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<SEC-DOCUMENT>0001137171-04-001385.txt : 20041102
<SEC-HEADER>0001137171-04-001385.hdr.sgml : 20041102
<ACCEPTANCE-DATETIME>20041102134816
ACCESSION NUMBER:		0001137171-04-001385
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20041101
FILED AS OF DATE:		20041102
DATE AS OF CHANGE:		20041102

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PAN AMERICAN SILVER CORP
		CENTRAL INDEX KEY:			0000771992
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-13727
		FILM NUMBER:		041112611

	BUSINESS ADDRESS:	
		STREET 1:		1500-625 HOWE STREET
		CITY:			VANCOUVER BC CANADA
		STATE:			A1
		ZIP:			V6C 2T6

	MAIL ADDRESS:	
		STREET 1:		1500 625 HOWE ST
		CITY:			VANCOUVER BC V6C 2T6
		STATE:			A1
		ZIP:			999999999

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PAN AMERICAN MINERALS CORP
		DATE OF NAME CHANGE:	19950608
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>tables.htm
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   <TITLE>Filed by Filing Services Canada Inc.  403-717-3898</TITLE>
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<P style="margin-top: 0; margin-bottom: 0" align="center">
<B><FONT size=2 face="Arial">RECORD PROFITS, CASH FLOW AND PRODUCTION IN THIRD QUARTER</FONT></B>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2 face="Arial">MARK PAN AMERICAN SILVER&acute;S TENTH ANNIVERSARY</FONT></B>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(all amounts in US dollars unless otherwise stated) </FONT>
</P>
<P>
<B><U><FONT size=2 face="Arial">THIRD QUARTER HIGHLIGHTS</FONT></U></B>
</P>
<UL>
<LI>
  <p style="margin-top: 0; margin-bottom: 0"><FONT size=2 face="Arial">Record net earnings of $3.3 million for the quarter ($0.05/share) versus a net loss of $1.2 million ($0.02) in the third quarter of 2003. Net earnings year-to-date of $4.2 million.</FONT></LI>
<LI>
  <p style="margin-top: 0; margin-bottom: 0"><FONT size=2 face="Arial">Record consolidated revenue of $27.4 million - 131% over the third quarter of 2003.</FONT></LI>
<LI>
  <p style="margin-top: 0; margin-bottom: 0"><FONT size=2 face="Arial">Record cash flow from operations, before changes to non-cash working capital, of $7.0 million, versus $0.3 million in 2003 - the eighth consecutive quarter of improved operating profits.</FONT></LI>
<LI>
  <p style="margin-top: 0; margin-bottom: 0"><FONT size=2 face="Arial">Record quarterly silver production of 3.2 million ounces, an increase of 45% over the same period of 2003.</FONT></LI>
<LI>
  <p style="margin-top: 0; margin-bottom: 0"><font face="Arial" size="2">Completion of acquisition of 84% of the Morococha silver mine in Peru.<BR></font></LI>
</UL>
<P>
<B><U><FONT size=2 face="Arial">FINANCIAL RESULTS</FONT></U></B>
</P>
<P>
<FONT size=2 face="Arial">Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA) reported consolidated revenue for the second quarter of $27.4 million, 131% greater than revenue in the third quarter of 2003 due to increased silver production, higher realized metal prices and higher sales from concentrate inventory. Net earnings for the quarter were $3.3 million compared to a net loss of $1.2 million in 2003. Cash flow from operating activities before changes to non-cash working capital increased to $7.0 million for the quarter. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Consolidated silver production for the third quarter was 3,173,000 ounces, a 45% increase over the third quarter of 2003 and the greatest quarterly production in the Company&#146;s history. Steady-state production from Quiruvilca, Huaron and the pyrite stockpiles was complemented by the addition of production from the newly acquired Morococha mine as of July 1, 2004. Zinc production of 10,367 tonnes was 37% higher than in the third quarter of 2003 while lead production of 4,876 tonnes was 12.5% higher also due to the addition of Morococha production.</FONT>
</P>
<P>
<FONT size=2 face="Arial">Consolidated cash costs in the third quarter rose from $3.87/oz to $4.07/oz and total costs rose from $4.39/oz to $5.09/oz due to an expected temporary increase in production costs at the La Colorada mine. Positive results from the new mine plan and more selective mining methods that have been implemented will begin to be realized in the fourth quarter.</FONT>
</P>
<P>
<FONT size=2 face="Arial">Capital spending in the third quarter declined slightly to $3.1 million, excluding $36.2 million spent to acquire the Morococha mine. Exploration spending doubled to $1.2 million in the third quarter, primarily reflecting increased activity at the Manantial Espejo and San Vicente development projects.</FONT>
</P>
<P>
<FONT size=2 face="Arial">For the nine months ended September 30, 2004, consolidated revenue totaled $63.5 million versus $32.3 million in the year-earlier period due to higher production and higher realized metal prices. Net earnings were $4.2 million versus a net loss of $4.0 million in the first nine months of 2003.</FONT>
</P>
<P>
<FONT size=2 face="Arial">Consolidated silver production in the first nine months of 2004 was 8,058,443 ounces, a 24% increase over the same period in 2003 &#150; on track for 11.5 million ounces in 2004. Zinc production of 24,890 tonnes and copper production of 2,376 tonnes were unchanged from 2003 levels.  Lead production of 12,973 tonnes was 12.5% lower than in 2003 due to lower lead production at Huaron.</FONT>
</P>
<P align="center">
<B><FONT size=2 face="Arial">1500-625 HOWE STREET, VANCOUVER, BC CANADA V6C 2T6 . TEL 604.684.1175 FAX 604.684.0147 www.panamericansilver.com</FONT></B>
</P>
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<P>
<FONT size=2 face="Arial">Cash production costs for the first nine months of 2004 declined 3% to $4.01/oz, while total production costs rose 8% to $5.00 due to higher depreciation charges. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Working capital at September 30, 2004, including cash and short-term investments of $80.8 million, improved to $97.1 million, an increase of $15.2 million from December 31, 2003. The change in working capital stems from the receipt of $54.8 million in net proceeds from a share issuance in February, offset by the purchase of the Morococha mine completed during the quarter.  Capital spending in the first nine months of 2004 was $9.7 million excluding the purchase of Morococha, down from $12.5 million a year earlier. Exploration spending increased from $1.6 million in the first three quarters of 2003 to $2.9 million in 2004, reflecting increased project development activity and drill programs to expand reserves at Huaron, San Vicente and now
Morococha. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Ross Beaty, Chairman of Pan American said, "This is the eighth consecutive quarter that Pan American has improved its operating profit &#150; and we set new records for earnings, cash flow and production. Our operations are strong, our development projects are progressing well and we have one of the best balance sheets in the industry with virtually no debt. We completed the acquisition of the low-cost Morococha silver mine last quarter and we are fully funded to start building another new mine within the next 12 months. Pan American Silver is in great shape today and we look forward to an even better future."</FONT>
</P>
<P>
<B><U><FONT size=2 face="Arial">OPERATIONS AND DEVELOPMENT HIGHLIGHTS</FONT></U></B>
</P>
<P>
<B><FONT size=2 face="Arial">PERU </FONT></B>
</P>
<P>
<font face="Arial" size="2">The <B>Quiruvilca mine</B> continued its turn-around in the third quarter with production of 654,182 ounces of silver, up 2% over 2003 levels. Cash and total production costs dropped markedly, from $4.69/oz and $4.85/oz respectively to $3.34/oz in the current quarter. For the first nine months of the year the mine produced 1,892,383 ounces of silver at a cash cost of $3.27/oz, versus similar production at a cash cost of $5.31/oz in 2003. A new life-of-mine plan is now being developed at Quiruvilca based on the discovery of a major new vein structure announced in the second quarter.</font>
</P>
<P>
<font face="Arial" size="2">Silver production at the <B>Huaron mine</B> remained steady in the third quarter at 1,064,476 ounces at a cash cost of $3.87/oz. Total production costs increased 16% over the prior-year period to $5.21/oz reflecting higher depreciation costs. Year-to-date the mine has produced 3,129,071 ounces at a cash cost of $3.93/oz, in line with 2003.</font>
</P>
<P>
<font face="Arial" size="2">The Company concluded the acquisition of 84% of the <B>Morococha</B>
<B>Mine</B> in the third quarter. Morococha produced 694,564 ounces of silver to Pan American&#146;s account in the third quarter at a cash cost of $3.52/oz and a total cost of $4.85/oz. Over the long term the mine is expected to produce an average of 3.5 million ounces of silver annually (100%) at cash costs of less than $3.00/oz.</font>
</P>
<P>
<font face="Arial" size="2">The <B>Silver Stockpile Operation</B> continued to generate excellent cash flow, producing 231,115 ounces of silver at a cash cost of $2.87/oz during the most recent quarter.  Year to date the Company has produced 779,426 ounces from the silver stockpiles at a cash cost of $2.83/oz. The increased cash costs in 2004 reflect a sliding-scale refining charge, which increases as the silver price rises.</font>
</P>
<P>
<B><FONT size=2 face="Arial">MEXICO </FONT></B>
</P>
<P>
<font face="Arial" size="2">The <B>La Colorada mine</B> in Mexico increased its third quarter silver production to 441,959 ounces, up from 244,971 ounces in 2003. During the quarter a new mine plan was implemented to reduce dilution, to increase silver grades and to blend ore from clay-rich areas that has been difficult to process. This required more non-production underground development, resulting in high cash costs for the quarter, as planned. Ore grades are now 19% higher and new mining areas have been opened up with lower clay-content ore, increasing recoveries. Cash costs are now expected to decline and silver production to increase steadily. Silver production and cash costs are expected to improve further in 2005 once the sulphide zone returns to production post dewatering.</font>
</P>
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<font face="Arial" size="2">2</font>
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<P>
<font face="Arial" size="2">Staffing has begun on the <B>Alamo Dorado</B> project in anticipation of a positive feasibility study, now due in February 2005. A power supply has been secured and the design process for the power line&#146;s right-of-way has been initiated. Grindability tests have been completed and a pilot plant is now operating. Construction is expected to begin in 2005.</font>
</P>
<P>
<B><FONT size=2 face="Arial">ARGENTINA </FONT></B>
</P>
<P>
<font face="Arial" size="2">The 50% owned <B>Manantial Espejo</B> silver-gold joint venture also progressed significantly in the third quarter. The feasibility study currently underway now envisions a combined open-pit, underground operation to exploit the Maria and Karina Union deposits. Ramped pit designs along with annual production schedules and waste dump designs have been completed. As drilling continues to intersect new vein structures and to expand the two main systems on the property, another 5,000 m of infill and extension drilling has been initiated. Drilling has also begun to secure water for the mine and a number of baseline studies have been completed. Given the ongoing drilling programs, the joint venture will provide a proven and probable reserve with a mine plan upon completion of the feasibility study early in 2005.</font>
</P>
<P>
<B><FONT size=2 face="Arial">BOLIVIA </FONT></B>
</P>
<P>
<font face="Arial" size="2">At the <B>San Vicente</B> property, small-scale mining produced 86,704 ounces of silver in the third quarter of the year to Pan American&#146;s account, while the Company continues to move forward with a feasibility study testing the viability of increasing production in 2005. EMUSA, a Bolivian mining company, continues to carry out small-scale contract mining under a site services agreement.</font>
</P>
<P>
<B><U><FONT size=2 face="Arial">SILVER MARKETS</FONT></U></B>
</P>
<P>
<FONT size=2 face="Arial">The silver price opened the quarter at $5.91/oz, breaking through the $6 level almost immediately and closing at $6.66/oz on September 30, 2004 for an average price of $6.47/oz, approximately the same as the average for the year.  The silver price remains very volatile, but has continued to rebound from its second-quarter lows and was up 23% over year-end 2003 as of late October.</FONT>
</P>
<P>
<FONT size=2 face="Arial">According to Ross Beaty: "Primary factors influencing the silver price today continue to be the US dollar, global industrial production &#150; particularly in the electronics/electrical sector &#150; and investment demand. The underlying demand/supply fundamentals for silver are sound. It is a great time to be one of the world&#146;s major silver producers." </FONT>
</P>
<P>
<font face="Arial" size="2">Pan American will host a conference call to discuss the results on Monday, November 1, 2004 at 11:00 a.m. Pacific time (2:00 p.m. Eastern time).  North American participants please call toll-free 1-877-825-5811. International participants please dial 1-973-582-2767. The conference may also be accessed live from the investor relations section of the Pan American website at
<B>www.panamericansilver.com</B>. To listen to a playback for one week after the call, dial 1-877-519-4471 and enter the pass code 5270686.</font>
</P>
<P>
<FONT size=2 face="Arial">For More Information, please contact: </FONT>
</P>
<P>
<FONT size=2 face="Arial">Brenda Radies, Vice-President Corporate Relations (604) 806-3158 </FONT>
</P>
<P>
<FONT size=2 face="Arial">www.panamericansilver.com </FONT>
</P>
<P align="center">
<FONT size=2 face="Arial">- End -</FONT>
</P>
<P>
<FONT size=2 face="Arial">CAUTIONARY NOTE </FONT>
</P>
<P>
<FONT size=2 face="Arial">Some of the statements in this news release are forward-looking statements, such as estimates of future production levels, expectations regarding mine production costs, expected trends in mineral prices and statements that describe Pan American's future plans, objectives or goals. Actual results and developments may differ materially from those contemplated by these statements depending on such factors as changes in general economic conditions and financial markets, changes in prices for silver and other metals , technological and operational hazards in Pan American's mining and mine development activities, uncertainties inherent in the calculation of mineral reserves, mineral resources and metal recoveries, the timing and availability of financing, governmental and other approvals, political unrest or instability in countries where Pan American is active, labor relations and other risk factors listed from time to time in Pan American&#146;s Form 40-F </FONT>
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<TR>
   <TD width="320"><B><FONT size=2 face="Arial">Financial &amp; Operating Highlights</FONT></B></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
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   <TD colspan=4 width="150" align="center"><B><FONT size=2 face="Arial">Three months ended</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="146" align="center"><B><FONT size=2 face="Arial">Nine months ended</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
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<TR>
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   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="150" align="center"><B><FONT size=2 face="Arial">September 30,</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="146" align="center"><B><FONT size=2 face="Arial">September 30,</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
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<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63" align="center"><B><FONT size=2 face="Arial">2004</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63" align="center"><B><FONT size=2 face="Arial">2003</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62" align="center"><B><FONT size=2 face="Arial">2004</FONT></B></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62" align="center"><B><FONT size=2 face="Arial">2003</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
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<TR>
   <TD width="414" colspan="5"><font face="Arial" size="2"><B>Consolidated Financial Highlights (in thousands</B>
    <B>of US dollars)</B></font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
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   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
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   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Net income (loss) for the period</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">3,289</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">(1,225)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">4,210</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">(3,972)</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Earnings (loss) per share</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">0.05</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">(0.02)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">(0.11)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">(0.08)</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Cash flow from operations before working</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">capital adjustments</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">6,989</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">302</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">12,287</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">344</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Capital spending **</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">39,327</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">3,501</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">45,889</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">12,513</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Exploration expense</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">1,213</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">600</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">2,878</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">1,588</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Cash and short-term investments</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">80,839</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">92,852</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">80,839</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">92,852</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Working capital</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">97,076</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">87,054</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">97,076</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">87,054</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD colspan=3 width="394"><FONT size=2 face="Arial">** Includes the acquisition of the Morococha mine for $36,214</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><B><FONT size=2 face="Arial">Consolidated Metal Production</FONT></B></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Tonnes milled</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">420,912</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">282,650</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">1,023,475</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">871,689</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Silver metal - ounces</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">3,173,000</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">2,187,508</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">8,058,443</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">6,518,167</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Zinc metal - tonnes</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">10,367</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">7,578</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">24,890</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">24,759</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Lead metal - tonnes</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">4,876</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">4,332</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">12,973</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">14,836</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Copper metal - tonnes</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">1,106</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">841</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">2,376</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">2,625</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD colspan=6 width="481"><B><FONT size=2 face="Arial">Consolidated Cost per Ounce of Silver (net of by-product credits)</FONT></B></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Total cash cost per ounce</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">4.07</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">3.87</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">4.01</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">4.12</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Total production cost per ounce</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">5.09</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">4.39</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">5.00</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">4.63</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><B><FONT size=2 face="Arial">(In thousands of US dollars)</FONT></B></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Direct operating costs plus value of metals lost</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">in smelting and refining</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">20,885</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">11,467</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">51,988</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">35,612</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">By-product credits</FONT></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(8,312)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(3,950)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(20,502)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(11,508)</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Cash operating costs</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">12,573</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">7,517</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">31,486</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">24,104</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Depreciation, amortization &amp; reclamation</FONT></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">3,127</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1,013</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">7,782</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,987</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Production costs</FONT></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">15,700</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">8,530</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">39,268</FONT></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">27,091</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Ounces used in cost per ounce calculations</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">3,086,296</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">1,942,537</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">7,847,992</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">5,846,927</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><B><FONT size=2 face="Arial">Average Metal Prices</FONT></B></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="62"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Silver - London Fixing</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">6.46</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">4.99</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">6.47</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">4.75</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Zinc - LME Cash Settlement per pound</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">0.44</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">0.37</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">0.47</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">0.36</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Lead - LME Cash Settlement per pound</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">0.42</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">0.23</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">0.39</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">0.22</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="320"><FONT size=2 face="Arial">Copper - LME Cash Settlement per pound</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">1.29</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">0.79</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">1.27</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="62"><FONT size=2 face="Arial">0.77</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE></center>
</div>
<P align="center">
<font face="Arial" size="2">4</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_5"></A>

