-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 P2yWkdrmmU5wjqEmokrD7IAAbPkXVzupjobII9vYV1T7em+kr/2FEn29zi7AUnNh
 xaskrEXuoZokcgQOgggYJQ==

<SEC-DOCUMENT>0001137171-06-000521.txt : 20060307
<SEC-HEADER>0001137171-06-000521.hdr.sgml : 20060307
<ACCEPTANCE-DATETIME>20060307093558
ACCESSION NUMBER:		0001137171-06-000521
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20050331
FILED AS OF DATE:		20060307
DATE AS OF CHANGE:		20060307

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:		06668828

	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>panamerican6k030606g.htm
<DESCRIPTION>6-K FILING FOR PAN AMERICAN SILVER
<TEXT>
<html>

<head>
<meta name="GENERATOR" content="Microsoft FrontPage 4.0">
<meta name="ProgId" content="FrontPage.Editor.Document">
<title> CC Filed by Filing Services Canada Inc. 403-717-3898</title>
</head>

<body>

<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>FORM
  6-K</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>SECURITIES
  AND EXCHANGE COMMISSION</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Washington,
  D.C. 20549</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Report
  of Foreign Private Issuer</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Pursuant
  to Rule 13a-16 or 15d-16</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>of
  the Securities Exchange Act of 1934</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">For
  the month of </font><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">March,
  2005</font>
  <p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Commission
  File Number: 000-13727</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>Pan
  American Silver Corp.</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Translation
  of registrant's name into English)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <br>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>1500-625
  HOWE STREET</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>VANCOUVER
  BC CANADA V6C 2T6</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Address
  of principal executive offices)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Indicate
  by check mark whether the registrant files or will file annual reports under
  cover Form 20-F or Form 40-F.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Form
  20-F___ &nbsp;&nbsp;Form 40-F &nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;X&nbsp;&nbsp;</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;<p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Indicate
  by check mark if the registrant is submitting the Form 6-K in paper as
  permitted by Regulation S-T Rule 101(b)(1):&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Indicate
  by check mark if the registrant is submitting the Form 6-K in paper as
  permitted by Regulation S-T Rule 101(b)(7):&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font><p>&nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Indicate
  by check mark whether the registrant by furnishing the information contained
  in this Form is also thereby furnishing the information to the Commission
  pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Yes
  ..... &nbsp;No ..X...</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">If
  &quot;Yes&quot; is marked, indicate below the file number assigned to the
  registrant in connection with Rule 12g3-2(b): &nbsp;82-________</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Signatures</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Pursuant
  to the requirements of the Securities Exchange Act of 1934, the registrant has
  duly caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>Pan
  American Silver Corp.</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Registrant)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">By:<u>/s/
  Ross Beaty&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Signature)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Ross
  Beaty, </font><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Chairman</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Date:
  </font><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">March
  6, 2006</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="display: block; text-indent: 0pt; line-height: 1.25; width: 928; height: 19; margin-left: 0pt; margin-right: 0pt" align="left">
  <font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Ross
  Beaty, Chairman </font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Exhibit:
  </font>
  <p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="q12005mda.htm">Management's
  Discussion &amp; Analysis for March 31, 2005 (Restated March 2, 2006)</a>

</div>
<div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
  <div id="FTR">
    <div id="GLFTR" style="WIDTH: 100%" align="left">
    </div>
  </div>
  <div id="PN" style="PAGE-BREAK-AFTER: always">
    <div style="WIDTH: 100%; TEXT-ALIGN: center">
    </div>
  </div>
</div>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>q12005mda.htm
<DESCRIPTION>MDA FROM FIRST QUARTER 2005
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>CC Filed by Filing Services Canada Inc. 403-717-3898 </TITLE>
<META NAME="author" CONTENT="brenda">
<META NAME="date" CONTENT="03/02/2006">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<P style="line-height:18pt; margin:0pt; font-family:Arial; font-size:16pt" align=center><font face="Arial"><b>RESTATED</b></font></P>
<P style="line-height:18pt; margin:0pt; font-family:Arial; font-size:16pt" align=justify>&nbsp;</P>
<P style="line-height:18pt; margin:0pt; font-family:Arial; font-size:16pt" align=justify>&nbsp;</P>
