FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For May 22, 2003
PAN AMERICAN SILVER CORP.
1500 - 625 HOWE STREET
VANCOUVER, B.C.
V6C 2T6
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 whether the registrant by furnishing the information
contained in this Form 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-____
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PAN AMERICAN SILVER CORP.
Date: May 22, 2003 By: (Signed) ROBERT PIROOZ
--------------------------
Robert Pirooz
Vice President, Legal Affairs
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This is the form of a material change report required under section 85(1) of the
Securities Act and section 151 of the Securities Rules.
BC FORM 53-901F
(PREVIOUSLY FORM 27)
SECURITIES ACT
MATERIAL CHANGE REPORT UNDER
SECTION 85(1) OF THE SECURITIES ACT (BRITISH COLUMBIA)
AND SIMILAR PROVISIONS OF OTHER APPLICABLE LEGISLATION
ITEM 1. REPORTING ISSUER
Pan American Silver Corp. (the "COMPANY")
1500 - 625 Howe Street
Vancouver, BC V6C 2T6
ITEM 2. DATE OF MATERIAL CHANGE
May 13, 2003
ITEM 3. PRESS RELEASE
A press release was issued by the Company on May 13, 2003 at
Vancouver, British Columbia and distributed through the facilities of
Canada NewsWire.
ITEM 4. SUMMARY OF MATERIAL CHANGE
The Company announced its first quarter financial and operations
results for the quarter ended March 31, 2003. All amounts are
expressed in U.S. dollars. The company reported a net loss for the
first quarter of $1.1 million ($0.02 per share) compared to a net loss
of $1.3 million ($0.03 per share) for the first quarter of 2002.
During the first quarter the Company completed its acquisition of
Corner Bay Silver and its wholly owned Alamo Dorado silver project in
Sonora State. Pan American is now updating the Corner Bay feasibility
study and a drilling and metallurgical testing program has been
initiated in order to evaluate a mill versus heap leach process for
the project.
ITEM 5. FULL DESCRIPTION OF MATERIAL CHANGE
HIGHLIGHTS
o Record quarterly silver production of 2.15 million ounces from
Pan American's four wholly owned silver operations.
o Acquisition of Corner Bay Silver completed and feasibility study
review of Alamo Dorado silver project initiated.
o Excellent silver and gold drilling results at Manantial Espejo
property, Argentina.
o La Colorada mine expansion on schedule and budget for July 2003
start-up.
FINANCIAL (all amounts are expressed in US$)
Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA; Warrants TSX:
PAA_t) reported a net loss for the first quarter of $1.1 million
($0.02 per share) compared to a net loss of $1.3 million ($0.03 per
share) for the first quarter of 2002.
Consolidated silver production for the three months ended March 31,
2003 totalled 2.15 million ounces representing a four percent increase
from the same period of the prior year. This increase was due to
increased production from the Huaron mine and production from
silver-rich pyrite stockpiles acquired late last year partially offset
by lower production from the Quiruvilca mine. Zinc metal produced
during the first quarter of 2003 amounted to 9,343 tonnes (2002 --
10,107 tonnes), lead production was 5,812 tonnes (2002 -- 5,441
tonnes) and copper production was 767 tonnes (2002 -- 669 tonnes).
Revenue for the first quarter of 2003 amounted to $7.8 million (2002
-- $10.2 million). The decrease in revenue was due to the timing of
concentrate shipments. Revenue for the first quarter of this year was
generated from sales of 14,260 tonnes of zinc concentrate (2002 --
18,990 tonnes), 1,256 tonnes of lead concentrate (2002 -- 4,790
tonnes) and 2,878 tonnes of copper concentrate (2002 -- 2,934 tonnes).
Operating costs were also lower for the first quarter of 2003 relative
to 2002 because of lower shipments. The concentrate shipment delays
were requested by certain purchasers to allow them to accumulate
larger volumes and thereby lower unit shipping costs.
The average metal prices realized during the first quarter of 2003
were marginally higher than for the corresponding period of last year.
The price received per ounce of silver averaged $4.37 (2002 -- $4.15)
and for zinc the realized price per pound was $0.36 (2002 -- $0.36).
During the first quarter of 2003, operating activities generated cash
of $0.5 million. Investing activities consumed $2.3 million and
financing activities generated $4.2 million. Operating cash flow
resulted from an increase in cash advances received for concentrates
not shipped. Investing activities consisted of spending on property
plant and equipment of $5.4 million including $4.1 million for the La
Colorada mine expansion and $0.5 million on infrastructure and
equipment at the Huaron mine. Cash of $3.1 million was received from
the acquisition of Corner Bay Silver Inc. Proceeds of $4 million were
received from the La Colorada expansion loan and repayments of $0.4
million were made on the Huaron loan. Total debt and capital asset
lease obligations outstanding at March 31, 2003 amounted to $9.2
million of which $1.6 million is current.