<div align="center">
  <center>

<TABLE width="671" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="372"><B><FONT size=2 face="Arial">Mine Operations Highlights</FONT></B></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="138" align="center"><B><FONT size=2 face="Arial">Three Months ended</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=5 width="123" align="center"><B><FONT size=2 face="Arial">Nine Months ended</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="138" align="center"><B><FONT size=2 face="Arial">September 30</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="115" align="center"><B><FONT size=2 face="Arial">September 30</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><B><FONT size=2 face="Arial">Huaron Mine</FONT></B></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="57"><B><FONT size=2 face="Arial">2004</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="57"><B><FONT size=2 face="Arial">2003</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="50"><B><FONT size=2 face="Arial">2004</FONT></B></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="43"><B><FONT size=2 face="Arial">2003</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Tonnes milled</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">166,965</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">148,630</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">481,445</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">461,570</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Average silver grade - grams per tonne</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">228</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">246</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">230</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">256</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Average zinc grade - percent</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3.13%</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3.75%</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3.22%</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">3.83%</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Silver - ounces</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">1,064,476</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">1,047,616</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="58"><FONT size=2 face="Arial">3,129,071</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="51"><FONT size=2 face="Arial">3,398,329</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Zinc - tonnes</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3,856</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">4,598</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">11,877</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">14,881</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Lead - tonnes</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">2,825</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3,247</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">8,677</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">11,277</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Copper - tonnes</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">491</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">362</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">1,250</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">1,050</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Net smelter return per tonne</FONT></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">57.32</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">46.45</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">59.14</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">44.96</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Cost per tonne</FONT></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">41.95</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">41.70</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">43.92</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">41.09</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Margin (loss) per tonne</FONT></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">15.37</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">4.75</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">15.22</FONT></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">3.87</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Total cash cost per ounce</FONT></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3.87</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3.78</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3.93</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">3.81</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Total production cost per ounce</FONT></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">5.21</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">4.49</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">5.25</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">4.49</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><B><FONT size=2 face="Arial">(In thousands of US dollars)</FONT></B></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Direct operating costs &amp; value of metals lost</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">in smelting and refining</FONT></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">7,666</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">6,516</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">22,990</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">20,059</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">By-product credits</FONT></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(3,543)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,560)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(10,694)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(7,118)</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Cash operating costs</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">4,123</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3,956</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">12,295</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">12,941</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Depreciation, amortization and reclamation</FONT></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1,423</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">748</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">4,138</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,322</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Production costs</FONT></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">5,546</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">4,704</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">16,433</FONT></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">15,263</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Ounces for cost per ounce calculations</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">1,064,476</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">1,047,616</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="58"><FONT size=2 face="Arial">3,129,071</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="51"><FONT size=2 face="Arial">3,398,329</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><B><FONT size=2 face="Arial">Quiruvilca Mine</FONT></B></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Tonnes milled</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">98,625</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">106,930</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">284,590</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">352,199</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Average silver grade - grams per tonne</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">235</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">212</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">236</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">191</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Average zinc grade - percent</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3.48%</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3.17%</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3.66%</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">3.17%</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Silver - ounces</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">654,182</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">641,747</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="58"><FONT size=2 face="Arial">1,892,383</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="51"><FONT size=2 face="Arial">1,875,775</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Zinc - tonnes</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">2,920</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">2,845</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">8,994</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">9,525</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Lead - tonnes</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">890</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">980</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">2,998</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">3,266</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Copper - tonnes</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">310</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">479</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">800</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">1,575</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Net smelter return per tonne</FONT></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">61.65</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">38.44</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">62.84</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">34.02</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Cost per tonne</FONT></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">42.45</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">38.89</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">42.97</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">38.92</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Margin (loss) per tonne</FONT></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">19.20</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">(0.45)</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">19.87</FONT></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">(4.90)</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Total cash cost per ounce</FONT></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3.34</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">4.69</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3.27</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">5.31</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Total production cost per ounce</FONT></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3.34</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">4.85</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3.25</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">5.46</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><B><FONT size=2 face="Arial">(In thousands of US dollars)</FONT></B></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Direct operating costs &amp; value of metals lost</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">in smelting and refining</FONT></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">4,566</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">4,402</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">13,305</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">14,350</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">By-product credits</FONT></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,383)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(1,390)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(7,111)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(4,391)</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Cash operating costs</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">2,182</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">3,012</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">6,194</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">9,960</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Capital spending expensed and carrying value adjustment</FONT></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">104</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(48)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">288</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Production costs</FONT></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">2,182</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="57" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">3,115</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">6,146</FONT></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">10,247</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="57"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="372"><FONT size=2 face="Arial">Ounces for cost per ounce calculations</FONT></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">654,182</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="57"><FONT size=2 face="Arial">641,747</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="58"><FONT size=2 face="Arial">1,892,383</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="51"><FONT size=2 face="Arial">1,875,775</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE></center>
</div>
<P align="center">
<font face="Arial" size="2">5</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_6"></A>

<div align="center">
  <center>

<TABLE width="664" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="125" align="center"><B><FONT size=2 face="Arial">Three Months ended</FONT></B></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=5 width="130" align="center"><B><FONT size=2 face="Arial">Nine Months ended</FONT></B></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="125" align="center"><B><FONT size=2 face="Arial">September 30</FONT></B></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="122" align="center"><B><FONT size=2 face="Arial">September 30</FONT></B></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><B><FONT size=2 face="Arial">Morococha Mine*</FONT></B></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="51"><B><FONT size=2 face="Arial">2004</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="50"><B><FONT size=2 face="Arial">2003</FONT></B></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="50"><B><FONT size=2 face="Arial">2004</FONT></B></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="50"><B><FONT size=2 face="Arial">2003</FONT></B></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Tonnes milled</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">112,580</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">112,580</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Average silver grade - grams per tonne</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">227</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">227</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Average zinc grade - percent</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">3.69%</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3.69%</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Silver - ounces</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">694,564</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">694,564</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Zinc - tonnes</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">3,079</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3,079</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Lead - tonnes</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">1,162</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">1,162</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Copper - tonnes</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">290</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">290</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Net smelter return per tonne</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">54.53</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">54.53</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Cost per tonne</FONT></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">38.38</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">38.38</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Margin (loss) per tonne</FONT></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">16.14</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">16.14</FONT></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Total cash cost per ounce</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">3.52</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3.52</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Total production cost per ounce</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">4.85</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">4.85</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><B><FONT size=2 face="Arial">In thousands of US dollars</FONT></B></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Direct operating costs &amp; value of metals lost</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">in smelting and refining</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">4,690</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">4,690</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">By-product credits</FONT></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,246)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,246)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Cash operating costs</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">2,444</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">2,444</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Capital spending expensed and carrying value adjustment</FONT></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">927</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">927</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Production costs</FONT></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">3,371</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">3,371</FONT></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Ounces for cost per ounce calculations</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">694,564</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">694,564</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD colspan=12 width="644"><FONT size=2 face="Arial">* Production and cost figures are for Pan American's share only. Pan American's ownership increased
    from 81% to 84% during the quarter.</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><B><FONT size=2 face="Arial">La Colorada Mine</FONT></B></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Tonnes milled</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">34,822</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">27,090</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">126,211</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">57,920</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Average silver grade - grams per tonne</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">510</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">430</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">457</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">467</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Silver - ounces</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">441,959</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">244,971</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="58"><FONT size=2 face="Arial">1,352,549</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">671,240</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Zinc - tonnes</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">135</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">122</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">353</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Lead - tonnes</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">105</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">136</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">293</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Total cash cost per ounce</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">7.15</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">6.17</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Total production cost per ounce</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">8.57</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">7.86</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><B><FONT size=2 face="Arial">(In thousands of US dollars)</FONT></B></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Direct operating costs &amp; value of metals lost</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">in smelting and refining</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">3,299</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">8,801</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">By-product credits</FONT></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(140)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(450)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Cash operating costs</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">3,159</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">8,351</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Depreciation, amortization and reclamation</FONT></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">629</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,274</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Production costs</FONT></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">3,789</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">10,625</FONT></TD>
   <TD width="10" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="370"><FONT size=2 face="Arial">Ounces for cost per ounce calculations</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">441,959</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="58"><FONT size=2 face="Arial">1,352,549</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE></center>
</div>
<P align="center">
<font face="Arial" size="2">6</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_7"></A>

