Pan American Silver Announces Resumption of Operations Previously Suspended by COVID-19 Restrictions

VANCOUVER, June 1, 2020 /CNW/ - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) ("Pan American") announced today that operations have resumed at its Dolores and La Colorada mines in Mexico, which follows the restart of its Shahuindo, La Arena, San Vicente and Manantial Espejo operations that was initiated in May. The mines are initially operating at reduced capacities to accommodate new protocols in response to COVID-19. Pan American is currently awaiting the regulatory authorization to resume the Huaron and Morococha operations in Peru. Pan American had suspended normal operations at its mines in Mexico, Peru, Argentina and Bolivia in March 2020 to comply with mandatory national quarantines imposed in response to the COVID-19 pandemic. The Timmins West and Bell Creek mines in Canada have continued to operate at 90% of capacity. 

 

Detailed protocols have been introduced at all mines to protect the health and safety of the workforce. These protocols include strict sanitary measures, return-to-work health screenings and on-site medical personnel to monitor and respond to any health concerns. Pan American is remobilizing the workforce gradually in order to provide greater physical distancing and to allow time to progressively assess and refine the new protocols. 

 

"We are proceeding with a careful approach to restarting operations, as we work towards restoring full production levels at our operations while protecting the health and safety of our people," said Michael Steinmann, President and Chief Executive Officer of Pan American. "The COVID-19 pandemic continues to cause hardship in many of the communities near our operations. We are expanding the humanitarian assistance we have been providing from donations of food and medical supplies to include assistance in sanitation efforts and facilitating access to education." 

 

Pan American withdrew its 2020 operating guidance on March 12, 2020, given the uncertainties related to the COVID-19 pandemic, and plans to update its guidance for 2020 once the impact of the new protocols on operations can be better determined. Pan American also notes that some of the sustaining capital projects planned for 2020 will be carried over into 2021 as a result of COVID-19. 

 

OPERATIONS UPDATE

 

Mexico

 

La Colorada: ramp-up of underground mining and processing activities commenced on May 24, 2020, with current mining rates at approximately 60% to 70% of capacity. Exploration drilling of the skarn discovery has also restarted, while work on advancing the two new mine ventilation raises continued throughout the suspension. The pre-grouting program for both raises is proceeding well, with completion and commissioning of the underground ventilation raise expected in the third quarter of 2020. The larger exhaust ventilation raise from underground to surface remains on schedule to be completed near the end of 2020.  

 

Dolores: open pit mining, crushing, and heap leaching production activities resumed today at approximately 70% to 80% of capacity. The restart of the pulp agglomeration plant and underground mining has been deferred while Pan American assesses and refines health and safety protocols. During the suspension, circulation of process solutions on the heap leach pads continued, with gold and silver produced from pad inventory at reduced rates. Construction activity on the heap leach pad expansion will resume in the fourth quarter of 2020 once the rain season has passed. 

 

Pan American had suspended its La Colorada and Dolores operations in early May to comply with an Executive Order from Mexico's Ministry of Health.

 

Peru

 

Shahuindo: open pit mining and run-of-mine heap leach activities resumed on May 15, 2020, and production is ramping up from the current rate of 70% to 80% of capacity. Construction of the heap leach pad expansion is scheduled to resume in June 2020.

 

La Arena: open pit mining and run-of-mine heap leach activities resumed on May 15, 2020, and production is ramping up from the current rate of 70% to 80% of capacity. Preparation for construction of the waste rock storage facility is scheduled to resume in June 2020.

 

During the suspensions at both Shahuindo and La Arena, circulation of process solutions on the heap leach pads continued, with gold produced from pad inventory at about 40% of the expected production rate.

 

Huaron and Morococha: Pan American is awaiting the regulatory authorizations to restart these underground mines.

 

Pan American had suspended normal operations at its mines in Peru to comply with a mandatory national quarantine declared on March 15, 2020, which has currently been extended to June 30, 2020. On May 2, 2020, the government authorized the resumption of certain mining activities.

 

Bolivia

 

San Vicente: underground development activities resumed on May 12, 2020, and mechanized long-hole underground mining resumed on May 18, 2020 at reduced capacity.  Plant operations resumed today at approximately 70% to 80% of capacity. 

 

Pan American had suspended normal operations at its San Vicente mine to comply with a mandatory national quarantine declared on March 25, which remains in place at this time. On May 2, 2020, the government authorized the resumption of mining activities.

 

Argentina

 

Manantial Espejo: underground mining resumed on April 26, 2020 at approximately 60% to 70% of capacity. The plant is operating at full throughput capacity with ore from the underground mines at Manantial Espejo and Joaquin, supplemented with available low-grade stockpile resources.

 

Joaquin: underground mining resumed on May 2, 2020 and high-grade stockpiled ore is being hauled to the Manantial Espejo plant for processing. 

 

COSE: development work on preparing the underground mine resumed on May 4, 2020. Pan American expects to begin mining and hauling ore from COSE to the Manantial Espejo plant in the third quarter of 2020.  

 

Pan American had suspended normal operations at its mines in Argentina to comply with a mandatory national quarantine declared on March 20, 2020, which has been extended to June 7, 2020. On April 3, 2020, the government authorized the resumption of mining activities. 

 

Canada

 

Timmins West and Bell Creek: continue to operate at approximately 90% of planned capacity; Pan American is advancing plans to return to full production rates in 2020, depending on the timing of achieving full workforce levels.

 

Guatemala

 

The Escobal mine remains on care and maintenance while the government of Guatemala conducts an ILO 169 consultation with the Indigenous communities.

 

About Pan American Silver

 

Pan American owns and operates silver and gold mines located in Mexico, Peru, Canada, Argentina and Bolivia. We also own the Escobal mine in Guatemala that is currently not operating. As the world's second largest primary silver producer with the largest silver reserve base globally, we provide enhanced exposure to silver in addition to a diversified portfolio of gold producing assets. Pan American has a 25-year history of operating in Latin America, earning an industry-leading reputation for corporate social responsibility, operational excellence and prudent financial management. We are headquartered in Vancouver, B.C. and our shares trade on NASDAQ and the Toronto Stock Exchange under the symbol "PAAS".