<P style="line-height:18pt; margin:0pt; font-family:Arial; font-size:16pt" align=justify><FONT FACE="Arial"><B>First Quarter 2005 Management&#146;s Discussion and Analysis</B></FONT></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Management's Discussion and Analysis (MD &amp; A) presented below reflects the effects of the restatement on the consolidated financial statements as at March 31, 2005 and December 31, 2004 and for the three month periods ended March 31, 2005 and 2004. See &quot;Restatement&quot; below for further discussion of this matter. &nbsp;Apart from revisions described under &#147;Restatement&#148; below, this MD&amp;A has not been revised for new events or developments.</P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>The MD&amp;A focuses on significant factors that affected Pan American Silver Corp.&#146;s and its subsidiaries&#146; (&#147;Pan American&#148; or the &#147;Company&#148;) performance and such factors that may affect its future performance. &nbsp;This MD&amp;A has been prepared effective April 28, 2005.The MD&amp;A for the first quarter ending March 31, 2005, and 2004, should be read in conjunction with the unaudited consolidated financial statements for the three months ended March 31, 2005 and 2004 and the related notes contained therein.<FONT FACE="Times New Roman">&nbsp;</FONT></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>The significant accounting policies are outlined within Note 2 to the Consolidated Financial Statements of the Company for the year ended December 31, 2004. These accounting policies have been applied consistently for the three months ended March 31, 2005</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates are related to the physical and economic lives of mineral assets, their recoverability, site restoration and related obligations.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Some of the statements in this management discussion and analyses 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. &nbsp;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 Annual Report.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify><B>Restatement</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>In 2004, Pan American implemented a hedge accounting policy for the accounting treatment of its base-metal forward contracts program. &nbsp;In the fourth quarter of 2005 it was concluded that the Company&#146;s accounting for its forward contracts for the sale of base metals (lead and zinc) ,its forward contracts for purchasing Mexican pesos with US dollars and its silver fixing contracts does not qualify for hedge accounting under AcG-13, Hedging Relationships. &nbsp;As a result, Pan American has restated its unaudited consolidated financial statements for each quarter from March 31, 2004 to September 30, 2005 and its audited 2004 consolidated financial statements.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Pan American is now required to recognize mark-to market valuations of its open forward contract positions through its income at the end of each period. &nbsp;In the past, Pan American had recognized gains, losses, revenues and expenses from its forward contracts in its income only in the period in which they settled. &nbsp;The effects of the change in accounting treatment are summarized in the following tables:</P>
<P style="margin:0pt"><BR>
</P>
<P style="font-family: Arial; text-indent: 27pt; margin: 0pt; padding-left: 18pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<hr>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="margin:0pt"><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=171.45></TD><TD width=12.25></TD><TD width=51.8></TD><TD width=11.25></TD><TD width=55.3></TD><TD width=13.25></TD><TD width=53.1></TD><TD width=12.65></TD><TD width=53.75></TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" width=174.133 colspan=4><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><FONT FACE="Arial"><B>As Previously Reported</B></FONT></P>
</TD><TD style="border-right:0.5pt solid #000000" width=177 colspan=4><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Restated</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify><B>Consolidated Balance Sheets</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=85.4 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>March 31</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=88.733 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>December 31</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=88.467 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>March 31</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=88.533 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>December 31</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=85.4 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2005</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=88.733 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=88.467 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2005</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=88.533 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6>&nbsp;</TD><TD valign=top width=16.333>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=69.067><P style="margin:0pt"><BR></P>
</TD><TD valign=top width=15>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=73.733><P style="margin:0pt"><BR></P>
</TD><TD valign=top width=17.667>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=70.8><P style="margin:0pt"><BR></P>
</TD><TD valign=top width=16.867>&nbsp;</TD><TD valign=top width=71.667><P style="margin:0pt"><BR></P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=228.6><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Unrealized gain on commodity contracts</P>
</TD><TD valign=bottom width=16.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=69.067><P style="line-height:11pt; margin:0pt; text-indent:39.75pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD valign=bottom width=15 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; text-indent:46.2pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD valign=bottom width=17.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=70.8><P style="line-height:11pt; margin:0pt; text-indent:42.2pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD valign=bottom width=16.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD valign=bottom width=71.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:34.45pt; font-family:Arial; font-size:9pt">480</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Unrealized loss on commodity contracts</P>
