pan american SILVER Reports Best Fourth Quarter in the Companys history 14th Consecutive Year of Silver Production Growth with Record Earnings and Cash Flows (All amounts in US dollars unless otherwise stated and all production figures are approximate) Vancouver, B.C.

- February 15, 2010 - Pan American Silver Corp.

(NASDAQ: PAAS; TSX: PAA) (the "Company"), today reported record-setting operating and financial results for the fourth quarter and fiscal year ended December 31, 2009.

The Company also provided an update on its operations and its production forecast for 2010.
Fourth Quarter 2009 Highlights (unaudited)1 * Silver production increased 30% to 6.0 million ounces.

* Gold production increased 425% to 26,600 ounces.

* Consolidated cash costs declined 35% to $5.362 per payable ounce of silver.

* Mine operating earnings were a Company record $57.3 million.

* Net income was $27.8 million or $0.31 per share, as compared to a net loss in the prior year period * Cash flow from operations (excluding changes in non-cash working capital) 3 was $52.5 million or $0.59 per share. * Sales increased 234% to a record $154.4 million.

* Acquired Aquiline Resources Inc.

and with it, the Navidad project; one of the largest undeveloped primary silver deposits in the world. 2009 Year-End Highlights (unaudited)1 * Silver production increased 23% to a record 23.0 million ounces. * Gold production increased 297% to a record 100,704 ounces. * Consolidated cash costs declined 7% to $5.532 per payable ounce of silver. * Mine operating earnings rose 35% to a record $126 million. * Net income increased 152% to $62 million or $0.71 per share. * Cash flow from operations (excluding changes in non-cash working capital) 3 increased 52% to a record $151.7 million or $1.73 per share. * Sales increased 34% to a record $454.8 million. * Completed commissioning and commenced commercial production at the Manantial Espejo mine in Argentina. * Completed construction of a major expansion and commenced commercial production at the San Vicente mine in Bolivia. * Signed agreement with Orko Silver Corp.

to jointly advance the La Preciosa silver deposit in Mexico.
2010 Outlook * Silver production expected to increase modestly to 23.4 million ounces at an expected cash cost of $6.40 per ounce, net of by-product credits * Complete definition drilling and metallurgical tests and produce feasibility report for La Preciosa * Commence definition drilling, metallurgical testing and advance feasibility study for Navidad
1 Financial information in this news release is based on Canadian GAAP; results are unaudited; percentages compare year-on-year 2 Cash costs per payable ounce of silver is a non GAAP measure.

The Company believes that, in addition to cost of sales, cash costs per ounce is a useful and complementary benchmark that investors use to evaluate the Companys performance and ability to generate cash flow and is well understood and widely reported in the silver mining industry. However, cash costs per ounce does not have a standardized meaning prescribed by Canadian GAAP.

Investors are cautioned that cash costs per ounce should not be construed as an alternative to cost of sales determined in accordance with Canadian GAAP as an indicator of performance.

The Companys method of calculating cash costs per ounce may differ from the methods used by other entities and, accordingly, the Companys cash costs per ounce may not be comparable to similarly titled measures used by other entities.

See "Financial and Operating Highlights" below for a reconciliation of this measure to the Companys cost of sales. 3 Cash flow from operations (excluding changes in non-cash working capital) is a non-GAAP measure.

This non-GAAP measure is used by the Company to manage and evaluate operating performance and the Company considers this measure to better reflect normalized cash flow generated by operations.

Cash flow per share is a non-GAAP measure.

Cash flow per share is used as a measure of return on capital and is calculated using cash flow from operations, before working capital changes, divided by basic weighted average shares outstanding.

Investors are cautioned that this measure is not defined in current GAAP and there is no comparable measure defined in GAAP.
"2009 was an exceptional year for Pan American," said Geoff Burns, President & CEO.

"We recorded our 14th consecutive year of silver production growth with the smooth commissioning of two new mines. Record gold and silver production coupled with the resurgence of precious metal prices allowed us to post new records for both net earnings and operating cash flow.

This performance and the maturing of our portfolio of assets has positioned us to be able to declare the first dividend to shareholders in Pan Americans history.

In addition, with the acquisition of Navidad and the joint venture on La Preciosa we have positioned the Company for a period of transformational growth in 2012 and 2013." Financial Results In the fourth quarter, Pan American generated consolidated net income of $27.8 million or $0.31 per share.