<div align="center">
  <center>

<TABLE width="662" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="131" align="center"><B><FONT size=2 face="Arial">Three Months ended</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=5 width="136" align="center"><B><FONT size=2 face="Arial">Nine Months ended</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="131" align="center"><B><FONT size=2 face="Arial">September 30</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="126" align="center"><B><FONT size=2 face="Arial">September 30</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><B><FONT size=2 face="Arial">Pyrite Stockpile Sales</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="53"><B><FONT size=2 face="Arial">2004</FONT></B></TD>
   <TD width="12" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="52"><B><FONT size=2 face="Arial">2003</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="52"><B><FONT size=2 face="Arial">2004</FONT></B></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="50"><B><FONT size=2 face="Arial">2003</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Tonnes sold</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">19,214</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">20,197</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">64,050</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">47,041</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Average silver grade - grams per tonne</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">374</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">391</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">378</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">379</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Silver ounces</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">231,115</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">253,174</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">779,426</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">572,823</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Net smelter return per tonne</FONT></TD>
   <TD align="center" width="9"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">44.23</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">35.55</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">44.76</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">33.08</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Cost per tonne</FONT></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1.03</FONT></TD>
   <TD width="12" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">0.56</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">0.64</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">0.60</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Margin (loss) per tonne</FONT></TD>
   <TD align="center" width="9" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="53" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">43.20</FONT></TD>
   <TD width="12" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">34.99</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">44.12</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">32.48</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Total cash cost per ounce</FONT></TD>
   <TD align="center" width="9"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">2.87</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">2.17</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">2.83</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">2.10</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Total production cost per ounce</FONT></TD>
   <TD align="center" width="9"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">3.51</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">2.81</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">3.46</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">2.76</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><B><FONT size=2 face="Arial">(In thousands of US dollars)</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Value of metals lost in smelting and refining</FONT></TD>
   <TD align="center" width="9"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">664</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">549</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">2,202</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">1,203</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">By-product credits</FONT></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="12" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Cash operating costs</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">664</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">549</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">2,202</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">1,203</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Depreciation, amortization and reclamation</FONT></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">147</FONT></TD>
   <TD width="12" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">162</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">491</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">377</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">Production costs</FONT></TD>
   <TD align="center" width="9" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="53" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">811</FONT></TD>
   <TD width="12" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">711</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="52" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">2,693</FONT></TD>
   <TD width="11" style="border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 2 solid #000000"><FONT size=2 face="Arial">1,580</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Ounces for cost per ounce calculations</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">231,115</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">253,174</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">779,426</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">572,823</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><B><FONT size=2 face="Arial">San Vicente Mine**</FONT></B></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="53"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="52"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Tonnes milled</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">7,920</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">18,649</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Average silver grade - grams per tonne</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">389</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">408</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Average zinc grade - percent</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">7.48%</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">5.28%</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Silver - ounces</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">86,704</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">210,451</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Zinc - tonnes</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">512</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">817</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="354"><FONT size=2 face="Arial">Copper - tonnes</FONT></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="53"><FONT size=2 face="Arial">15</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="52"><FONT size=2 face="Arial">36</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE></center>
</div>
<TABLE>
<TR>
   <TD valign="top" width="5%"><font face="Arial" size="2">**<BR>&nbsp;&nbsp;</font></TD>
   <TD valign="top"><font face="Arial" size="2">Pan American does not include San Vicente's production in its cost per ounce calculations. The production statistics represent Pan American's 50% interest in the mine's silver production.<BR>   </font>   </TD>
</TR>
</TABLE>
<P align="center">
<font face="Arial" size="2">7</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_8"></A>

<P align="center" style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>

<P align="center" style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2 face="Arial">PAN AMERICAN SILVER CORP.</FONT></B>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Consolidated Balance Sheets (in thousands of US dollars)</FONT>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="14%" align="right"><FONT size=2 face="Arial">September 30</FONT></TD>
   <TD width="2%" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="12%" align="right"><FONT size=2 face="Arial">December 31</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" align="right" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="2%" align="right" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" align="right" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%">
    <p align="right"><FONT size=2 face="Arial">(Unaudited)</FONT></p>
   </TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><B><FONT size=2 face="Arial">ASSETS</FONT></B></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Current</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Cash and cash equivalents</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">17,862</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">14,191</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Short-term investments</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">62,977</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">74,938</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Accounts receivable</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">16,948</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">7,545</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Inventories</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">8,809</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">6,612</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Prepaid expenses</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">3,599</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1,289</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Total Current Assets</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">110,195</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">104,575</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Mineral property, plant and equipment - notes 3 and 4</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">102,315</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">83,574</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Investment and non-producing properties - note 5</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">121,323</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">83,873</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Direct smelting ore</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">3,289</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">3,901</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Other assets</FONT></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">4,826</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">3,960</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">Total Assets</FONT></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="13%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">341,948</FONT></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="11%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">279,883</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><B><FONT size=2 face="Arial">LIABILITIES</FONT></B></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Current</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">11,435</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">10,525</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Advances for metal shipments</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">1,244</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">4,536</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Current portion of bank loans and capital lease</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">14</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">2,639</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Current portion of other non-current liabilities</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">426</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">4,948</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Total Current Liabilities</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">13,119</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">22,648</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Deferred revenue</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">754</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">865</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Bank loans and capital lease</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">332</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">10,803</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Liability component of convertible debentures</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">167</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">19,116</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Provision for asset retirement obligation and reclamation</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">29,796</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">21,192</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Provision for future income tax</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">30,073</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">19,035</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Non-controlling interest</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">1,734</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><font face="Arial" size="2">-</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Severance indemnities and commitments</FONT></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,640</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,126</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Total Liabilities</FONT></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">78,615</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">95,785</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><B><FONT size=2 face="Arial">SHAREHOLDERS' EQUITY</FONT></B></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Share capital</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Authorized: 100,000,000 common shares with no par value</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Issued:</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December 31, 2003 - 53,009,851 common shares</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;September 30, 2004 - 66,752,572 common shares</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">380,404</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">225,154</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Equity component of convertible debentures</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">701</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">66,735</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%"><FONT size=2 face="Arial">Additional paid in capital</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">9,874</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%"><FONT size=2 face="Arial">12,752</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Deficit</FONT></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(127,646)</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(120,543)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Total Shareholders' Equity</FONT></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">263,333</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">184,098</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="70%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">Total Liabilities and Shareholders' Equity</FONT></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="13%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">341,948</FONT></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="11%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">279,883</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P>
<FONT size=2 face="Arial">See accompanying notes to consolidated financial statements</FONT>
</P>
<P align="center">
<font face="Arial" size="2">8</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_9"></A>

<P align="center" style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>

<P align="center" style="margin-top: 0; margin-bottom: 0">
<B><FONT size=2 face="Arial">PAN AMERICAN SILVER CORP.</FONT></B>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Consolidated Statements of Operations</FONT>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Unaudited - in thousands of US dollars, except per share amounts)</FONT>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="664" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="125" align="center"><FONT size=2 face="Arial">Three months ended</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="129" align="center"><FONT size=2 face="Arial">Nine months ended</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="125" align="center"><FONT size=2 face="Arial">September 30,</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="129" align="center"><FONT size=2 face="Arial">September 30,</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="11" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="center"><FONT size=2 face="Arial">(Note 2)</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="center"><FONT size=2 face="Arial">(Note 2)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><B><FONT size=2 face="Arial">Revenue</FONT></B></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">27,409</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">11,890</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">63,510</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">32,265</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><B><FONT size=2 face="Arial">Expenses</FONT></B></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Operating</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">18,526</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">10,200</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">46,225</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">28,962</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;General and administration</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">934</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">565</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">2,939</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">1,548</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Depreciation and amortization</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">3,033</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">432</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">7,186</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">1,365</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Stock-based compensation</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">518</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">835</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">1,642</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">2,036</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Reclamation</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">302</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">75</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">905</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">231</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Exploration and development</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">1,213</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">600</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">2,878</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">1,588</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Interest</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">66</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">678</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">823</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1,015</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">24,592</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">13,385</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">62,598</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">36,745</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"></TD>
   <TD width="8"></TD>
   <TD width="44"></TD>
   <TD width="11"></TD>
   <TD width="8"></TD>
   <TD width="56"></TD>
   <TD width="10"></TD>
   <TD width="7"></TD>
   <TD width="50"></TD>
   <TD width="10"></TD>
   <TD width="7"></TD>
   <TD width="56" align="right"></TD>
   <TD width="10"></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Income (loss) from operations</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">2,817</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(1,495)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">912</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">(4,480)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Gain on sale of concessions</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3,583</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Debt settlement expenses</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">(53)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(1,364)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Non-controlling interest</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">(320)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(320)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Interest and other income (note 7)</FONT></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">845</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">270</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1,399</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">508</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Net income (loss) for the period</FONT></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">3,289</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(1,225)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">4,210</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">(3,972)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Adjustments:</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Charges relating to conversion of convertible</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">debentures</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(8,464)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Convertible debentures issue costs</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(3,000)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">(3,000)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Accretion of convertible debentures</FONT></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(975)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,838)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(975)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Adjusted net income (loss) attributable to</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">common shareholders</FONT></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="44" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">3,289</FONT></TD>
   <TD width="11" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="56" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(5,200)</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(7,092)</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="56" align="right" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(7,947)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Earnings (loss) per share - Basic and Fully Diluted</FONT></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">0.05</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(0.10)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(0.11)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">(0.16)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Weighted average number of shares outstanding -</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Basic</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">66,660</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">52,307</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">61,947</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">51,030</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Weighted average number of shares outstanding -</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="361"><FONT size=2 face="Arial">Fully Diluted</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">72,213</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">67,990</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">67,499</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="right"><FONT size=2 face="Arial">66,714</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P>
<font face="Arial" size="2">See accompanying notes to consolidated financial<U> </U>statements</font>
</P>
<P align="center">
<font face="Arial" size="2">9</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_10"></A>