</TD><TD width=16.333><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=69.067><P style="line-height:11pt; margin:0pt; text-indent:39.75pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD width=15><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=73.733><P style="line-height:11pt; margin:0pt; text-indent:46.2pt; font-family:Arial; font-size:9pt">-</P>
</TD><TD width=17.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=70.8><P style="line-height:11pt; margin:0pt; text-indent:24.95pt; font-family:Arial; font-size:9pt">6,127</P>
</TD><TD width=16.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=71.667><P style="line-height:11pt; margin:0pt; text-indent:27.7pt; font-family:Arial; font-size:9pt">4,695</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=228.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Prepaid expenses</P>
</TD><TD valign=bottom width=16.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=69.067><P style="line-height:11pt; margin:0pt; text-indent:22.5pt; font-family:Arial; font-size:9pt" align=justify>1,567</P>
</TD><TD valign=bottom width=15 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; text-indent:28.95pt; font-family:Arial; font-size:9pt" align=justify>1,684</P>
</TD><TD valign=bottom width=17.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=70.8><P style="line-height:11pt; margin:0pt; text-indent:24.95pt; font-family:Arial; font-size:9pt" align=justify>1,567</P>
</TD><TD valign=bottom width=16.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=bottom width=71.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:27.7pt; font-family:Arial; font-size:9pt" align=justify>1,211</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=228.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Accounts payable and accrued liabilities</P>
</TD><TD valign=top width=16.333><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=69.067><P style="line-height:11pt; margin:0pt; text-indent:18pt; font-family:Arial; font-size:9pt" align=justify>18,369</P>
</TD><TD valign=top width=15><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=73.733><P style="line-height:11pt; margin:0pt; text-indent:24.45pt; font-family:Arial; font-size:9pt" align=justify>20,331</P>
</TD><TD valign=top width=17.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=70.8><P style="line-height:11pt; margin:0pt; text-indent:20.45pt; font-family:Arial; font-size:9pt" align=justify>18,262</P>
</TD><TD valign=top width=16.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=71.667><P style="line-height:11pt; margin:0pt; text-indent:23.2pt; font-family:Arial; font-size:9pt" align=justify>20,331</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=228.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Deficit</P>
</TD><TD valign=bottom width=16.333 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=69.067><P style="line-height:11pt; margin:0pt; text-indent:7.5pt; font-family:Arial; font-size:9pt" align=justify>(114,870)</P>
</TD><TD valign=bottom width=15 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=73.733><P style="line-height:11pt; margin:0pt; text-indent:13.95pt; font-family:Arial; font-size:9pt" align=justify>(111,976)</P>
</TD><TD valign=bottom width=17.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=70.8><P style="line-height:11pt; margin:0pt; text-indent:9.95pt; font-family:Arial; font-size:9pt" align=justify>(120,890)</P>
</TD><TD valign=bottom width=16.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=bottom width=71.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:12.7pt; font-family:Arial; font-size:9pt" align=justify>(116,664)</P>
</TD></TR>
<TR><TD valign=top width=228.6>&nbsp;</TD><TD valign=top width=16.333>&nbsp;</TD><TD valign=top width=69.067><P style="margin:0pt" align=justify><BR></P>
</TD><TD valign=top width=15>&nbsp;</TD><TD valign=top width=73.733><P style="margin:0pt" align=justify><BR></P>
</TD><TD valign=top width=17.667>&nbsp;</TD><TD valign=top width=70.8><P style="margin:0pt" align=justify><BR></P>
</TD><TD valign=top width=16.867>&nbsp;</TD><TD valign=top width=71.667><P style="margin:0pt" align=justify><BR></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=169.4></TD><TD width=14.6></TD><TD width=51.75></TD><TD width=11.15></TD><TD width=55.25></TD><TD width=13.2></TD><TD width=53.85></TD><TD width=11.85></TD><TD width=53.75></TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" width=177 colspan=4><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Previously Reported</B></P>
</TD><TD style="border-right:0.5pt solid #000000" width=176.867 colspan=4><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>As Restated</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify><B>Consolidated Statement of Operations</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=177 colspan=4><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Three Month Ended March 31</B></P>
</TD><TD style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" width=176.867 colspan=4><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>Three Month Ended March 31</B></P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-right:0.5pt solid #000000" valign=top width=88.467 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2005</B></P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=88.533 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=89.4 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2005</B></P>
</TD><TD valign=top width=87.467 colspan=2><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=center><B>2004</B></P>
</TD></TR>
<TR><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000" valign=top width=225.867>&nbsp;</TD><TD style="border-top:0.5pt solid #000000" valign=top width=19.467>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000" valign=top width=69><P style="margin:0pt" align=justify><BR></P>