Net income for the period was reduced by (i) a non-cash fair value charge of $2.2 million for a delay in recovery of refundable value added tax in Argentina, and (ii) an increase to $4.3 million in exploration spending as the Company moved aggressively forward with the La Preciosa development project.

Net income for the year was a Company record $62 million or $0.71 per share, an increase of 152% as compared to 2008.

The increase in net income was primarily attributable to record gold and silver production, and higher realized silver and gold prices.

Sales during the quarter rose to $154.4 million, an increase of 234% as compared to the same period of 2008.

The increase resulted from higher quantities of precious metals sold, combined with significant increases in metal prices.

Pan Americans revenues jumped to a record $454.8 million for the full year, which was 34% more than in 2008, again due to increased precious metal production and higher realized prices.

The company generated a record $57.3 million in mine operating earnings during the fourth quarter.

Annual consolidated mine operating earnings were 35% higher than a year ago at a record $126 million.

During the fourth quarter Pan American generated $52.5 million in cash from operating activities, before working capital adjustments, a vast improvement from the last quarter of 2008 when the companys cash flow from operating activities was negative.

During 2009, the Companys cash flow from operations before working capital adjustments jumped 52% to $151.7 million or $1.73 per share as compared to 2008.

At year-end Pan American had cash and short-term investments of $193.1 million, no debt and an undrawn $70 million credit facility.

Production and Operations Pan American produced 6.0 million ounces of silver and 26,600 ounces of gold during the fourth quarter.

San Vicente and Alamo Dorado were the Companys largest silver producing mines in the fourth quarter, each producing 1.1 million ounces.

Manantial Espejo produced over 1 million ounces of silver and added 19,500 ounces of gold during the quarter, while the La Colorada mine produced 0.95 million ounces of silver.

The Companys three Peruvian operations combined to post a solid quarter adding 1.9 million ounces of silver to Pan Americans consolidated production.

In 2009, the Companys silver production grew for the 14th consecutive year to a record 23.0 million ounces, a 23% increase from 2008.

Gold production increased to 100,700 ounces, a 300% increase as compared to 2008.

Both records were the direct result of commencing commercial operations at Manantial Espejo and San Vicente.

In addition, the Company also achieved record zinc and copper production of 44,246 tonnes and 6,446 tonnes, respectively. Consolidated cash costs for the fourth quarter declined to $5.36 per ounce of silver, net of by-product credits, a 35% decrease from the $8.24 per ounce posted in the last quarter of 2008.

Consolidated cash costs for the year were $5.53 per ounce of silver, net of by-product credits, a 7% improvement from the $5.97 posted in 2008 and well below the Companys annual guidance of $6.00 per ounce for 2009.

Lower cash costs were a result of ongoing costs-savings programs implemented in late 2008, higher by-product metal prices and the inclusion of low-cost production from Manantial Espejo in the Companys consolidated base.

Outlook In 2010 the Company expects a 2% increase in silver production to 23.4 million ounces.

The anticipated production increase will come from a full year of production from both Manantial Espejo and San Vicente, offset by an expected production decline at Alamo Dorado.


Estimated Silver Production Million ounces Estimated Cash Costs Per Ounce US$ Huaron 3.7 8.72 Morococha 2.7 4.13 Quiruvilca 1.4 6.95 Silver Stockpiles 0.2 4.05 San Vicente 3.0 7.01 La Colorada 3.6 8.73 Alamo Dorado 4.2 6.87 Manantial Espejo 4.6 3.26 TOTAL 23.4 6.40 1 1 Price assumptions: Zn $1,875/tonne; Pb $1,875/tonne; Cu $5,600/tonne; Au $975/oz Pan American expects gold production to decline in 2010, to 85,600 ounces as a result of slightly lower gold grades at Manantial Espejo and Alamo Dorado.

In contrast, the Company expects zinc, lead and copper production to increase to 46,000 tonnes, 15,800 tonnes and 7,300 tonnes respectively, due to a full years production from San Vicente and an increase in throughput at Huaron.

Consolidated cash costs are expected to increase during 2010 to $6.40 per ounce of silver net of by- product credits.

The expected increase is primarily due to the strengthening of local currencies, increased royalties and higher fuel and energy prices. Growth Projects As a result of the acquisition of 100% of the outstanding shares of Aquiline Resources Inc.