<P align="center" style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>

<P align="center" style="margin-top: 0; margin-bottom: 0">
<B><font face="Arial" size="2">PAN AMERICAN SILVER CORP.</font></B>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Consolidated Statements of Cash Flows&nbsp;</FONT>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Unaudited - in thousands of US dollars)</FONT>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="662" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=5 width="137" align="center"><FONT size=2 face="Arial">Three months ended</FONT></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="123" align="center"><FONT size=2 face="Arial">Nine months ended</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="127" align="center"><FONT size=2 face="Arial">September 30,</FONT></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="123" align="center"><FONT size=2 face="Arial">September 30,</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="11" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="11" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51" align="center"><FONT size=2 face="Arial">(Note 2)</FONT></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center"><FONT size=2 face="Arial">(Note 2)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><B><FONT size=2 face="Arial">Operating activities</FONT></B></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><FONT size=2 face="Arial">Net income (loss) for the period</FONT></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">3,289</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(1,225)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">4,210</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(3,972)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><FONT size=2 face="Arial">Reclamation expenditures</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(327)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(919)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><FONT size=2 face="Arial">Gain on sale of assets</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(165)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(3,583)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(165)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><FONT size=2 face="Arial">Items not involving cash</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Depreciation and amortization</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">3,033</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">432</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">7,186</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">1,365</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Minority interest</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">320</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">320</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Interest accretion on convertible debentures</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">366</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Stock-based compensation</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">518</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">835</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">1,642</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">2,036</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Debt settlement expenses</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">1,208</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Compensation expense</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">245</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Asset retirement and reclamation accretion</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">302</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">75</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">905</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">231</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Operating cost provisions</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(146)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">350</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">707</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">849</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Changes in non-cash working capital items (note 8)</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(6,576)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(804)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(11,772)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(3,069)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">413</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(502)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">515</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,725)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><B><FONT size=2 face="Arial">Financing activities</FONT></B></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Shares issued for cash</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">812</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">2,940</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">61,817</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">5,638</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Shares issue costs</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(180)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Convertible debentures</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">86,250</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">86,250</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Convertible debentures issue costs</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(2,993)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(3,000)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Convertible debentures payments</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(22)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(13,542)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Capital lease repayment</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(75)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(75)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(150)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Proceeds from bank loans</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">8,000</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Repayment of bank loans</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(406)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(13,021)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(1,344)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">790</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">85,716</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">34,999</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">95,394</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><B><FONT size=2 face="Arial">Investing activities</FONT></B></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Mineral property, plant and equipment expenditures</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(2,679)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(3,006)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(8,687)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(11,644)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Investment and non-producing property expenditures</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(434)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(492)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(988)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(869)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Acquisition of net assets of subsidiary (note 3)</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(36,214)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">(36,214)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Acquisition of cash of subsidiary</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">2,393</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Proceeds from sale of assets</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">165</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3,583</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">165</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Proceeds from sale of marketable securities</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">2,007</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">12,463</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Other</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(180)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,000)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(60)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(37,320)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(3,513)</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(31,843)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(10,015)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><B><FONT size=2 face="Arial">(Decrease) increase in cash and cash equivalents</FONT></B></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><B><FONT size=2 face="Arial">during the period</FONT></B></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(36,117)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">81,701</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3,671</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">82,654</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 1 solid #000000"><B><FONT size=2 face="Arial">Cash and cash equivalents, beginning of period</FONT></B></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">53,979</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">11,138</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">14,191</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">10,185</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363" style="border-bottom: 3 double #000000"><B><FONT size=2 face="Arial">Cash and cash equivalents, end of period</FONT></B></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">17,862</FONT></TD>
   <TD width="11" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">92,839</FONT></TD>
   <TD width="11" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">17,862</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">92,839</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="500" colspan="6"><font face="Arial" size="2"><B>Supplemental disclosure of non-cash financing and</B>
    <B>investing activities</B></font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Shares issued for compensation</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">245</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Shares issued for acquisition of subsidiary</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">64,228</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="363"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Shares issued for conversion of convertible debentures</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">88,848</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P>
<FONT size=2 face="Arial">See accompanying notes to consolidated financial statements</FONT>
</P>
<P align="center">
<font face="Arial" size="2">10</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_11"></A>

<P align="center" style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>

<P align="center" style="margin-top: 0; margin-bottom: 0">
<B><font face="Arial" size="3">PAN AMERICAN SILVER CORP.</font></B>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Statements of Shareholders' Equity For the nine months ended September 30, 2004</font>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">&nbsp;(Unaudited - in thousands of US dollars, except for shares)</FONT>
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="659" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="64" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="51" align="center"><FONT size=2 face="Arial">Additional</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="128" colspan="4" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">Common
    shares</font></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="60" align="center"><FONT size=2 face="Arial">Convertible</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43" align="center"><FONT size=2 face="Arial">Paid in</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="64" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Shares</FONT></TD>
   <TD width="11" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Amount</FONT></TD>
   <TD width="11" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="60" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Debentures</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Capital</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Deficit</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Total</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="64"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><FONT size=2 face="Arial">Balance, December 31, 2002</FONT></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">43,883,454</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">161,108</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">1,327</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(106,943)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">55,492</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Stock-based compensation</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">2,871</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">2,871</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Exercise of stock options</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">1,385,502</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">9,312</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">(1,471)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">7,841</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Exercise of share purchase warrants</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">100,943</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">509</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">509</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Issued on acquisition of Corner Bay</font></TD>
   <TD width="64"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Silver Inc.</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">7,636,659</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">54,203</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">54,203</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Fair value of stock options granted</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">1,136</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">1,136</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Fair value of share purchase warrants</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">8,889</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">8,889</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Issue of convertible debentures</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">63,201</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">63,201</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Accretion of convertible debentures</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">3,534</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(3,534)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Convertible debentures issue costs</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(3,272)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">(3,272)</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Issued as compensation</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">3,293</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">22</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">22</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Net loss for the year</font></TD>
   <TD align="right" width="64" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(6,794)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(6,794)</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="64"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><FONT size=2 face="Arial">Balance, December 31, 2003</FONT></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">53,009,851</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">225,154</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">66,735</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">12,752</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(120,543)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">184,098</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Stock-based compensation</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">1,642</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">1,642</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Exercise of stock options</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">717,695</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">9,313</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">(4,415)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">4,898</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Exercise of share purchase warrants</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">540,026</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">2,024</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">(105)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">1,919</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Shares issued for cash</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">3,333,333</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">55,000</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">55,000</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Shares issue costs</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">(180)</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">(180)</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Shares issued on conversion of</font></TD>
   <TD width="64"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="56"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;convertible debentures</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">9,135,043</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">88,848</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">(68,883)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(8,464)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">11,501</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Issued as compensation</font></TD>
   <TD align="right" width="64"><FONT size=2 face="Arial">16,624</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><FONT size=2 face="Arial">245</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">245</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Accretion of convertible debentures</font></TD>
   <TD align="right" width="64"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">2,849</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56"><FONT size=2 face="Arial">(2,849)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Net income for the period</font></TD>
   <TD align="right" width="64" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="44" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="56" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">4,210</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">4,210</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="233" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">Balance, September 30, 2004</FONT></TD>
   <TD align="right" width="64" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">66,752,572</FONT></TD>
   <TD width="11" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="44" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">380,404</FONT></TD>
   <TD width="11" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">701</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">9,874</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="56" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(127,646)</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="6" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">263,333</FONT></TD>
   <TD width="5"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P>
<FONT size=2 face="Arial">See accompanying notes to consolidated financial statements</FONT>
</P>
<P align="center">
<font face="Arial" size="2">11</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_12"></A>

<P style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="3">Pan American Silver Corp.</font>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Notes to consolidated financial statements </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended </FONT>
</P>
<P style="border-bottom: 1 solid #000000; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts
(Unaudited)</FONT>
</P>
<P>
<font face="Arial" size="2">
<B>1.</B>&nbsp;<B>&nbsp;&nbsp;&nbsp;</B> <B>DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS</B>
</font>
</P>
<P>
<FONT size=2 face="Arial">Pan American Silver Corp (the "Company") is engaged in silver mining and related activities, including exploration, extraction, processing, refining and reclamation.  The Company has mining operations in Peru, Mexico and Bolivia, project development activities in Argentina, Mexico and Bolivia, and exploration activities in South America. </FONT>
</P>
<P>
<FONT size=2 face="Arial"> 	The Company completed the acquisition of the Morococha mining assets in central Peru (Note 3) with the effective date July 1, 2004. </FONT>
</P>
<P>
<font face="Arial" size="2">
<B>2.</B>&nbsp;<B>&nbsp;&nbsp;&nbsp;</B> <B>SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B>
</font>
</P>
<P>
<font face="Arial" size="2">These unaudited interim consolidated financial statements are expressed in United
States dollars and are prepared in accordance with accounting principles generally accepted in Canada ("Canadian GAAP"), which are more fully described in the annual audited consolidated financial statements for the year ended December 31, 2003 which is included in the Company&#146;s 2003 Annual Report.  These statements do not include all of the disclosures required by Canadian GAAP for annual financial statements.  Certain comparative figures have been reclassified to conform to the current presentation.</font>
</P>
<P>
<FONT size=2 face="Arial">In management&#146;s opinion, all adjustments necessary for fair presentation have been included in these financial statements. </FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">a) Stock-based compensation</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> During the fourth quarter 2003 the Company changed its accounting policy, retroactive to January 1, 2002,</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> inaccordance with recommendation of CICA 3870, "Stock-based Compensation and Other Stock-based</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> Payments".  Under the amended standards of this Section, the fair value of all stock-based awards granted</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> are estimated using the Black-Scholes model and are recorded in operations over their vesting periods.</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> Previously, the Company used the intrinsic value method for valuing stock-based compensation awards</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> granted to employees, directors and officers where compensation expense was recognized for the excess, if</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> any, of the quoted market price of the Company&#146;s common shares over the common share exercise price on</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> the day that options were granted.  In addition, the Company provided note disclosure of pro forma net loss</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> and pro forma loss per share as if the fair value based method had been used to account for share purchase</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> options granted to employees, directors and officers after January 1, 2002.</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> Using the fair value method for stock-based compensation, the Company recorded an additional charge to</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> earnings of $1,642,000 for the nine months ended September 30, 2004 (nine months ended September 30,</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> 2003 - $2,036,000) for stock options granted to employees, directors and officers.  The fair value of the stock</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> options granted during the nine months ended September 30, 2004 was determined using an option pricing</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> model assuming no dividends were paid, a weighted average volatility of the Company&#146;s share price of 58 per</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> cent, weighted average expected life of 3.5 years and weighted average annual risk free rate of 4.03 per cent.</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">b) Asset retirement obligation </FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> During the fourth quarter of 2003, the Company changed its accounting policy on a retroactive basis with </FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> respect to accounting and reporting for obligations associated with the</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P align="center" style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="2">12</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_13"></A>

<P style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="3">Pan American Silver Corp.</font>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Notes to consolidated financial statements </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended </FONT>
</P>
<P style="border-bottom: 1 solid #000000; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts
(Unaudited)</FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> retirement of long-lived assets that result from the acquisition, construction, development and the normal</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> operation of long-lived assets.  The Company adopted CICA 3110
"Asset Retirement Obligations" whereby</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> the fair value of the liability is initially recorded and the carrying value of the related asset is increased by the</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> corresponding amount. The liability is accreted to its present value and the capitalized cost is amortized over</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> the useful life of the related asset.  The change in accounting policy did not have a significant impact on</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> reported results of operations in any period presented.</FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="2">
<B>3.&nbsp;&nbsp;&nbsp; </B>&nbsp;<B>ACQUISITION OF MOROCOCHA MINING ASSETS</B>
</font>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">In July 2004, the Company acquired 92.0 per cent of
the voting shares (80.8 per cent equity interest) of Compania Minera Argentum
S.A. ("Argentum") and 100 per cent of the voting shares of Compania Minera
Natividad ("Natividad") for cash of $35,276,000. Argentum and Natividad
assets comprise of the Morococha mining assets, its working capital and
surrounding mineral concessions located in central Peru. The Company
subsequently acquired an additional 3.0 per cent equity interest in Argentum by
acquiring 25 per cent its outstanding non-voting investment shares for a cash
payment of $844,000. </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> 	The acquisition was accounted for by the purchase
method of accounting and the accounts of Argentum and Natividad have been
consolidated from July 1, 2004, which was the date the Company acquired
effective control and ownership of the assets and liabilities of the Morococha
mine. </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial"> 	The fair value of assets and liabilities acquired
and the consideration paid are summarized as follows: </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<TABLE width="664" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="561"><FONT size=2 face="Arial">Current assets, including cash of $657</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="76"><FONT size=2 face="Arial">7,945</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><FONT size=2 face="Arial">Plant and equipment</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="76"><FONT size=2 face="Arial">7,053</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Mineral properties</FONT></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="76" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">46,158</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="76"><FONT size=2 face="Arial">61,156</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><FONT size=2 face="Arial">Less:</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="76"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="76"><FONT size=2 face="Arial">(3,215)</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Non-controlling interest</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="76"><FONT size=2 face="Arial">(1,414)</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Provision for asset retirement obligation and reclamation</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="76"><FONT size=2 face="Arial">(8,618)</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Future income tax liability</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="76" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(11,038)</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">Total purchase price</FONT></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="76" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">36,871</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="76"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><FONT size=2 face="Arial">Consideration paid is as follow:</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="76"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="76"><FONT size=2 face="Arial">36,120</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition costs</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="76" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">751</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="561" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="76" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">36,871</FONT></TD>
   <TD width="12"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P>
<FONT size=2 face="Arial">The final allocation of the consideration among the assets and liabilities of the Morococha Mine may vary from those shown above. </FONT>
</P>
<P>
<FONT size=2 face="Arial">The purchase consideration for the mining assets of Argentum and Natividad exceeded the carrying value of the underlying assets for tax purposes by $28,176,000. In addition, the Company recorded a provision for future reclamation and restoration costs in amount of $8,618,000.  These amounts have been applied to increase the carrying value of the mineral properties for accounting purposes.  However, this did not increase the carrying value of the</FONT>
</P>
<P align="center">
<font face="Arial" size="2">13</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_14"></A>