PERU OPERATIONS
Pan American's three Peru silver operations produced a total of 1.95
million ounces of silver in the first quarter. The Huaron mine had a
good quarter, producing 1.2 million ounces of silver, 5,500 tonnes of
zinc and 4,400 tonnes of lead from 158,000 tonnes of ore at a total
cash cost of $3.81 per ounce of silver produced net of by product
credits. The mine's 10 percent expansion, which commenced in late
2002, is nearly complete and production for 2003 is planned at 4.9
million ounces of silver. The Quiruvilca mine
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produced 0.6 million ounces of silver, 3,700 tonnes of zinc and 1,300
tonnes of lead in the quarter from 121,000 tonnes of ore. Quiruvilca's
operating results continue to be negatively affected by low metal
prices, and expected but lower-than-normal grades in the current
mining areas. Total cash costs at Quiruvilca were $5.20 per ounce of
silver produced net of by product credits. The small pyrite stockpile
operation near the Huaron mine produced 0.13 million ounces of silver
in the quarter at a cash cost of $2.08 per ounce.
MEXICO OPERATIONS
At the Company's La Colorada mine, 0.2 million ounces of silver were
produced in the first quarter. Operating results continue to be
treated as pre-production revenue. The mine's fully financed $20
million expansion project remains on schedule and budget for
completion in early July, with forecast production of 2.2 million
ounces in 2003 at a cash cost of $3.06 per ounce of silver. In March
the Company began drawing from the $10 million project loan from the
International Finance Corporation, a member of the World Bank Group,
to fund remaining capital expenditures.
The highlight of the first quarter was the completion of the Company's
acquisition of Corner Bay Silver and its wholly owned Alamo Dorado
silver project in Sonora State. This followed approval of the
transaction by shareholders in September and an agreement respecting
water rights for the project from Mexican authorities in February. Pan
American is now updating the Corner Bay feasibility study and a
drilling and metallurgical testing program has been initiated in order
to evaluate a mill versus heap leach process for the project. This
program is expected to be complete in September and will enable
project financing later in the year and, subject to financing,
commencement of construction. Based on Corner Bay's original
feasibility study, planned production from Alamo Dorado is 6 million
ounces per year at an average cash cost of $3.25 per equivalent ounce
of silver.
EXPLORATION AND DEVELOPMENT PROJECTS
A 6,000 meter drilling program at the 50 percent owned Manantial
Espejo property in Argentina concluded during the quarter, with
excellent results. Planning is now in progress for an underground
tunnelling and drilling program, to commence in late 2003. The recent
drilling is expected to increase the current measured and indicated
resource of 4,390,000 tonnes grading 264 g/t silver and 4.51 g/t gold
and inferred resource of 1,590,000 tonnes grading 258 g/t silver and
3.65 g/t gold. In Bolivia, silver production continued from the small
scale San Vicente silver mine under lease to a Bolivian mining
company. Discussions remain underway to re-initiate work that will
enable a new feasibility study and ultimately expended mine
production. Finally, in Russia, the Dukat mine continued its start-up
though production statistics are not yet available.
OTHER DEVELOPMENTS
Pan American is pleased to welcome several new members to its senior
operating group to better manage its strong growth. John Wright,
President and Chief Operating Officer, will be stepping down in
mid-year for family reasons but he will remain an active Director of
the company. Geoff Burns has been appointed to fulfil his functions.
Mr.
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Burns has had a distinguished career in the mining industry. He served
in a variety of financial roles including Chief Financial Officer and
Controller with a major Canadian gold mining company from 1984 to 1998
and most recently he was Chief Financial Officer of a large US silver
and gold producer from 199 to 2003. Brenda Radies has joined the
company as Vice President of Corporate Relations to replace Rosie
Moore. Since 1993, Ms. Radies has been with one of Canada's and the
world's largest gold producers, most recently as Director of Corporate
Communications. Robert Pirooz has rejoined the Company as Vice
President, Legal Affairs. Finally, Bill Faust, a mining engineer with
broad experience in mine development and operations in North America
and Mexico, joins the company as manager of the Alamo Dorado silver
mine development project, a position he held with Corner Bay Silver.
SILVER MARKETS
The most reliable annual compendium of silver statistics was published
on May 8, 2003 by London-based GFMS on behalf of the Silver Institute.
GFMS reported that the deficit between silver fabrication demand and
conventional silver supply (mine production and scrap) remained very
large at 67.4 million ounces. Industrial demand for silver increased
in 2002, world silver mine production declined (and is likely to
decline further in 2003), and overall silver demand fell by 3.5
percent, overwhelmingly due to a 28 percent slump in Indian jewellery
and silverware demand. Chinese government sales were reported to have
decreased to 51 million ounces from 68 million in 2002. Although GFMS
increased its estimate of remaining Chinese silver stocks, it noted
that Chinese internal demand increased sharply in 2002 almost
eliminating the historic surplus of Chinese mine supply. Once this
surplus is eliminated, China will be a net silver consumer which is
expected to result in faster depletion of remaining Chinese official
silver stocks. The recent weakness of the US dollar is also a positive
factor in silver market fundamentals.
ITEM 6. RELIANCE ON SECTION 85(2) OF THE ACT
This report is not being filed on a confidential basis.
ITEM 7. OMITTED INFORMATION
There are no significant facts required to be disclosed herein which
have been omitted.
ITEM 8. SENIOR OFFICERS
For Further information, please contact:
Name: Robert Pirooz
Office: Vice President, Legal Affairs
Telephone: (604) 684-1175
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ITEM 9. STATEMENT OF SENIOR OFFICER
The foregoing accurately discloses the material change referred to
herein.
DATED at Vancouver, British Columbia, this 22nd day of May, 2003.
(signed) Robert Pirooz
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Signature of a senior officer of the reporting issuer
Robert Pirooz, Vice President, Legal Affairs
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