("Aquiline"), Pan American added the Navidad silver deposit to its portfolio.

Navidad is one of the largest undeveloped primary silver deposits in the world.

Navidad is located in the province of Chubut, Argentina, where there is currently a ban on open-pit mining; however, the Company believes that it is uniquely positioned to work with the provincial government and to advance the development of this tremendous deposit into an operating mine.

The Companys success in permitting and developing the Manantial Espejo mine, also in Argentina, should prove extremely valuable in this effort.

Pan American has a proven development and mining operations team, an exemplary safety and environmental record and has built open and interactive community and government relations programs in Argentina.

The Company is also in a strong financial position and believes that it can constructively work with all stakeholders to develop Navidad in socially and environmentally sensitive manner.

The Company expects to spend approximately $16.5 million in the development and exploration of Navidad in 2010. Pan American also plans to be very active at La Preciosa in 2010.

A budget of approximately $9 million will be dedicated to complete a program of exploration and delineation drilling, metallurgical testing and engineering, all designed to produce a feasibility study for La Preciosa by year-end.

In 2010, the Company also intends to invest approximately $43.6 million in sustaining capital, spread among its 8 producing properties.

"Our objectives for 2010 are straightforward," Burns added, "Maximize the value and production at our existing assets while meaningfully advancing both the Navidad and La Preciosa projects.

Together these two projects have the potential to propel Pan Americans silver production to a whole new level and we have the financial strength and technical expertise to make that happen.

I would like to acknowledge every one of our employees and contractors in Mexico, Peru, Bolivia, Argentina and Canada, who have contributed to Pan Americans success with their hard work and dedication." *** About Pan American Silver Pan American Silvers mission is to be the worlds largest and lowest cost primary silver mining company by increasing its low cost silver production and silver reserves.

The Company has eight operating mines in Mexico, Peru, Bolivia and Argentina.

Pan American also owns the Navidad project in Chubut, Argentina and is the operator of the La Preciosa project in Durango, Mexico. Technical information contained in this news release has been reviewed by Michael Steinmann, P.Geo., Executive VP Geology & Exploration, and Martin Wafforn, P.Eng., VP Technical Services, who are the Companys Qualified Persons for the purposes of NI 43-101.


Pan American will host a conference call to discuss the results on Tuesday, February 16, 2010 at 11:00 am ET (08:00 am PT).

North American and International participants dial 1-604-638-5340.

Live audio webcast can be accessed at https://www.services.choruscall.com/links/pan100215.html.

Listeners may also gain access by logging on at www.panamericansilver.com.

The call will be available for replay for one week after the call by dialing 1-800-319-6413 (North America and International toll numbers) or 1-604-638-9010 (Outside Canada and the US) and entering code 6218 followed by # sign. Information Contact Kettina Cordero Coordinator, Investor Relations (604) 684-1175
www.panamericansilver.com
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 relating to the Company and its operations. All statements, other than statements of historical fact, are forward-looking statements.

When used in this news release the words, "believes", "expects", "intends", "plans", "forecast", "objective", "OUTLOOK", "POSITIONING", "POTENTIAL", "ANTICIPATED", "budget", 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 ABILITY OF THE COMPANY TO SUCCESSFULLY integrate AQUILINE RESOURCES INC.