<P style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="3">Pan American Silver Corp.</font>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Notes to consolidated financial statements </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended </FONT>
</P>
<P style="border-bottom: 1 solid #000000; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts
(Unaudited)</FONT>
</P>
<P>
<FONT size=2 face="Arial">underlying assets for tax purposes and resulted in a temporary difference between accounting and tax value. The resulting estimated future income tax liability associated with this temporary difference of $11,038,000 was also applied to increase the carrying value of the mineral properties. </FONT>
</P>
<P>
<font face="Arial" size="2">
<B>4.&nbsp;&nbsp;&nbsp; </B>&nbsp;<B>MINERAL PROPERTY, PLANT AND EQUIPMENT</B>
</font>
</P>
<P>
<FONT size=2 face="Arial"> 	Mineral property, plant and equipment consist of: </FONT>
</P>
<TABLE width="673" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=7 width="214" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">September 30, 2004&nbsp;</font></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="198" align="center" colspan="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">December 31, 2003&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="77" align="center"><FONT size=2 face="Arial">Accumulated</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="33" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="76" align="center"><FONT size=2 face="Arial">Accumulated</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Cost</FONT></TD>
   <TD width="11" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="77" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Amortization</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Net</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="33" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Cost</FONT></TD>
   <TD width="11" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="76" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Amortization</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Net</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><FONT size=2 face="Arial">Mineral properties</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="33"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Morococha mine, Peru</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">9,693</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="9"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(636)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">9,057</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="33"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="66"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;La Colorada mine, Mexico</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">4,153</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(303)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">3,850</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46"><FONT size=2 face="Arial">4,153</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">4,153</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Huaron mine, Peru</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="33" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="11" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">13,847</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(939)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">12,908</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">4,154</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">4,154</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="33"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><FONT size=2 face="Arial">Plant and equipment</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="33"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Morococha mine, Peru</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">7,053</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(463)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">6,590</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="33"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;La Colorada mine, Mexico</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">10,850</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(792)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">10,058</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46"><FONT size=2 face="Arial">10,332</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(360)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">9,972</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Huaron mine, Peru</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">14,417</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(4,423)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">9,994</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46"><FONT size=2 face="Arial">14,417</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(3,426)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">10,991</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Quiruvilca mine, Peru</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">15,410</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(15,410)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46"><FONT size=2 face="Arial">15,410</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(15,410)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Other</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">3,257</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(559)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,698</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">3,161</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(503)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,658</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">50,987</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(21,647)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">29,340</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">43,320</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(19,699)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">23,621</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="33"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><FONT size=2 face="Arial">Mine development and others</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="51"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="33"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="66"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="43"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Morococha mine, Peru</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">502</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(33)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">469</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="33"><font face="Arial" size="2">-</font></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;La Colorada mine, Mexico</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">35,846</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(2,615)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">33,231</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46"><FONT size=2 face="Arial">31,892</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(1,113)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">30,779</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Huaron mine, Peru</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51"><FONT size=2 face="Arial">36,333</FONT></TD>
   <TD width="11"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(10,071)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">26,262</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46"><FONT size=2 face="Arial">32,820</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66"><FONT size=2 face="Arial">(7,800)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43"><FONT size=2 face="Arial">25,020</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Quiruvilca mine, Peru</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">10,151</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(10,046)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">105</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">10,046</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(10,046)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="51" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">82,832</FONT></TD>
   <TD width="11" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(22,765)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">60,067</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="46" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">74,758</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="66" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(18,959)</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="43" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">55,799</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="207" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="51" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">147,666</FONT></TD>
   <TD width="11" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="9" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="66" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(45,351)</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">102,315</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" colspan=2 width="46" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">122,232</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="66" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(38,658)</FONT></TD>
   <TD width="10" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="43" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">83,574</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P>
&nbsp;
</P>
<P>
<FONT size=2 face="Arial">The Company completed the purchase of 83.78 per cent equity interest in Compania Minera Argentum S.A. and 100 per cent equity interest in Compania Minera Natividad for $36,871,000 (Note 3). </FONT>
</P>
<P>
<font face="Arial" size="2">
<B>5.</B>&nbsp;<B>&nbsp;&nbsp;&nbsp;</B> <B>INVESTMENT AND OTHER NON-PRODUCING PROPERTIES</B></font>
</P>
<P>
<FONT size=2 face="Arial"> 	Acquisition costs of mineral development properties together with costs directly related to mine development expenditures are deferred.  Exploration expenditures on investment properties are charged to operations in the period they are incurred. </FONT>
</P>
<P align="center">
<font face="Arial" size="2">14</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_15"></A>

<P style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="3">Pan American Silver Corp.</font>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Notes to consolidated financial statements </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended </FONT>
</P>
<P style="border-bottom: 1 solid #000000; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts
(Unaudited)</FONT>
</P>
<P>
<FONT size=2 face="Arial">Investment and non-producing properties consist of:</FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="65%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="15%" align="right"><FONT size=2 face="Arial">September 30</FONT></TD>
   <TD width="3%" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="13%" align="right"><FONT size=2 face="Arial">December 31</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="3%" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" align="right"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Non-producing properties</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Morococha, Peru</font></TD>
   <TD align="center" width="2%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">36,465</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="2%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="12%"><font face="Arial" size="2">-</font></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Alamo Dorado, Mexico</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">81,061</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">80,076</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manantial
    Espejo, Argentina</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,012</FONT></TD>
   <TD width="3%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2,012</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">119,538</FONT></TD>
   <TD width="3%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">82,088</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Investment properties</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Waterloo, USA</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%"><FONT size=2 face="Arial">1,000</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">1,000</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tres Cruces, Hog Heaven and others</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">785</FONT></TD>
   <TD width="3%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">785</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="13%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1,785</FONT></TD>
   <TD width="3%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">1,785</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="2%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="13%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">121,323</FONT></TD>
   <TD width="3%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="2%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="12%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">83,873</FONT></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="65%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="3%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE>
<P>
<B><FONT size=2 face="Arial">6.&nbsp;&nbsp;&nbsp; </FONT></B><font face="Arial" size="2"><B>SHARE CAPITAL</B></font>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">During the nine-month period ended September 30, 2004, the Company:</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">i)&nbsp;&nbsp;&nbsp;&nbsp; issued 9,135,043 common shares at a value of $88,848,000 to the holders of $85,431,000 principal </FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">amount, senior subordinated convertible debentures on conversion;</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">ii)&nbsp;&nbsp;&nbsp;&nbsp; issued 3,333,333 common shares at $16.50 per share, for net proceeds of $54,820,000;</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">iii)&nbsp;&nbsp;&nbsp;&nbsp; issued 717,695 common shares for proceeds of $4,898,000 in connection with the exercise of</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">employees</FONT> <FONT size=2 face="Arial">and directors stock options;</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">iv)&nbsp;&nbsp;&nbsp;&nbsp; issued 540,026 common shares for proceeds of $1,919,000 in connection with the exercise of share</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">purchase warrants; and</FONT>
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
&nbsp;
</P>
<P style="text-indent: 36; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">v)&nbsp;&nbsp;&nbsp;&nbsp; issued 16,624 common shares at a value of $245,000 as compensation expense. </FONT>
</P>
<P align="center">
<font face="Arial" size="2">15</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_16"></A>

<P style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="3">Pan American Silver Corp.</font>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Notes to consolidated financial statements </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended </FONT>
</P>
<P style="border-bottom: 1 solid #000000; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts
(Unaudited)</FONT>
</P>
<P>
<FONT size=2 face="Arial">The following table summarizes information concerning stock options outstanding as at September 30, 2004: </FONT>
</P>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=3 width="34%" style="border-bottom: 1 solid #000000">
    <p align="center"><FONT size=2 face="Arial">Options Outstanding</FONT></p>
   </TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="28%" style="border-bottom: 1 solid #000000">
    <p align="center"><FONT size=2 face="Arial">Options Exercisable</FONT></p>
   </TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="14%"><FONT size=2 face="Arial">Weighted</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="14%"><FONT size=2 face="Arial">Average</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="6%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="18%"><FONT size=2 face="Arial">Number</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="14%"><FONT size=2 face="Arial">Remaining</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="18%"><FONT size=2 face="Arial">Number</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="7%"><FONT size=2 face="Arial">Weighted</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%"><FONT size=2 face="Arial">Year</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="18%"><FONT size=2 face="Arial">Outstanding as</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="14%"><FONT size=2 face="Arial">Contractual</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="18%"><FONT size=2 face="Arial">Exercisable as</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="7%"><FONT size=2 face="Arial">Average</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="22%" align="center" colspan="4"><FONT size=2 face="Arial">Range of</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%"><FONT size=2 face="Arial">of</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="18%"><FONT size=2 face="Arial">at September</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="14%"><FONT size=2 face="Arial">Life</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="18%"><FONT size=2 face="Arial">at September</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="7%"><FONT size=2 face="Arial">Exercise</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD colspan=4 width="22%" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Exercise Prices</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Expiry</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="18%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">30, 2004</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="14%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(months)</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="18%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">30, 2004</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="7%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Price</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="22%" colspan="4" align="center"><font face="Arial" size="2">&nbsp;$3.61</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">36</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="14%"><FONT size=2 face="Arial">.07</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">36</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="6%"><FONT size=2 face="Arial">3.61</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="22%" colspan="4" align="center"><font face="Arial" size="2">&nbsp;$9.51</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%"><FONT size=2 face="Arial">2005</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">48,077</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="14%"><FONT size=2 face="Arial">5.03</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">48,077</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="6%"><FONT size=2 face="Arial">9.51</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD align="center" width="22%" colspan="4"><FONT size=2 face="Arial">$3.96 - $7.73</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%"><FONT size=2 face="Arial">2006</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">124,666</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="14%"><FONT size=2 face="Arial">19.42</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">88,000</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="6%"><FONT size=2 face="Arial">5.07</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD align="center" width="22%" colspan="4"><FONT size=2 face="Arial">$7.93 - $8.01</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%"><FONT size=2 face="Arial">2007</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">385,000</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="14%"><FONT size=2 face="Arial">37.83</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">351,000</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="6%"><FONT size=2 face="Arial">7.95</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD align="center" width="22%" colspan="4"><FONT size=2 face="Arial">$7.05 - $11.44</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%"><FONT size=2 face="Arial">2008</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">494,231</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="14%"><FONT size=2 face="Arial">45.44</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">169,231</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="6%"><FONT size=2 face="Arial">7.93</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD align="center" width="22%" colspan="4"><FONT size=2 face="Arial">$13.08 - $17.84</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%"><FONT size=2 face="Arial">2009</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">382,000</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="14%"><FONT size=2 face="Arial">53.31</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%"><FONT size=2 face="Arial">142,000</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="6%"><FONT size=2 face="Arial">15.58</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="22%" colspan="4" style="border-bottom: 1 solid #000000">
    <p align="center"><font face="Arial" size="2">&nbsp;$3.96</font></p>
   </TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2010</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">217,000</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="14%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">74.53</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">217,000</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="6%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">3.96</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="1%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="18%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">1,651,010</FONT></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="14%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">49.01</FONT></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="18%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">1,015,344</FONT></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="6%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">9.01</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P>
<FONT size=2 face="Arial">During the nine months ended September 30, 2004, the Company recognized $1,642,000 of stock compensation expense consisting of $831,000 for options issued in 2004 and $811,000 for options issued in 2003. </FONT>
</P>
<P>
<FONT size=2 face="Arial"> 	As at September 30, 2004 there were warrants outstanding to allow the holders to purchase 3,814,470 common shares of the Company at Cdn$12.00 per share, which expire on February 20, 2008. </FONT>
</P>
<P>
<FONT size=2 face="Arial"> 	Subsequent to September 30, 2004, the Company issued 7,000 common shares for proceeds of $63,600 pursuant to exercise of employee stock options. </FONT>
</P>
<P>
<font face="Arial" size="2">
<B>7.&nbsp;&nbsp;&nbsp; </B>&nbsp;<B>INTEREST AND OTHER INCOME</B>
</font>
</P>
<P>
<FONT size=2 face="Arial"> 	Interest and other income consist of: </FONT>
</P>
<div align="center">
  <center>
<TABLE width="661" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="381"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="105" align="center"><FONT size=2 face="Arial">Three months</FONT></TD>
   <TD width="17" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="113" align="center"><font face="Arial" size="2">Nine months&nbsp;</font></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="103" align="center"><font face="Arial" size="2">ended&nbsp;</font></TD>
   <TD width="17" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="113" align="center"><font face="Arial" size="2">ended&nbsp;</font></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="105" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">September 30,</FONT></TD>
   <TD width="17" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="113" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">September 30,&nbsp;</font></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="37" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="17" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="37" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="17" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="16" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="36" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="37"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="37"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="50"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="16"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="36"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381"><FONT size=2 face="Arial">Revenue from third party</FONT></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="37"><FONT size=2 face="Arial">554</FONT></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="37" align="right"><FONT size=2 face="Arial">239</FONT></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">780</FONT></TD>
   <TD width="16"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="36" align="right"><FONT size=2 face="Arial">546</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381"><FONT size=2 face="Arial">Power credits</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="37"><FONT size=2 face="Arial">25</FONT></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="37" align="right"><FONT size=2 face="Arial">14</FONT></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">111</FONT></TD>
   <TD width="16"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="36" align="right"><FONT size=2 face="Arial">42</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381"><FONT size=2 face="Arial">Gain on sale of marketable securities</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="37"><FONT size=2 face="Arial">226</FONT></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="37" align="right"><font face="Arial" size="2">-</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50"><FONT size=2 face="Arial">475</FONT></TD>
   <TD width="16"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="36" align="right"><font face="Arial" size="2">-</font></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Other revenue and expenses</FONT></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="37" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">40</FONT></TD>
   <TD width="17" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="37" align="right" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">17</FONT></TD>
   <TD width="17" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="50" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">33</FONT></TD>
   <TD width="16" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="36" align="right" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(80)</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="381" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="37" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">845</FONT></TD>
   <TD width="17" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="37" align="right" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">270</FONT></TD>
   <TD width="17" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="50" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">1,399</FONT></TD>
   <TD width="16" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="36" align="right" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">508</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE></center>
</div>
<P>
&nbsp;
</P>
<P align="center">
<font face="Arial" size="2">16</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_17"></A>

