECENT CHANGES TO THE LAWS OF BOLIVIA WITH
RESPECT TO MINING, AND LAWS IN ARGENTINA WHICH IMPACT PAN AMERICANS
ABILITY TO REPATRIATE FUNDS; THE ABILITY OF THE COMPANIES TO MAINTAIN
AND REPAIR EQUIPMENT NECESSARY TO OPERATE THEIR MINES, PARTICULARLY FOR
EXAMPLE, IN LIGHT OF RECENT CHANGES TO IMPORT AND EXPORT RESTRICTIONS IN
ARGENTINA; FUTURE SUCCESSFUL EXPANSION OF THE DOLORES MINE AND
DEVELOPMENT OF THE NAVIDAD PROJECT, THE LA PRECIOSA PROJECT, AND OTHER
DEVELOPMENT PROJECTS OF THE COMPANIES; THE SUFFICIENCY OF THE COMPANIES
CURRENT WORKING CAPITAL, ANTICIPATED OPERATING CASH FLOW OR THEIR
ABILITY TO RAISE NECESSARY FUNDS; ESTIMATED PRODUCTION RATES FOR SILVER
AND OTHER PAYABLE METALS PRODUCED BY THE COMPANIES; TIMING OF PRODUCTION
AND THE CASH AND TOTAL COSTS OF PRODUCTION AT EACH OF THE COMPANIES
PROPERTIES; THE ESTIMATED COST OF SUSTAINING CAPITAL; ONGOING OR FUTURE
DEVELOPMENT PLANS AND CAPITAL REQUIREMENTS; REPLACEMENT, IMPROVEMENT OR
REMEDIATION PROGRAMS; THE ESTIMATES OF EXPECTED OR ANTICIPATED ECONOMIC
RETURNS FROM THE COMPANIES MINING PROJECTS; FORECAST NON-OPERATING
SPENDING; FUTURE SALES OF THE METALS, CONCENTRATES OR OTHER PRODUCTS
PRODUCED BY THE COMPANIES; AND THE COMPANIES PLANS AND EXPECTATIONS FOR
THEIR PROPERTIES AND OPERATIONS.
THESE STATEMENTS REFLECT THE COMPANIES CURRENT VIEWS
WITH RESPECT TO FUTURE EVENTS AND ARE NECESSARILY BASED UPON A NUMBER OF
ASSUMPTIONS AND ESTIMATES THAT, WHILE CONSIDERED REASONABLE BY THE
COMPANIES, 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
COMPANIES HAVE 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
COMPANIES BUSINESSES; CHANGES IN NATIONAL AND LOCAL GOVERNMENT,
LEGISLATION, TAXATION, CONTROLS OR REGULATIONS INCLUDING, AMONG OTHERS,
CHANGES TO IMPORT AND EXPORT REGULATIONS AND LAWS RELATING TO THE
REPATRIATION OF CAPITAL AND FOREIGN CURRENCY CONTROLS; POLITICAL OR
ECONOMIC DEVELOPMENTS IN CANADA, THE UNITED STATES, MEXICO, PERU,
ARGENTINA, BOLIVIA OR OTHER COUNTRIES WHERE THE COMPANIES 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, CAVEINS AND FLOODING); RISKS RELATING TO THE
CREDIT WORTHINESS OR FINANCIAL CONDITION OF SUPPLIERS, REFINERS AND
OTHER PARTIES WITH WHOM THE COMPANIES DO 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;
PAN AMERICANS ABILITY TO COMPLETE AND SUCCESSFULLY INTEGRATE
ACQUISITIONS AND TO MITIGATE OTHER BUSINESS COMBINATION RISKS;
CHALLENGES TO, OR DIFFICULTY IN MAINTAINING, THE COMPANIES 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 THE COMPANYS
BUSINESS" IN THE COMPANIES MOST RECENT FORMS 40-F AND ANNUAL
INFORMATION FORMS 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 COMPANIES HAVE 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 COMPANIES DO NOT
INTEND, AND DO 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.