and the effect of the acquisition on the company; THE EFFECTS OF LAWS, REGULATIONS AND GOVERNMENT POLICIES AFFECTING PAN AMERICANS OPERATIONS OR POTENTIAL FUTURE OPERATIONS, INLCUDING BY NOT LIMITED TO, LAWS IN THE PROVINCE OF CHUBUT, ARGENTINA, WHICH, currently have significant restrictions on mining; FUTURE SUCCESSFUL DEVELOPMENT OF THE NAVIDAD PROJECT, the la preciosa project, AND OTHER DEVELOPMENT PROJECTS OF THE COMPANY; the sufficiency of the Companys current working capital, anticipated operating cash flow or its ability to raise necessary funds; the accuracy of mineral reserve and resource estimates; estimated production rates for silver and other payable metals produced by the Company; timing of production and the cash and total costs of production at each of the Companys properties; the estimated cost of and availability of funding necessary for sustaining capital; ongoing OR FUTURE DEVELOPMENT PLANS AND capital replacement, improvement or remediation programs; the estimates of expected or anticipated economic returns from the Companys mining projects, as reflected in feasibility studies or other reports prepared in relation to development of projects; estimated exploration expenditures to be incurred on the Companys various properties; forecast capital and non-operating spending; future sales of the metals, concentrates or other products produced by the Company; and the Companys plans and expectations for its properties and operations.
These statements reflect the Companys 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 Companys 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; the Companys ability to complete and successfully integrate acquisitions AND TO MITIGATE OTHER BUSINESS COMBINATION RISKS; challenges to, OR DIFFICULTY IN MAINTAINING, the Companys 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 Americans Business" in the Companys most recent Form 40-F 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.
Financial & Operating Highlights
Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
Consolidated Financial Highlights (in thousands of US dollars) (Unaudited)
Net income (loss) for the period $ 27,805 $ (33,316) $ 61,998 $ 24,602 Basic income (loss) per share $ 0.31 $ (0.41) $ 0.71 $ 0.31 Mine operating earnings (losses) $ 57,334 $ (9,884) $ 126,006 $ 93,219 Cash generated by (used in) operations (excluding changes in non-cash operating working capital) $ 52,485 $ (11,568) $ 151,658 $ 99,932 Mining property, plant and equipment expenditures $ 8,617 $ 60,167 $ 52,751 $ 243,800 Cash and short-term investments $ 193,097 $ 30,139 $ 193,097 $ 30,139 Net working capital $ 272,275 $ 95,082 $ 272,275 $ 95,082
Metal Production
Silver - ounces
5,992,726
4,604,560
23,043,539
18,672,939 Gold - ounces
26,625
5,068
100,704
25,146 Zinc - tonnes
11,891
10,809
44,246
39,811 Lead - tonnes
3,473
3,732
14,328
15,974 Copper - tonnes
1,582
1,608
6,446
6,069
Consolidated Costs per Ounce of Payable Silver (net of by-product credits)
Total cash cost per ounce(1) $ 5.36 $ 8.24 $ 5.53 $ 5.97 Total production cost per ounce(1) $ 9.32 $ 10.95 $ 9.57 $ 8.76
Payable ounces of silver 5,696,804
4,327,214
21,888,131
17,542,831
Average Metal Prices
Silver - London Fixing per ounce $ 17.57 $ 10.21 $ 14.67 $ 14.99 Gold - London Fixing per ounce $ 1,100 $ 795 $ 973 $ 872 Zinc - LME Cash Settlement per tonne $ 2,211 $ 1,189 $ 1,659 $ 1,870 Lead - LME Cash Settlement per tonne $ 2,292 $ 1,251 $ 1,726 $ 2,085 Copper - LME Cash Settlement per tonne $ 6,643 $ 3,940 $ 5,137 $ 6,952
(1) Total cash cost per ounce and total production cost per ounce are non-GAAP measurements and investors are cautioned not to place undue reliance on them and are urged to read all GAAP accounting disclosures presented in the unaudited consolidated financial statements.

In addition, see the reconciliation of operating costs to "Cash Costs per Ounce of Payable Silver" set forth in the table that follows.
Mine Operations Highlights
Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
Huaron Mine
Tonnes milled
177,447
159,066
699,420
732,146 Average silver grade - grams per tonne
182
206
200
194 Average zinc grade - percent
2.56%
2.52%
2.48%
2.31% Average silver recovery - percent
77.9%
79.2%
79.2%
79.3% Silver - ounces
810,358
832,556
3,562,893
3,628,490 Gold - ounces
275
287
1,235
1,552 Zinc - tonnes
2,844
2,591
11,198
11,047 Lead - tonnes
1,062
1,254
4,372
5,903 Copper - tonnes
531
472
2,166
1,707
Total cash cost per ounce (1) $ 10.73 $ 10.73 $ 9.95 $ 8.06 Total production cost per ounce (1) $ 12.27 $ 12.00 $ 11.33 $ 9.38
Payable ounces of silver
731,223
754,718
3,225,928
3,280,053
Morococha Mine*
Tonnes milled
169,003
148,867
638,805
599,174 Average silver grade - grams per tonne
155
153
156
153 Average zinc grade - percent
3.16%
3.84%
3.24%
3.34% Average silver recovery - percent
87.2%
82.7%
86.1%
83.9% Silver - ounces
733,283
605,245
2,762,064
2,475,516 Gold - ounces
320
248
1,291
1,191 Zinc - tonnes
4,499
4,749
16,942
16,677 Lead - tonnes
1,339
1,365
5,520
6,266 Copper - tonnes
470
576
2,030
2,026
Total cash cost per ounce (1) $ 2.36 $ 8.17 $ 5.86 $ 2.84 Total production cost per ounce (1) $ 4.98 $ 10.37 $ 8.49 $ 4.98
Payable ounces of silver
654,293
539,108
2,469,949
2,214,316
* Production and cost figures are for Pan Americans share only.