</TD><TD style="border-top:0.5pt solid #000000" valign=top width=14.867>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000" valign=top width=73.667><P style="margin:0pt" align=justify><BR></P>
</TD><TD style="border-top:0.5pt solid #000000" valign=top width=17.6>&nbsp;</TD><TD style="border-top:0.5pt solid #000000; border-right:0.5pt solid #000000" valign=top width=71.8><P style="margin:0pt" align=justify><BR></P>
</TD><TD style="border-top:0.5pt solid #000000" valign=top width=15.8>&nbsp;</TD><TD style="border-top:0.5pt solid #000000" valign=top width=71.667><P style="margin:0pt" align=justify><BR></P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Revenue</P>
</TD><TD valign=bottom width=19.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=69><P style="line-height:11pt; margin:0pt; text-indent:18pt; font-family:Arial; font-size:9pt">27,081</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=73.667><P style="line-height:11pt; margin:0pt; text-indent:24.45pt; font-family:Arial; font-size:9pt">15,151</P>
</TD><TD valign=bottom width=17.6 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; text-indent:20.45pt; font-family:Arial; font-size:9pt">29,086</P>
</TD><TD valign=bottom width=15.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD valign=bottom width=71.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:23.2pt; font-family:Arial; font-size:9pt">15,708</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Mine operating earnings</P>
</TD><TD width=19.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=69><P style="line-height:11pt; margin:0pt; text-indent:22.5pt; font-family:Arial; font-size:9pt">1,483</P>
</TD><TD width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=73.667><P style="line-height:11pt; margin:0pt; text-indent:28.95pt; font-family:Arial; font-size:9pt">1,838</P>
</TD><TD width=17.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="border-right:0.5pt solid #000000" width=71.8><P style="line-height:11pt; margin:0pt; text-indent:24.95pt; font-family:Arial; font-size:9pt">3,488</P>
</TD><TD width=15.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=71.667><P style="line-height:11pt; margin:0pt; text-indent:27.7pt; font-family:Arial; font-size:9pt">2,395</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Loss on commodity contracts</P>
</TD><TD valign=bottom width=19.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=69><P style="line-height:11pt; margin:0pt; text-indent:39.75pt; font-family:Arial; font-size:9pt" align=justify>-</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=73.667><P style="line-height:11pt; margin:0pt; text-indent:46.2pt; font-family:Arial; font-size:9pt" align=justify>-</P>
</TD><TD valign=bottom width=17.6 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; text-indent:18.95pt; font-family:Arial; font-size:9pt" align=justify>(3,337)</P>
</TD><TD valign=bottom width=15.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=bottom width=71.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; text-indent:21.7pt; font-family:Arial; font-size:9pt" align=justify>(2,214)</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Net loss for the period</P>
</TD><TD valign=top width=19.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=69><P style="line-height:11pt; margin:0pt; text-indent:16.5pt; font-family:Arial; font-size:9pt" align=justify>(2,891)</P>
</TD><TD valign=top width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=73.667><P style="line-height:11pt; margin:0pt; text-indent:29.7pt; font-family:Arial; font-size:9pt" align=justify>(366)</P>
</TD><TD valign=top width=17.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=71.8><P style="line-height:11pt; margin:0pt; text-indent:18.95pt; font-family:Arial; font-size:9pt" align=justify>(4,223)</P>
</TD><TD valign=top width=15.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=71.667><P style="line-height:11pt; margin:0pt; text-indent:21.7pt; font-family:Arial; font-size:9pt" align=justify>(2,023)</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt" align=justify>Adjusted net loss for the period attributable to common shareholders</P>
</TD><TD width=19.467 style="background-color: #E6E9FF" valign="bottom"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" width=69 valign="bottom"><P style="line-height:11pt; margin:0pt; text-indent:16.5pt; font-family:Arial; font-size:9pt">(2,894)</P>
</TD><TD width=14.867 style="background-color: #E6E9FF" valign="bottom"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" width=73.667 valign="bottom"><P style="line-height:11pt; margin:0pt; text-indent:22.95pt; font-family:Arial; font-size:9pt">(2,486)</P>
</TD><TD width=17.6 style="background-color: #E6E9FF" valign="bottom"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" width=71.8 valign="bottom"><P style="line-height:11pt; margin:0pt; text-indent:18.95pt; font-family:Arial; font-size:9pt">(4,226)</P>
</TD><TD width=15.8 style="background-color: #E6E9FF" valign="bottom"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</P>
</TD><TD width=71.667 style="background-color: #E6E9FF" valign="bottom"><P style="line-height:11pt; margin:0pt; text-indent:21.7pt; font-family:Arial; font-size:9pt">(4,143)</P>
</TD></TR>
<TR><TD style="border-right:0.5pt solid #000000" valign=top width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Basic loss per share</P>
</TD><TD valign=top width=19.467><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=69><P style="line-height:11pt; margin:0pt; padding-right:3.35pt; font-family:Arial; font-size:9pt" align=right>(0.04)</P>
</TD><TD valign=top width=14.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=73.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>(0.05)</P>
</TD><TD valign=top width=17.6><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="border-right:0.5pt solid #000000" valign=top width=71.8><P style="line-height:11pt; margin:0pt; padding-right:2.45pt; font-family:Arial; font-size:9pt" align=right>(0.06)</P>