<P style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="3">Pan American Silver Corp.</font>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Notes to consolidated financial statements </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended </FONT>
</P>
<P style="border-bottom: 1 solid #000000; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts
(Unaudited)</FONT>
</P>
<P>
<font face="Arial" size="2">
<B>8.</B>&nbsp;<B>&nbsp;&nbsp;&nbsp;</B> <B>SUPPLEMENTAL CASH FLOW INFORMATION</B>
</font>
</P>
<div align="center">
  <center>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="51%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="21%" align="center"><FONT size=2 face="Arial">Three months ended</FONT></TD>
   <TD width="2%" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="22%" align="center"><FONT size=2 face="Arial">Nine months ended</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="21%" align="center"><FONT size=2 face="Arial">September 30,</FONT></TD>
   <TD width="2%" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="22%" align="center"><FONT size=2 face="Arial">September 30,</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="2%" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="2%" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10%" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="2%" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Changes in non-cash working capital</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term investments</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="9%"><FONT size=2 face="Arial">(475)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="9%"><font face="Arial" size="2">-</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="10%"><FONT size=2 face="Arial">(475)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="9%" align="right"><font face="Arial" size="2">-</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="9%"><FONT size=2 face="Arial">(2,270)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="9%"><FONT size=2 face="Arial">1,032</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="Arial">(5,047)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%" align="right"><FONT size=2 face="Arial">(695)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="9%"><FONT size=2 face="Arial">(212)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="9%"><FONT size=2 face="Arial">229</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="Arial">803</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%" align="right"><FONT size=2 face="Arial">(1,807)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaids expenses</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="9%"><FONT size=2 face="Arial">(1,260)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="9%"><FONT size=2 face="Arial">44</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="10%"><FONT size=2 face="Arial">(1,241)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%" align="right"><FONT size=2 face="Arial">909</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="9%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,359)</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="9%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(2,109)</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="10%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(5,812)</FONT></TD>
   <TD width="2%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9%" align="right" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(1,476)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="51%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="9%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(6,576)</FONT></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="9%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(804)</FONT></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="10%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(11,772)</FONT></TD>
   <TD width="2%" style="border-bottom: 3 double #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD width="9%" align="right" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">(3,069)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
   <TD><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE></center>
</div>
<P>
&nbsp;
</P>
<P>
<B><FONT size=2 face="Arial">9.&nbsp;&nbsp;&nbsp; SEGMENTED INFORMATION</FONT></B>
</P>
<P>
<FONT size=2 face="Arial">Substantially all of the Company&#146;s operations are within the mining sector, conducted through operations in six countries.  Due to differences between mining and exploration activities, the Company has a separate budgeting process and measures the results of operations and exploration activities independently.  The Corporate office provides financial, human resources and technical support to its mining and exploration activities. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Segmented disclosures and enterprise-wide information are as follows: </FONT>
</P>
<TABLE width="662" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=10 width="351" style="border-bottom: 1 solid #000000">
    <p align="center"><FONT size=2 face="Arial">For the three months ended September 30, 2004</FONT></p>
   </TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="78"><FONT size=2 face="Arial">Corporate</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="96"><FONT size=2 face="Arial">Exploration &amp;</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Mining</FONT></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="69" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Office</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="96" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Development</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Total</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Revenue from external customers</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="65"><FONT size=2 face="Arial">27,409</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="69"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="17"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="77"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">27,409</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Net income (loss) for the period</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="65"><FONT size=2 face="Arial">5,004</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="69"><FONT size=2 face="Arial">(1,109)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="77"><FONT size=2 face="Arial">(606)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">3,289</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="69"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="77"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=10 width="351"><FONT size=2 face="Arial">For the three months ended September 30, 2003</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="337" colspan="10" align="center">
    <p align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;(Note 2)</font></p>
   </TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="69"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="96"></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="78" align="center"><FONT size=2 face="Arial">Corporate</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="94" colspan="2" align="center"><font face="Arial" size="2">&nbsp;Exploration
    &amp;</font></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Mining</FONT></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="69" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Office</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="96" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Development</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="63" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Total</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Revenue from external customers</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="65"><FONT size=2 face="Arial">11,838</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="69"><FONT size=2 face="Arial">52</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="17"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="77"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">11,890</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Net income (loss) for the period</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="65"><FONT size=2 face="Arial">655</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="69"><FONT size=2 face="Arial">(1,641)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="77"><FONT size=2 face="Arial">(239)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">(1,225)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="69"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="77"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=10 width="351" style="border-bottom: 1 solid #000000">
    <p align="center"><FONT size=2 face="Arial">For the nine months ended September 30, 2004</FONT></p>
   </TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="78" align="center"><FONT size=2 face="Arial">Corporate</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="96"><FONT size=2 face="Arial">Exploration &amp;</FONT></TD>
   <TD width="10" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="63" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="65" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Mining</FONT></TD>
   <TD width="8" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="69" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Office</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="96" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Development</FONT></TD>
   <TD width="10" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="63" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Total</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Revenue from external customers</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="65"><FONT size=2 face="Arial">63,510</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="69"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="17"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="77"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">63,510</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Net income (loss) for the period</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="65"><FONT size=2 face="Arial">12,022</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="69"><FONT size=2 face="Arial">(5,758)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="77"><FONT size=2 face="Arial">(2,054)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">4,210</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="286"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Segmented assets</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="65"><FONT size=2 face="Arial">178,991</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="69"><FONT size=2 face="Arial">72,382</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="17"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="77"><FONT size=2 face="Arial">90,575</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="63"><FONT size=2 face="Arial">341,948</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P align="center">
<font face="Arial" size="2">17</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_18"></A>

<P style="margin-top: 0; margin-bottom: 0">
<font face="Arial" size="3">Pan American Silver Corp.</font>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">Notes to consolidated financial statements </FONT>
</P>
<P style="margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">As at September 30, 2004 and 2003 and for the three and nine month periods then ended </FONT>
</P>
<P style="border-bottom: 1 solid #000000; margin-top: 0; margin-bottom: 0">
<FONT size=2 face="Arial">(Tabular amounts are in thousands of US dollars, except for shares, price per share and per share amounts
(Unaudited)</FONT>
</P>
<p>&nbsp;</p>
<TABLE width="662" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="283"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=10 width="343">
    <p align="center"><FONT size=2 face="Arial">For the nine months ended September 30, 2003</FONT></p>
   </TD>
   <TD width="21"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="283"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="329" colspan="10">
    <p align="center" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;(Note 2)&nbsp;</font></p>
   </TD>
   <TD width="21"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="283"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="58"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="4"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="70"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="94"></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="68"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="21"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="283"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="58"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="4"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="79"><FONT size=2 face="Arial">Corporate</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=2 width="94"><FONT size=2 face="Arial">Exploration
    &amp;</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="68"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="21"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="283" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="58" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Mining</FONT></TD>
   <TD width="4" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="70" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Office</FONT></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="94" align="center" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Development</FONT></TD>
   <TD width="10" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="68" style="border-bottom: 1 solid #000000">
    <p align="center"><FONT size=2 face="Arial">Total</FONT></p>
   </TD>
   <TD width="21"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="283"><FONT size=2 face="Arial">Revenue from external customers</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="58"><FONT size=2 face="Arial">31,905</FONT></TD>
   <TD width="4"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="70"><FONT size=2 face="Arial">360</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="10"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="82"><font face="Arial" size="2">-</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="68"><FONT size=2 face="Arial">32,265</FONT></TD>
   <TD width="21"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="283"><FONT size=2 face="Arial">Net income (loss) for the period</FONT></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="58"><FONT size=2 face="Arial">333</FONT></TD>
   <TD width="4"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="7"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="70"><FONT size=2 face="Arial">(3,457)</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="82"><FONT size=2 face="Arial">(848)</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="68"><FONT size=2 face="Arial">(3,972)</FONT></TD>
   <TD width="21"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="283"><FONT size=2 face="Arial">Segmented assets</FONT></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="58"><FONT size=2 face="Arial">92,611</FONT></TD>
   <TD width="4"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="7"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="70"><FONT size=2 face="Arial">91,696</FONT></TD>
   <TD width="8"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="10"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="82"><FONT size=2 face="Arial">86,403</FONT></TD>
   <TD width="10"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="8"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="68"><FONT size=2 face="Arial">270,710</FONT></TD>
   <TD width="21"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE><P align="center">
<font face="Arial" size="2">18</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_19"></A>