Pan Americans ownership changed from 89.4% to 92.2% in December 2008.
Quiruvilca Mine
Tonnes milled
82,354
82,707
330,030
349,022 Average silver grade - grams per tonne
159
148
155
145 Average zinc grade - percent
3.84%
3.25%
3.80%
2.84% Average silver recovery - percent
86.5%
86.3%
86.3%
85.2% Silver - ounces
364,176
339,172
1,421,897
1,382,990 Gold - ounces
424
384
1,522
1,807 Zinc - tonnes
2,774
2,307
10,993
8,263 Lead - tonnes
784
815
3,230
2,793 Copper - tonnes
407
512
1,643
2,185
Total cash cost per ounce (1) $ 6.26 $ 13.88 $ 8.64 $ 6.61 Total production cost per ounce (1) $ 6.85 $ 16.30 $ 9.25 $ 9.05
Payable ounces of silver
332,568
309,476
1,288,720
1,267,679
Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
Pyrite Stockpiles
Tonnes sold
-
9,353
13,984
38,712 Average silver grade - grams per tonne
-
210
218
228 Silver - ounces
-
63,226
98,235
284,194
Total cash cost per ounce (1) $ - $ 3.03 $ 3.78 $ 4.41 Total production cost per ounce (1) $ - $ 3.03 $ 3.78 $ 4.41
Payable ounces of silver
-
31,977
50,218
146,982
Alamo Dorado Mine
Tonnes milled
432,944
339,236
1,671,257
1,478,423 Average silver grade - grams per tonne
97
149
111
149 Average gold grade - grams per tonne
0.36
0.30
0.39
0.42 Average silver recovery - percent
85.4%
89.4%
87.7%
89.0% Silver - ounces
1,062,582
1,441,797
5,320,637
6,115,836 Gold - ounces
4,332
3,180
18,211
16,822 Copper - tonnes
4
-
206
-
Total cash cost per ounce (1) $ 5.07 $ 6.18 $ 4.51 $ 4.38 Total production cost per ounce (1) $ 9.81 $ 10.80 $ 9.12 $ 9.02
Payable ounces of silver
1,058,770
1,438,193
5,284,037
6,100,546
La Colorada Mine
Tonnes milled
83,460
93,518
324,916
377,844 Average silver grade - grams per tonne
408
370
384
371 Average silver recovery - percent
86.2%
86.9%
86.2%
86.4% Silver - ounces
945,933
961,720
3,467,856
3,910,830 Gold - ounces
1,741
969
6,554
3,773 Zinc - tonnes
638
586
2,311
1,835 Lead - tonnes
288
299
1,205
1,012
Total cash cost per ounce (1) $ 7.66 $ 8.50 $ 7.55 $ 8.06 Total production cost per ounce (1) $ 11.31 $ 10.54 $ 11.21 $ 10.09
Payable ounces of silver
909,623
923,422
3,333,170
3,742,934
San Vicente Mine*
Tonnes milled
60,747
26,977
167,006
93,591 Average silver grade - grams per tonne
595
472
537
348 Average zinc grade - percent
2.42%
2.74%
2.26%
2.72% Average silver recovery - percent
92.0%
89.8%
91.0%
83.6% Silver - ounces
1,069,572
360,846
2,626,774
875,083 Zinc - tonnes
1,135
576
2,803
1,989 Copper - tonnes
170
48
401
152
Total cash cost per ounce (1) $ 6.56 $ 6.10 $ 7.07 $ 7.57 Total production cost per ounce (1) $ 8.72 $ 6.99 $ 9.51 $ 8.75
Payable ounces of silver
1,005,014
330,319
2,458,600
790,320
* Production and cost figures are for Pan Americans share only.

Pan Americans ownership was 95% throughout 2008 and 2009.