</TD><TD valign=top width=15.8><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=top width=71.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>(0.08)</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=225.867><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>Diluted loss per share</P>
</TD><TD valign=bottom width=19.467 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=69><P style="line-height:11pt; margin:0pt; padding-right:2.65pt; font-family:Arial; font-size:9pt" align=right>(0.04)</P>
</TD><TD valign=bottom width=14.867 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=73.667><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>(0.05)</P>
</TD><TD valign=bottom width=17.6 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD style="background-color: #E6E9FF; border-right: 0.5pt solid #000000" valign=bottom width=71.8><P style="line-height:11pt; margin:0pt; padding-right:1.75pt; font-family:Arial; font-size:9pt" align=right>(0.06)</P>
</TD><TD valign=bottom width=15.8 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=justify>$</P>
</TD><TD valign=bottom width=71.667 style="background-color: #E6E9FF"><P style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align=right>(0.08)</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>This change in accounting treatment has no impact on our cash flows. &nbsp;The details of our commodity and foreign currency forward contracts, which we have previously disclosed, have not changed and Management believes that they continue to serve Pan American as a prudent risk management tool. &nbsp;Pan American does not hedge its future silver production.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify><B>Results of Operations</B> </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>For the three months ended March 31, 2005, the Company&#146;s net loss was $4.2 million (loss per share of $0.06) compared to a net loss of $2.0 million ($0.08 per share loss) for the corresponding period in 2004. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Revenue from metal sales for the first quarter of 2005 was $29.1 million, a 85 per cent increase the corresponding period in 2004. &nbsp;The acquisition of the Morococha mine in the third quarter of 2004 was the main reason for the increase in revenue from a year ago, accounting for $8.6 million of revenue in the first quarter of 2005. &nbsp;Revenue in the first quarter also benefited from higher realized metal prices and increased concentrate shipments from the Company&#146;s Peruvian operations versus the year-earlier period. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>The Company generated mine operating earnings of $3.5 million in the first quarter of 2005 (2004 - $2.4 million). &nbsp;Mine operating earnings are the difference between revenue and operating costs plus depreciation and amortization. &nbsp;&nbsp;As reflected in the following table, the first quarter of 2005 represents the eighth consecutive quarter that the Company has generated mine operating earnings. &nbsp;The following table sets out select quarterly results for the past nine quarters, which are stated in thousands of US dollars, except per share amounts. &nbsp;</P>
<P style="margin:0pt" align=justify><BR>
</P>
<P style="font-family: Arial; text-indent: 27pt; margin: 0pt; padding-left: 18pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<hr>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=46.8></TD><TD width=63.45></TD><TD width=12.15></TD><TD width=50.4></TD><TD width=30.6></TD><TD width=54.9></TD><TD width=44.1></TD><TD width=45></TD><TD width=27></TD><TD width=54></TD></TR>
<TR><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=62.4><P style="margin:0pt; font-family:Arial" align=center><FONT FACE="Arial">Year</FONT></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=84.6><P style="margin:0pt; font-family:Arial" align=center>Quarter</P>
<P style="margin:0pt; font-family:Arial" align=center>(unaudited)</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=83.4 colspan=2><P style="margin:0pt; font-family:Arial" align=center>Revenue</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=114 colspan=2><P style="margin:0pt; font-family:Arial" align=center>Mine operating earnings/(loss)<SUP>(1)</SUP></P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=118.8 colspan=2><P style="margin:0pt; font-family:Arial" align=center>Net income/(loss) for the period</P>
</TD><TD style="border-bottom:0.5pt solid #000000" valign=bottom width=108 colspan=2><P style="margin:0pt; font-family:Arial" align=center>Net income (loss) per share</P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=bottom width=62.4><P style="margin:0pt; font-family:Arial" align=right>2005</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=84.6><P style="margin-top:5pt; margin-bottom:0pt; font-family:Arial" align=right>March 31</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=16.2><P style="margin-top:5pt; margin-bottom:0pt; font-family:Arial" align=center>$</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=67.2><P style="margin-top:5pt; margin-bottom:0pt; font-family:Arial" align=right>29,086</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=40.8><P style="margin-top:5pt; margin-bottom:0pt; font-family:Arial" align=right>$</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=73.2><P style="margin-top:5pt; margin-bottom:0pt; text-indent:17.1pt; font-family:Arial">3,488</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=58.8><P style="margin-top:5pt; margin-bottom:0pt; font-family:Arial" align=center>$</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=60><P style="margin-top:5pt; margin-bottom:0pt; text-indent:1.4pt; font-family:Arial">(4,223)</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=36><P style="margin-top:5pt; margin-bottom:0pt; font-family:Arial" align=center>$</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" width=72><P style="margin-top:5pt; margin-bottom:0pt; text-indent:6.85pt; font-family:Arial">(0.06)</P>
</TD></TR>
<TR><TD valign=top width=62.4><P style="margin:0pt; font-family:Arial" align=right>2004</P>
</TD><TD valign=top width=84.6><P style="margin:0pt; font-family:Arial" align=right>Dec. 31</P>