<P align="center">
<B><font face="Arial" size="4">Third Quarter 2004 Management&#146;s Discussion and Analysis</font></B>
</P>
<P>
<FONT size=2 face="Arial">Management&#146;s discussion and analysis ("MD&amp;A") focuses on significant factors that affected Pan American Silver Corp.&#146;s and its subsidiaries&#146; ("Pan American" or the
"Company") performance and such factors that may affect its future performance.  The MD&amp;A should be read in conjunction with the unaudited consolidated financial statements for the three months and nine months ended September 30, 2004 and the related notes contained herein.  Tabular amounts are in thousands of US dollars, except for per share amounts. </FONT>
</P>
<P>
<FONT size=2 face="Arial">The significant accounting policies are outlined within Note 2 to the Consolidated Financial Statements of the Company for the year ended December 31, 2003. These accounting policies have been applied consistently for the nine months ended September 30, 2004. </FONT>
</P>
<P>
<B><FONT size=2 face="Arial">Significant Events and Transactions of the Third Quarter </FONT></B>
</P>
<P>
<FONT size=2 face="Arial">The Company completed its acquisition of 92 per cent of the voting shares of Compania Minera Argentum ("Argentum"), a public company listed on the Peru Stock Exchange, which holds the Morococha mining assets previously owned by Sociedad Minera Corona.  The Argentum shares were purchased for $33.78 million by way of a public offering through the Lima Stock Exchange.  This gave Pan American an 81 per cent direct interest in Argentum.  Subsequent to this offer, the Company purchased an additional 3 per cent interest in Argentum by acquiring 25 per cent of the investment shares for $0.84 million. In addition, Pan American acquired 100 per cent of Compania Minera Natividad ("Natividad") for $1.5 million, which holds numerous adjacent mineral concessions and the Amistad processing facility.  The Company intends to combine Natividad and Argentum in the near future. The statements of operations and balance sheets of Argentum and Natividad have been incorporated into Pan American&#146;s cons
olidated financial statements from July 1, 2004. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Argentum and Natividad (collectively "Morococha") contributed 694,564 ounces of silver to Pan American&#146;s production in the third quarter of 2004 at a cash cost of $3.52 per ounce. Over the longer term Morococha is expected to produce 3.5 million ounces of silver annually at a cash cost of less than $3.00 per ounce. </FONT>
</P>
<P>
<FONT size=2 face="Arial">The fair value of assets and liabilities acquired through the acquisition of Morococha are summarized as follows: </FONT>
</P>
<div align="center">
  <center>
<TABLE width="100%" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="84%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">(US$000)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><FONT size=2 face="Arial">Cash</FONT></TD>
   <TD align="center" width="1%"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">657</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><FONT size=2 face="Arial">Accounts receivable</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">4,364</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><FONT size=2 face="Arial">Inventory</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">2,878</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><FONT size=2 face="Arial">Prepaid expenses</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">46</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><FONT size=2 face="Arial">Plant and equipment</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">7,053</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">Mineral properties</FONT></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">46,158</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><FONT size=2 face="Arial">Total assets</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">61,156</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><FONT size=2 face="Arial">Less:</FONT></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="12%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">(3,215)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Non-controlling interest</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">(1,414)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Provision for asset retirement obligation and reclamation</font></TD>
   <TD width="1%"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%"><FONT size=2 face="Arial">(8,618)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;&nbsp;&nbsp;Future income tax liability</font></TD>
   <TD width="1%" style="border-bottom: 1 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="12%" style="border-bottom: 1 solid #000000"><FONT size=2 face="Arial">(11,038)</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
<TR>
   <TD width="84%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">Total purchase price</FONT></TD>
   <TD align="center" width="1%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">$</FONT></TD>
   <TD align="right" width="12%" style="border-bottom: 3 double #000000"><FONT size=2 face="Arial">36,871</FONT></TD>
   <TD width="2%"><font face="Arial" size="2">&nbsp;</font></TD>
</TR>
</TABLE></center>
</div>
<P>
<FONT size=2 face="Arial">The future income tax liability arises due to the fact that the purchase consideration exceeded the carrying value of the mining assets for tax purposes, resulting in a temporary difference between the accounting and tax value.  The estimated future income tax liability associated with this temporary difference is $11.04 million and has been recognized as a future income tax liability and also applied to increase the carrying value of the mineral properties. </FONT>
</P>
<P align="center">
<font face="Arial" size="2">19</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_20"></A>

<P>
<FONT size=2 face="Arial">The provision for asset retirement obligation and reclamation of $8.62 million arises pursuant to CICA Handbook Section 3110 &#150;
"Accounting for Asset Retirement Obligations", which required the Company to recognize the expected fair value of future site restoration costs at Morococha as a liability and to increase the carrying value of mineral properties by the same amount.  The liability is accreted over time to its anticipated future value with a corresponding charge to the statement of operations while the increase in the carrying value of mineral properties is amortized on a unit of production basis. </FONT>
</P>
<P>
<FONT size=2 face="Arial">The La Colorada mine in Mexico reached commercial production on January 1, 2004 after a $20 million expansion, which began in late 2002.  As such, all revenue and expense items were recognized in the statement of operations in the first nine months of 2004, having been capitalized throughout 2003. This change in accounting treatment gives rise to several significant differences when comparing the consolidated statement of operations for the third quarter of 2004 with the corresponding period in 2003.</FONT>
</P>
<P>
<B><FONT size=2 face="Arial">Results of Operations</FONT></B>
</P>
<P>
<FONT size=2 face="Arial">For the three months ended September 30, 2004 the Company&#146;s net income was $3.29 million (earnings per share of $0.05) compared to a net loss of $1.23 million (loss per share of $0.02) for the corresponding period in 2003.  The Company generated net income of $4.21 million for the nine-month period ended September 30, 2004 compared to a loss of $3.97 million for the corresponding period in 2003.  The loss per share of ($0.11) for the nine months ended September 30, 2004 includes charges associated with the conversion and accretion of the Company&#146;s 5.25 per cent convertible unsecured senior subordinated debentures (the
"Debentures"), which occurred in the second quarter of 2004 and were charged directly to deficit.</FONT>
</P>
<P>
<FONT size=2 face="Arial">Revenue from metal sales was 131 per cent higher in the third quarter of 2004 and 97 per cent higher in the first nine months of 2004 compared to the corresponding periods in 2003.  The acquisition of the Morococha mine and the La Colorada mine reaching commercial production on January 1, 2004, accounted for most of the revenue increase from a year ago.  The Company&#146;s other mining operations recorded a 37 per cent increase in revenue in the third quarter of 2004 compared to the comparable period in 2003 as a result of higher metal prices and in spite of the fact that less tonnes of concentrate were sold in the third quarter of 2004. </FONT>
</P>
<P>
<FONT size=2 face="Arial">The Company continued the trend of improving operating profits in the third quarter of 2004.  Operating profit is the difference between revenue and cash operating costs.  In the third quarter of 2004 operating profits were $8.9 million, up from $4.4 million in the second quarter of 2004 and from $1.7 million in the comparable quarter of 2003.  As reflected in the following table, the third quarter of 2004 represents the eighth consecutive quarter that the Company has improved its operating profit.  Steadily improving operating profit has helped the Company record its second consecutive quarter of positive net earnings. Partially offsetting the improved operating profits were increases in depreciation and amortization, exploration and general and administrative charges, reflecting the increased activity levels of a growing enterprise. The table below sets out select quarterly results for the past eleven quarters. </FONT>
</P>
<P align="center">
<font face="Arial" size="2">20</font>
</P>
<HR noshade align="center" width="100%" size=2>
<A name="page_21"></A>

<TABLE width="571" border=0 cellspacing=0 cellpadding=0>
<TR>
   <TD width="44" align="center" style="border-left: 2 solid #000000; border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center" style="border-left: 2 solid #000000; border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="10" align="center" style="border-left: 2 solid #000000; border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="68" align="center" style="border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="14" align="center" style="border-left: 2 solid #000000; border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17" align="center" style="border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17" align="center" style="border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13" align="center" style="border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="32" align="center" style="border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="13" align="center" style="border-left: 2 solid #000000; border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="78" align="center" style="border-top: 2 solid #000000"><B><FONT size=2 face="Arial">Net income</FONT></B></TD>
   <TD width="111" align="center" style="border-left: 2 solid #000000; border-right: 2 solid #000000; border-top: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9" align="center"></TD>
</TR>
<TR>
   <TD width="44" align="center" style="border-left: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" width="119" style="border-left: 2 solid #000000"><B><FONT size=2 face="Arial">Quarter</FONT></B></TD>
   <TD width="10" align="center" style="border-left: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="68" align="center"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="14" align="center" style="border-left: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="center" colspan=4 width="85"><B><FONT size=2 face="Arial">Operating</FONT></B></TD>
   <TD width="13" align="center" style="border-left: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="78" align="center"><B><FONT size=2 face="Arial">(loss) for the</FONT></B></TD>
   <TD align="center" width="111" style="border-left: 2 solid #000000; border-right: 2 solid #000000"><B><FONT size=2 face="Arial">Net loss</FONT></B></TD>
   <TD align="center" width="9"></TD>
</TR>
<TR>
   <TD width="44" align="center" style="border-left: 2 solid #000000; border-bottom: 2 solid #000000"><B><FONT size=2 face="Arial">Year</FONT></B></TD>
   <TD align="center" width="119" style="border-left: 2 solid #000000; border-bottom: 2 solid #000000"><font face="Arial" size="2"><B>(</B><I>unaudited)</I></font></TD>
   <TD colspan=2 width="80" align="center" style="border-left: 2 solid #000000; border-bottom: 2 solid #000000"><B><FONT size=2 face="Arial">Revenue</FONT></B></TD>
   <TD width="14" align="center" style="border-left: 2 solid #000000; border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=4 width="81" align="center" style="border-bottom: 2 solid #000000"><font face="Arial" size="2"><B>Profit</B>
    (1)</font></TD>
   <TD width="13" align="center" style="border-left: 2 solid #000000; border-bottom: 2 solid #000000"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD colspan=2 width="78" align="center" style="border-bottom: 2 solid #000000"><B><FONT size=2 face="Arial">period</FONT></B></TD>
   <TD align="center" width="111" style="border-left: 2 solid #000000; border-right: 2 solid #000000; border-bottom: 2 solid #000000"><B><FONT size=2 face="Arial">per share</FONT></B></TD>
   <TD align="center" width="9"></TD>
</TR>
<TR>
   <TD align="center" width="44"><FONT size=2 face="Arial">2004</FONT></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">Sept. 30</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$27,409</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD align="right" colspan=3 width="66"><FONT size=2 face="Arial">$8,883</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"></TD>
   <TD align="right" width="67"><FONT size=2 face="Arial">$3,289</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">$0.05</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">June 30</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$20,950</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD align="right" colspan=3 width="66"><FONT size=2 face="Arial">$4,419</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"></TD>
   <TD align="right" width="67"><FONT size=2 face="Arial">$1,287</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.12) (2)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">March 31</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$15,151</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD align="right" colspan=3 width="66"><FONT size=2 face="Arial">$3,983</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="67"><FONT size=2 face="Arial">($366)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.05) (2)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD align="center" width="44"><FONT size=2 face="Arial">2003</FONT></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">Dec. 31</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$12,857</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD align="right" colspan=3 width="66"><FONT size=2 face="Arial">$2,041</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="78"><FONT size=2 face="Arial">($4,858)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.15)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">Sept. 30</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$11,890</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD align="right" colspan=3 width="66"><FONT size=2 face="Arial">$1,690</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="9"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="67"><FONT size=2 face="Arial">($390)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.01)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">June 30</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$12,553</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD align="right" colspan=3 width="66"><FONT size=2 face="Arial">$1,220</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="78"><FONT size=2 face="Arial">($1,156)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.02)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">March 31</FONT></TD>
   <TD width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$7,822</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="32"><FONT size=2 face="Arial">$393</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="78"><FONT size=2 face="Arial">($1,573)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.03)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD align="center" width="44"><FONT size=2 face="Arial">2002</FONT></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">Dec. 31</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$12,084</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="32"><FONT size=2 face="Arial">$379</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="78"><FONT size=2 face="Arial">($14,040)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.35)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">Sept. 30</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$11,195</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=4 width="85"><FONT size=2 face="Arial">($252)</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="78"><FONT size=2 face="Arial">($17,387)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.40)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">June 30</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$11,615</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="32"><FONT size=2 face="Arial">$808</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="78"><FONT size=2 face="Arial">($1,247)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.03)</FONT></TD>
   <TD width="9"></TD>
</TR>
<TR>
   <TD width="44"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="119" align="center"><FONT size=2 face="Arial">March 31</FONT></TD>
   <TD align="center" width="10"></TD>
   <TD align="center" width="68"><FONT size=2 face="Arial">$10,199</FONT></TD>
   <TD width="14"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD width="17"></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" width="32"><FONT size=2 face="Arial">$997</FONT></TD>
   <TD width="13"><font face="Arial" size="2">&nbsp;</font></TD>
   <TD align="right" colspan=2 width="78"><FONT size=2 face="Arial">($1,303)</FONT></TD>
   <TD width="111" align="right"><FONT size=2 face="Arial">($0.03)</FONT></TD>
   <TD width="9"></TD>
</TR>
</TABLE><TABLE width="585">
<TR>
   <TD valign="top" width="20">
    <p style="margin-top: 0; margin-bottom: 0"><font face="Arial" size="2">(1)&nbsp;&nbsp;</font></p>
   </TD>
   <TD valign="top" width="551">
    <p style="margin-top: 0; margin-bottom: 0"><FONT size=2 face="Arial">Operating Profit/(Loss) is equal to total revenues less direct mine operating expenses</FONT></p>
   </TD>
</TR>
<TR>
   <TD valign="top" width="20">
    <p style="margin-top: 0; margin-bottom: 0"><font face="Arial" size="2">(2)&nbsp;&nbsp;</font></p>
   </TD>
   <TD valign="top" width="551">
    <p style="margin-top: 0; margin-bottom: 0"><FONT size=2 face="Arial">Includes charges associated with the early conversion and accretion of the Debentures</FONT></p>
   </TD>
</TR>
</TABLE>
<P>
<FONT size=2 face="Arial">Depreciation and amortization charges for the third quarter increased significantly to $3.03 million from $0.43 million a year before.  The purchase of Morococha and the achievement of commercial production at La Colorada are the principal reasons for this increase.  Depreciation and amortization have also increased as a direct result of the Company&#146;s adoption of CICA Handbook Section 3110 &#150;
"Accounting for Asset Retirement Obligations", which required the Company to increase its asset carrying values by $7.9 million as at December 31, 2003.  The amortization of these higher asset values on a unit of production basis has resulted in increased depreciation charges.</FONT>
</P>
<P>
<FONT size=2 face="Arial">General and administration ("G &amp; A") costs for the three-month period ended September 30, 2004 were $0.93 million, up from $0.57 million for the comparable quarter in 2003.  G &amp; A costs have increased significantly in 2004 from previous years, which is a reflection of the expansion of the Company&#146;s management team necessary to execute the Company&#146;s growth plans, and to a lesser extent a stronger Canadian dollar.</FONT>
</P>
<P>
<FONT size=2 face="Arial">The Company recognized a $0.52 million stock-based compensation expense in the third quarter of 2004, as a result of adopting CICA Handbook Section 3870 &#150;
"Stock-Based Compensation" in the fourth quarter of 2003. On a restated basis, the comparable expense recorded in the quarter ended September 30, 2003 was $0.84 million.</FONT>
</P>
<P>
<FONT size=2 face="Arial">Reclamation expense of $0.30 million in the third quarter of 2004 related to the accretion of the liability that the Company recognized by adopting CICA Handbook Section 3110 &#150;
"Accounting for Asset Retirement Obligations" as at December 31, 2003.      Aside from those restoration costs associated with the Morococha mine, there has been no change to the Company&#146;s expectations of future site restoration costs during the quarter at any of its other mines. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Higher exploration and development expenses were recorded for the three-month and nine-month periods of 2004 relative to 2003 primarily as a result of the Company&#146;s active development program at Manantial Espejo. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Interest and other income represented net income received from the San Vicente operation and interest received from the cash balances the Company maintained during the quarter, which were substantially higher than a year ago primarily due to the proceeds of the Debentures, together with the equity financing completed in March 2004. </FONT>
</P>
<P align="center">
<font face="Arial" size="2">21</font>
</P>
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<A name="page_22"></A>