Commercial production commenced on April 1st, 2009.
Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
Manantial Espejo Mine*
Tonnes milled
188,149
-
632,949
- Average silver grade - grams per tonne
186
-
209
- Average gold grade - grams per tonne
3.63
-
3.79
- Average silver recovery - percent
87.9%
-
87.6%
- Silver - ounces
1,006,823
-
3,783,183
- Gold - ounces
19,533
-
71,892
-
Total cash cost per ounce (1) $ 0.11
- $ (0.84)
- Total production cost per ounce (1) $ 9.12
- $ 8.19
-
Payable ounces of silver
1,005,313
-
3,777,508
-
* Commercial production commenced on January 1, 2009
Cash Costs per Ounce of Payable Silver (net of by-product credits)
Three months ended December 31, Twelve months ended December 31,
2009 2008
2009 2008 Cost of sales
$ 72,697
$ 43,613
$ 245,637
$ 199,032 Add/(Subtract)
Smelting, refining, and transportation charges
19,015
12,096
64,118
58,378 By-product credits
(69,357)
(25,564)
(215,657)
(160,276) Mining royalties
5,598
671
11,867
4,843 Workers participation and voluntary payments
(463)
1,660
(1,151)
(1,700) Change in inventories
1,633
1,113
15,068
1,419 Other
1,888
2,681
3,368
3,980 Minority interest adjustment
(501)
(611)
(2,144)
(1,043) Cash Operating Costs
A
$ 30,510
35,659
$ 121,108
104,663 Add/(Subtract)
Depreciation and amortization
24,375
12,549
83,169
46,349 Asset retirement and reclamation
753
672
2,998
2,687 Change in inventories
(2,195)
(1,270)
3,388
839 Other
(70)
(98)
(271)
(232) Minority interest adjustment
(260)
(146)
(867)
(605) Production Costs B
$ 53,113
$ 47,366
$ 209,525
$ 153,671
Payable Ounces of Silver C
5,696,804
4,327,214
21,888,131
17,542,831 Total Cash Operating Costs per Ounce A/C
$ 5.36
$ 8.24
$ 5.53
$ 5.97 Total Production Costs per Ounce B/C
$ 9.32
$ 10.95
$ 9.57
$ 8.76
Pan American Silver Corp.

Consolidated Balance Sheets As at December 31, 2009 (Unaudited in thousands of U.S.