</TD><TD valign=top width=16.2><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=67.2><P style="margin:0pt; font-family:Arial" align=right>30,022</P>
</TD><TD valign=top width=40.8><P style="margin:0pt; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=73.2><P style="margin:0pt; text-indent:17.1pt; font-family:Arial">3,402</P>
</TD><TD valign=top width=58.8><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=60><P style="margin:0pt; text-indent:3.1pt; font-family:Arial">13,527</P>
</TD><TD valign=top width=36><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0pt; text-indent:10.2pt; font-family:Arial" align=justify>0.21</P>
</TD></TR>
<TR><TD valign=top width=62.4 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=84.6 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>Sept. 30</P>
</TD><TD valign=top width=16.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=67.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>27,916</P>
</TD><TD valign=top width=40.8 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=73.2 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:17.1pt; font-family:Arial">6,357</P>
</TD><TD valign=top width=58.8 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=60 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:15.6pt; font-family:Arial">358</P>
</TD><TD valign=top width=36 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:10.2pt; font-family:Arial" align=justify>0.01</P>
</TD></TR>
<TR><TD valign=top width=62.4>&nbsp;</TD><TD valign=top width=84.6><P style="margin:0pt; font-family:Arial" align=right>June 30</P>
</TD><TD valign=top width=16.2><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=67.2><P style="margin:0pt; font-family:Arial" align=right>21,179</P>
</TD><TD valign=top width=40.8><P style="margin:0pt; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=73.2><P style="margin:0pt; text-indent:17.1pt; font-family:Arial">2,640</P>
</TD><TD valign=top width=58.8><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=60><P style="margin:0pt; text-indent:8.1pt; font-family:Arial">3,352</P>
</TD><TD valign=top width=36><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0pt; text-indent:6.85pt; font-family:Arial" align=justify>(0.09)<SUP>(2)</SUP></P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=62.4>&nbsp;</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=84.6><P style="margin:0pt; font-family:Arial" align=right>March 31</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=16.2><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=67.2><P style="margin:0pt; font-family:Arial" align=right>15,708</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=40.8><P style="margin:0pt; font-family:Arial" align=right>$</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=73.2><P style="margin:0pt; text-indent:17.1pt; font-family:Arial">2,395</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=58.8><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=60><P style="margin:0pt; text-indent:1.4pt; font-family:Arial">(2,023)</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=36><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=72><P style="margin:0pt; text-indent:6.85pt; font-family:Arial" align=justify>(0.08)<SUP>(2)</SUP></P>
</TD></TR>
<TR><TD valign=top width=62.4><P style="margin:0pt; font-family:Arial" align=right>2003</P>
</TD><TD valign=top width=84.6><P style="margin:0pt; font-family:Arial" align=right>Dec.31</P>
</TD><TD valign=top width=16.2><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=67.2><P style="margin:0pt; font-family:Arial" align=right>12,857</P>
</TD><TD valign=top width=40.8><P style="margin:0pt; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=73.2><P style="margin:0pt; text-indent:29.6pt; font-family:Arial">81</P>
</TD><TD valign=top width=58.8><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=60><P style="margin:0pt; text-indent:1.4pt; font-family:Arial">(2,840)</P>
</TD><TD valign=top width=36><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0pt; text-indent:6.85pt; font-family:Arial" align=justify>(0.05)<SUP>(2)</SUP></P>
</TD></TR>
<TR><TD valign=top width=62.4 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=84.6 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>Sept. 30</P>
</TD><TD valign=top width=16.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=67.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>11,890</P>
</TD><TD valign=top width=40.8 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=73.2 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:17.1pt; font-family:Arial">1,258</P>
</TD><TD valign=top width=58.8 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=60 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:1.4pt; font-family:Arial">(1,125)</P>
</TD><TD valign=top width=36 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:6.85pt; font-family:Arial" align=justify>(0.10)<SUP>(2)</SUP></P>
</TD></TR>
<TR><TD valign=top width=62.4>&nbsp;</TD><TD valign=top width=84.6><P style="margin:0pt; font-family:Arial" align=right>June 30</P>
</TD><TD valign=top width=16.2><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=67.2><P style="margin:0pt; font-family:Arial" align=right>12,553</P>
</TD><TD valign=top width=40.8><P style="margin:0pt; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=73.2><P style="margin:0pt; text-indent:24.6pt; font-family:Arial">758</P>
</TD><TD valign=top width=58.8><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=60><P style="margin:0pt; text-indent:1.4pt; font-family:Arial">(1,156)</P>
</TD><TD valign=top width=36><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0pt; text-indent:6.85pt; font-family:Arial" align=justify>(0.02)</P>
</TD></TR>
<TR><TD valign=top width=62.4 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=84.6 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>March 31</P>
</TD><TD valign=top width=16.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=67.2 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>7,822</P>
