February 21, 2007
PAN AMERICAN SILVER REPORTS
RECORD Q4 AND YEAR-END EARNINGS
(All amounts in US Dollars unless otherwise stated)
† Cash costs are a non-GAAP measure. Please refer to page 11 of this release for a reconciliation to cost of sales.
* Financials based on Canadian GAAP.
FINANCIAL RESULTS (unaudited)
Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA) today reported unaudited financial and operating
results for the full year and fourth quarter 2006, and provided production guidance for 2007.
Fourth quarter 2006 net income was $29.6 million ($0.39 per share) on sales of $82.6 million, compared to
a net loss of $29.5 million ($0.44 loss per share) on sales of $37.9 million in the year earlier period. Fourth
quarter earnings included recognition of an $8.0 million gain relating to the sale of the Company’s interest in
the Dukat mine in Russia in 2004.
Net income for the year was a record $58.2 million ($0.79 per share) compared to a net loss of $28.6 ($0.43
loss per share) recorded for 2005. Included in net income in 2006 was an $18.3 million loss on commodity
and foreign exchange contracts, partially offset by an $8.0 million gain on the sale of the Company’s interest
in the Dukat mine. Cash flow from operations increased 510% to $65.9 million from $10.8 million in 2005.
Cost of sales for 2006 was $124.6 million, or $37.0 million more than in 2005 due primarily to increased
mining and milling rates at all of the Company’s operations, costs associated with the shipment of
approximately 8,400 tonnes more concentrate from Peru than in 2005, and industry-wide cost increases for
consumables, energy and personnel. Also, as a result of
higher earnings, workers’ participation in Peru for 2006 increased to $9.2 million, as compared to $1.2
million incurred in 2005.
During 2006 the Company maintained its strong financial position. Working capital at December 31, 2006
was $204.6 million, an increase of $129.9 million over the prior year. The Company anticipates th