dollars)
2009 2008 Assets
Current
Cash $ 100,474 $ 26,789 Short-term investments
92,623
3,350 Accounts receivable
66,059
37,587 Income taxes receivable
12,132
13,480 Inventories
93,446
72,650 Unrealized gain on commodity contracts
160
10,829 Future income taxes
4,993
5,602 Prepaid expenses and other current assets
2,568
4,076 Total Current Assets
372,455
174,363
Mineral property, plant and equipment, net
1,457,724
697,061 Long-term refundable tax receivable
11,909
- Long-term trade receivable
3,825
- Other assets
2,696
1,959 Total Assets $ 1,848,609 $ 873,383
Liabilities
Current
Accounts payable and accrued liabilities $ 96,159 $ 58,287 Income taxes payable
4,021
6,727 Unrealized loss on foreign currency contracts
-
14,267 Total Current Liabilities
100,180
79,281
Provision for asset retirement obligation and reclamation
62,775
57,323 Future income taxes
305,820
45,392 Convertible debenture
20,788
- Total Liabilities
489,563
181,996
Non-controlling interests
15,256
5,746
Shareholders Equity
Share capital (authorized: 200,000,000 common shares of no par value)
1,206,647
655,517 Contributed surplus
47,293
4,122 Accumulated other comprehensive income (loss)
1,618
(232) Retained earnings
88,232
26,234 Total Shareholders Equity
1,343,790
685,641 Total Liabilities, non-controlling interests and Shareholders Equity $ 1,848,609 $ 873,383
PAN AMERICAN SILVER CORP. Consolidated Statements of Operations (Unaudited In thousands of US dollars, except for share and per share amounts)
Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
Sales $ 154,406 $ 46,278 $ 454,812 $ 338,600
Cost of sales
72,697
43,613
245,637
199,032 Depreciation and amortization
24,375
12,549
83,169
46,349 Mine operating earnings (losses)
57,334
(9,884)
126,006
93,219
General and administrative
3,571
2,783
12,769
10,435 Exploration and project development
4,609
2,265
9,934
5,494 Accretion of asset retirement obligation
753
672
2,998
2,687 Doubtful accounts provision
-
-
4,375
- Write-down of mining assets
-
15,117
-
15,117 Operating earnings (losses)
48,401
(30,721)
95,930
59,486 Interest and financing expenses
(2,472)
(168)
(4,292)
(951) Investment and other expenses, net
(3,407)
(4,396)
(1,467)
(1,970) Foreign exchange gains (losses)
1,781
(1,045)
(1,018)
(6,147) Net (losses) gains on commodity and foreign currency contracts
(414)
(5,814)
1,918
(1,619) Net (losses) gains on sale of assets
8
(6)
(220)
998 Income (Loss) before taxes and non-controlling interest
43,897
(42,150)
90,851
49,797 Non-controlling interest
(863)
328
(1,097)
(765) Income tax (provision) recovery
(15,229)
8,506
(27,756)
(24,430) Net income (loss) for the period $ 27,805 $ (33,316) $ 61,998 $ 24,602
Earnings (Loss) per share:
Basic income (loss) per share $ 0.31 $ (0.41) $ 0.71 $ 0.31 Diluted income (loss) per share $ 0.31 $ (0.41) $ 0.71 $ 0.30
Weighted average number of shares outstanding
(in thousands)
Basic
88,337
80,786
87,578
80,236 Diluted
88,661
80,786
87,751
80,773
PAN AMERICAN SILVER CORP. Consolidated Statements of Cash Flows (Unaudited In thousands of US dollars)
Three months ended Twelve months ended
December 31, December 31,
2009 2008 2009 2008
Operating activities
Net income (loss) for the period $ 27,805 $ (33,316) $ 61,998 $ 24,602 Reclamation expenditures
(500)
-
(992)
(167) Items not affecting cash:
Depreciation and amortization
24,375
12,549
83,169
46,349 Write-down of mining assets
-
15,117
-
15,117 Asset retirement and reclamation accretion
753
672
2,998
2,687 Net (losses) gains on sale of assets
(8)
6
220
(998) Future income taxes
2,418
(5,828)
2,113
3,210 Unrealized gains (losses) on foreign exchange
(3,099)
(6,005)
1,478
(2,769) Non-controlling interest
863
(328)
1,097
765 Present value charge on long term receivable
2,770
-
2,770
- Doubtful accounts provision
-
-
4,375
- Gain on disposal of securities for acquisition of subsidiary
(3,640)
-
(6,353)
- Net change in unrealized losses (gains) on commodity and foreign currency contracts
54
4,818
(3,597)
8,913 Stock-based compensation
694
747
2,382
2,223 Changes in non-cash operating working capital
(275)
6,673
(35,690)
(6,947) Cash generated by (used in) operating activities
52,210
(4,895)
115,968
92,985
Investing activities
Mining property, plant and equipment expenditures (net
(8,617)
(60,167)
(52,751)
(243,800) of related accruals)
Acquisition of net assets of subsidiary, (net of $4.3 million cash acquired)
942
-
942
- Proceeds from (purchase of) sale of short-term investments
(6,285)
23,298
(80,136)
62,779 Proceeds from sale of assets
71
2,589
208
12,199 Purchase of other assets
(4,051)
-
(14,605)
- Cash used in investing activities
(17,940)
(34,280)
(146,342)
(168,822)
Financing activities
Proceeds from issuance of common shares
-
-
103,909
50,843 Share issue costs
-
-
(5,592)
- Dividends paid by subsidiaries to non controlling interests
-
-
-
(2,626) Contributions received / receipts (payments) of debt
955
1,539
5,742
2,494 Cash generated by financing activities
955
1,539
104,059
50,711
Increase (decrease) in cash during the period
35,225
(37,636)
73,685
(25,126) Cash, beginning of period
65,249
64,425
26,789
51,915 Cash, end of period $ 100,474 $ 26,789 $ 100,474 $ 26,789
Supplemental Cash Flow Information
Interest paid $ - $ - $ - $ - Taxes paid
5,018
4,825
21,655
27,577 Debenture and equity issued to acquire mineral interest
514,870
-
514,870
- Stock compensation issued to employees and directors $ 335 $ - $ 1,963 $ 877