</TD><TD valign=top width=40.8 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=73.2 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:22.9pt; font-family:Arial">(78)</P>
</TD><TD valign=top width=58.8 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=60 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:1.4pt; font-family:Arial">(1,573)</P>
</TD><TD valign=top width=36 style="background-color: #E6E9FF"><P style="margin:0pt; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72 style="background-color: #E6E9FF"><P style="margin:0pt; text-indent:6.85pt; font-family:Arial" align=justify>(0.03)</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:11pt; margin-top:0pt; margin-bottom:-11pt; padding-left:36.75pt; text-indent:-18.75pt; font-family:Arial; font-size:9pt" align=justify>(1)</P>
<P style="line-height:11pt; margin:0pt; padding-left:36.75pt; font-family:Arial; font-size:9pt" align=justify>Mine operating earnings/(loss) is equal to revenues less operating expenses less depreciation and amortization</P>
<P style="line-height:11pt; margin-top:0pt; margin-bottom:-11pt; padding-left:36.75pt; text-indent:-18.75pt; font-family:Arial; font-size:9pt" align=justify>(2)</P>
<P style="line-height:11pt; margin:0pt; padding-left:36.75pt; font-family:Arial; font-size:9pt" align=justify>Includes charges associated with early conversion and accretion of the Debentures</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Depreciation and amortization charges for the first quarter increased to $3.2 million from $2.1&nbsp;million in the first quarter of 2004. &nbsp;The principle reason for this increase was the depreciation charges related to Morococha, which was acquired with effect from July 1, 2004. </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>General and administration costs for the three-month period ended March 31, 2005, including stock-based compensation, were $1.6 million. These costs, which were $1.2 million for the comparable quarter in 2004, were negatively impacted by a stronger Canadian dollar as compared to the US dollar. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Exploration expenses for the first quarter of 2005 were $1.4 million, which is almost a three fold increase from the corresponding period a year ago, reflecting the increased feasibility activity at the Company&#146;s 50 per cent owned Manantial Espejo property in Argentina. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Asset retirement and reclamation expense of $0.5 million in the first quarter of 2005 (2004 - $0.3 million) related to the accretion of the liability that the Company recognized by adopting CICA Handbook Section 3110 &#150; &#147;Accounting for Asset Retirement Obligations&#148; as at December 31, 2003. &nbsp;&nbsp;&nbsp;There has been no change during the quarter to the Company&#146;s expectations of future site restoration costs at any of its mines.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Interest expenses have been reduced to $0.1 million in the first quarter of 2005 compared to $0.5 million during the same period in 2004 as a result of the Company successfully inducing the early conversion of 99 per cent of the 5.25 per cent convertible unsecured senior subordinated debentures (the &#147;Debentures&#148;) and prepaying all bank debt in the second quarter of 2004.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>The Company incurred a loss on commodity contracts of $3.3 million during the first quarter of 2005 (2004 &#150; loss of $2.2 million).</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Investment and other income of $0.3 million represented interest income received from cash balances the Company maintained during the quarter.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>During the later part of 2004, the Company became taxable in Peru. &nbsp;As such, the Company incurred an income tax expense of $0.9 million and increased operating costs relating to worker&#146;s participation of $0.3 million during the first quarter of 2005 (2004 - $nil). </P>
<P style="margin:0pt" align=justify><BR>
</P>
<P style="font-family: Arial; text-indent: 27pt; margin: 0pt; padding-left: 18pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<hr>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="margin:0pt; font-family:Arial" align=justify><FONT FACE="Arial"><B>Production </B></FONT></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Pan American produced 2,995,702 ounces of silver in the first quarter of 2005, a 27 per cent increase from the corresponding period in 2004. &nbsp;The acquisition of Morococha, which produced 653,534 ounces at a cash cost of $3.72 per payable ounce, accounts for all of the increase, while production from the Company&#146;s other operations in total remained steady from production levels achieved a year ago. &nbsp;The La Colorada mine continued to improve during the first quarter with record silver production of 688,619 ounces at cash costs of $5.58 per payable ounce. &nbsp;The Company&#146;s Pyrite Stockpile operation produced 206,015 ounces of silver during the quarter at cash costs of $1.89 per payable ounce. The Quiruvilca and Huaron mines endured difficult quarters during which grades and recoveries did not meet expectations. &nbsp;&nbsp;Management is confident that these operations will be able to make up for the shortfall compared to expected produ