<P>
<B><FONT size=2 face="Arial">Production</FONT></B>
</P>
<P>
<FONT size=2 face="Arial">Pan American produced 3,173,000 ounces of silver in the third quarter of 2004, a 45 per cent increase from the corresponding period in 2003.  The acquisition of the Morococha mine accounts for 32 per cent of the increase, with significant increases at La Colorada and the San Vicente operation responsible for the balance.  The Quiruvilca mine maintained its strong performance by producing more ounces than a year ago at much lower cash costs per ounce.  The Huaron mine continued to improve on a challenging first quarter by recording higher silver production than in the third quarter of 2003 at a cash cost of $3.87 per ounce.  The Company&#146;s Pyrite Stockpile operation was again profitable, producing 231,115 ounces of silver during the quarter at cash costs of $2.87 per ounce.</FONT>
</P>
<P>
<FONT size=2 face="Arial">While production rates at the La Colorada mine are steadily increasing, as expected the mine was not able to cover its cash operating costs in the third quarter. A revised mining and processing plan has been developed and implemented to address the major issues that have hampered the mine since the start of commercial production at the beginning of 2004.  The primary component of the plan was a switch to a more selective narrow vein mining method, which has decreased tonnes mined but substantially increased ore grades reported to the mill.  In addition, the Company plans to further expand the reserve and resource base at the mine and to provide greater development flexibility in the future. The Company still expects La Colorada to achieve an annualized production rate of 3.5 million ounces at cash costs of less than $3.50 per ounce; however, the Company now believes these levels will be reached in the first quarter of 2005. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Consolidated cash costs for the nine-month period ended September 30, 2004 were $4.01 per ounce compared to $4.12 per ounce for the corresponding period of 2003. During this period, cash costs improved significantly at Quiruvilca, were stable at Huaron but were offset by higher than expected costs at La </FONT>
</P>
<P>
<FONT size=2 face="Arial">Colorada.  With the addition of the low-cost Morococha mine and improvements at La Colorada, the Company expects consolidated cash costs to decrease and is estimating consolidated silver production of approximately 11.5 million ounces at a cash cost below $4.00 per ounce for 2004. </FONT>
</P>
<P>
<B><FONT size=2 face="Arial">Liquidity and Capital Resources </FONT></B>
</P>
<P>
<FONT size=2 face="Arial">At September 30, 2004, cash and cash equivalents plus short-term investments were $80.84 million, a $37.90 million decrease from June 30, 2004.  Investing activities consumed $37.32 million in cash and consisted primarily of the acquisition of the Morococha mine for $36.21 million, expenditures on mineral property, plant and equipment of $2.68 million and proceeds from the liquidation of short-term investments of $2.01 million.  Cash flow from operating activities was $6.91 million for the quarter ended September 30, 2004 before the net increase of $6.58 million in non-cash working capital. Increased non-cash working capital was primarily the result of increased accounts receivable and concentrate inventories associated with the concentrate producing Morococha mine.  Financing activities in the third quarter yielded $0.79 million mainly from the exercise of stock options.</FONT>
</P>
<P>
<FONT size=2 face="Arial">Working capital at September 30, 2004 was $97.08 million, a reduction of $27.87 million from June 30, 2004.  The reduction is reflected largely in a $37.90 million decrease in cash and cash equivalents plus short-term investments, offset by increases of $6.66 million in accounts receivable, $3.03 million in inventories and $1.28 million in prepaid expenses.</FONT>
</P>
<P>
<FONT size=2 face="Arial">Capital resources at September 30, 2004 amounted to shareholders&#146; equity of $263.33 million, capital leases of $0.33 million and deferred revenue of $0.75 million.  At September 30, 2004, the Company had 66,752,572 common shares issued and outstanding. </FONT>
</P>
<P>
<FONT size=2 face="Arial">Based on the Company&#146;s financial position at September 30, 2004 and the operating cash flows that are expected over the next twelve months, management believes that the Company&#146;s liquid assets are more than sufficient to fund planned operating and project development and sustaining capital expenditures and discharge liabilities as they come due. The Company&#146;s only contractual obligation at the date of this MD&amp;A was $0.4 million relating to a capital lease payable over the next two years.  The Company does not have any off-balance sheet arrangements. </FONT>
</P>
<P align="center">
<font face="Arial" size="2">22</font>
</P>
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<A name="page_23"></A>

<P>
<FONT size=2 face="Arial">Pan American mitigates the price risk associated with its base metal production by selling some of its forecasted base metal production under forward sales contracts, all of which are designated hedges for accounting purposes.  The Company incurred base metal hedging losses in the third quarter of 2004 totaling $0.65 million (2003 &#150; gain of $0.05 million), which have been included in the revenue figure on the consolidated statements of operations.  At September 30, 2004, the Company had sold forward 25,140 tonnes of zinc at a weighted average price of $1,062 per tonne ($0.482 per pound) and 6,170 tonnes of lead at a weighted average price of $722 per tonne ($0.328 per pound). The forward sales commitments for zinc represent approximately 45 per cent of the Company&#146;s forecast zinc production until December 2005.  The lead forward sales commitments represent approximately 35 per cent of the Company&#146;s forecast lead production until June 2005. At September 30, 2004, the c
ash offered prices for zinc and lead were $1,102 and $976 per tonne, respectively. The mark to market value at September 30, 2004 was ($2.57) million.  However, due to significant declines in the price of zinc and lead since September 30, 2004, at the date of this MD&amp;A the mark to market valuation had improved to ($0.71) million. </FONT>
</P>
<P>
<FONT size=2 face="Arial">At the end of the third quarter of 2004, the Company had fixed the price of 800,000 ounces of the third quarter&#146;s silver production contained in concentrates, which is due to be priced in October and November under the Company&#146;s concentrate contracts.  The price fixed for these ounces averaged $6.58 per ounce while the spot price of silver was $6.67 on September 30, 2004. </FONT>
</P>
<P>
<B><FONT size=2 face="Arial">Exploration and Development Activities </FONT></B>
</P>
<P>
<FONT size=2 face="Arial">At Huaron, progress towards expanding production rates continued during the quarter.  The mine was able to maintain the monthly mining rates achieved in the second quarter, and is currently processing approximately 12 per cent more ore per month than a year ago.  As part of the plan to increase production by up to 30 per cent at the Huaron mine, the Company initiated a second phase drill program focused on resource conversion.  This is a continuation of the $1.0 million first phase drilling program completed in the first half of the year.  Rehabilitation of the mine&#146;s 500 level is ongoing and is a key component of the plan to establish a second mining area, thereby allowing for an overall increase in monthly ore extraction. The cost of this program is being capitalized.</FONT>
</P>
<P style="line-height: 100%; margin-top: 0; margin-bottom: 0">
<font face="Arial" size="2">During the third quarter of 2004, the continued to move forward with the feasibility study for the 50 per cent
owned Manantial Espejo project in Argentina. Hatch Engineers developed the plant and infrastructure
capital and operating cost estimates for the purposes of this scoping study. Snowden Engineers</font>
</P>
<P>
<FONT size=2 face="Arial">completed the scoping level open pit mining operating and capital cost estimates, which incorporated an updated mineral resource estimate.  Vector Engineers have completed the archeological field program with no significant findings within the proposed disturbed area and the environmental baseline field programs are well underway.  An additional 5,000 meters of infill and extension drilling has been initiated, together with drilling to secure a water supply for the mine.  The feasibility study for the project is expected to be completed by early 2005.  Pan American&#146;s share of the feasibility costs for the first nine months of 2004 was $1.63 million, which was expensed as incurred.</FONT>
</P>
<P>
<FONT size=2 face="Arial">At Alamo Dorado in Mexico, a full time project manager has been hired as the Company started the process of staffing up for construction. Progress has been made toward securing a power supply and the mine concessions have been successfully upgraded to exploitation concessions and the explosives license received.  Site hydrological investigations including development of a ground water monitoring program for any tailings facility designs are underway.  Grindability tests were performed during the quarter and as a follow on from these tests, a pilot plant has been activated. The updated feasibility study is scheduled for completion in February 2005 incorporating the revised environmental permitting, pilot plant evaluation and tailings disposal facility design associated with the milling facility.</FONT>
</P>
<P>
<FONT size=2 face="Arial">At the San Vicente property, production continued under the 50,000 tonne agreement with EMUSA, a Bolivian mining company acting as operator.  The small-scale test mining program has produced 210,451 ounces of silver in the first nine months of the year to Pan American&#146;s account. The Company continued to move forward with a feasibility study, including completing 11,364 meters of diamond drilling by the end of the third quarter and undertaking assessments of nearby processing facilities. </FONT>
</P>
<P align="center">
<font face="Arial" size="2">23</font>
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-----END PRIVACY-ENHANCED MESSAGE-----