ction over the remainder of the year and still expects to reach the consolidated production target of 13.5 million ounces of silver in 2005. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Consolidated cash costs for the three-month period ended March 31, 2005 were $4.50 per payable ounce compared to $3.78 per payable ounce for the corresponding period of 2004. &nbsp;Peruvian mining royalties and Volcan Minera S.A.&#146;s one-third participation in the Pyrite Stockpile operation, which totaled $0.6 million during the quarter (2004 - $nil) are the primary reason for this increase. Higher energy costs at all operations and lower grades and recoveries at Quiruvilca and Huaron also negatively impacted cash costs per payable ounce. &nbsp;With the addition of the low-cost San Vicente mine, towards the end of May 2005, the Company expects consolidated cash costs per payable ounce to decrease and is estimating consolidated cash cost per payable ounce of below $4.25 for 2005.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="line-height:normal; margin:0pt; font-family:Arial" align=justify>In April Pan American launched a new line of silver bullion products for its shareholders and other silver investors in order to provide easier access to physical silver and to help stimulate demand. The products comprise .999 pure silver coins and bars in one, five and ten ounce weights, featuring Pan American&#146;s trademark &#147;silver hammer&#148; and using silver supplied from Pan American&#146;s La Colorada mine in Mexico, one of the world&#146;s purest silver mines.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify><B>Cash and Total Production Costs per Ounce for Payable Silver</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>The Company has changed its method for calculating cash and total costs per ounce of silver, with effect from the first quarter of 2005. &nbsp;In the past, these calculations were based on produced ounces, as set out on page 11 of the MD&amp;A for the year ended December 31, 2004. &nbsp;Under the new method, the Company will calculate its cash and total costs per ounce based on the silver ounces for which the Company is paid, therefore negating the need to account for the cost of metals lost in smelting and refining. &nbsp;The 2004 first quarter&#146;s costs per ounce have been recalculated on a payable metal basis to ensure that the comparables are consistent with the method used for the 2005 first quarter&#146;s costs per ounce.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>The Company reports the cash cost per ounce of payable silver. This non-GAAP measure is used by the Company to manage and evaluate operating performance at each of the Company&#146;s mines and is widely reported in the silver mining industry as benchmarks for performance measurement, but do not have standardized meaning. &nbsp;To facilitate a better understanding of this measure as calculated by the Company, we have provided a detailed reconciliation of this measure to our operating costs, as shown in our unaudited Consolidated Statement of Operations for the period.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR>
<BR></P>
<P style="font-family: Arial; text-indent: 27pt; margin: 0pt; padding-left: 18pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<hr>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:10pt" cellspacing=0><TR><TD width=188.85></TD><TD width=89.05></TD><TD width=16.65></TD><TD width=54.6></TD><TD width=16.65></TD><TD width=62.3></TD></TR>
<TR><TD valign=top width=370.533 colspan=2 rowspan=2>&nbsp;</TD><TD valign=top width=200.267 colspan=4><P style="margin:0pt">March 31,</P>
</TD></TR>
<TR><TD style="border-bottom:1pt solid #000000" valign=top width=95 colspan=2><P style="margin:0pt">2005</P>
</TD><TD style="border-bottom:1pt solid #000000" valign=top width=105.267 colspan=2><P style="margin:0pt">2004</P>
</TD></TR>
<TR><TD valign=top width=370.533 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt">Operating Costs</P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF"><P style="margin:0pt"><B>$</B></P>
</TD><TD valign=top width=72.8 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:17.5pt" align=justify><B>22,380</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF"><P style="margin:0pt">$</P>
</TD><TD valign=top width=83.067 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:9.7pt"><B>11,168</B></P>
</TD></TR>
<TR><TD valign=top width=370.533 colspan=2><P style="margin:0pt"><B>Add/(Subtract)</B></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt" align=justify><B>&nbsp;</B></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=83.067><P style="margin:0pt"></P>
</TD></TR>
<TR><TD valign=top width=370.533 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt"><B>Smelting, refining, and transportation charges</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=72.8 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:22.5pt" align=justify><B>9,189</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=83.067 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:14.7pt"><B>6,218</B></P>
</TD></TR>
<TR><TD valign=top width=370.533 colspan=2><P style="margin:0pt"><B>By-product credits</B></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:10.8pt" align=justify><B>(17,398)</B></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=83.067><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:3pt"><B>(11,401)</B></P>
</TD></TR>
<TR><TD valign=top width=370.533 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt"><B>Mining royalties</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=72.8 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:30pt" align=justify><B>445</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=83.067 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:11.25pt; padding-right:-0.2pt"><B>-</B></P>
</TD></TR>
<TR><TD valign=top width=370.533 colspan=2><P style="margin:0pt"><B>Change in inventories</B></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:15.8pt" align=justify><B>(2,136)</B></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=83.067><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:14.7pt"><B>1,667</B></P>
</TD></TR>
<TR><TD valign=top width=370.533 colspan=2 style="background-color: #E6E9FF"><P style="margin:0pt"><B>Other</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=72.8 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:30pt" align=justify><B>104</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=83.067 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:22.2pt"><B>298</B></P>
</TD></TR>
<TR><TD style="border-bottom:1pt solid #000000" valign=top width=370.533 colspan=2><P style="margin:0pt"><B>Minority interest adjustment</B></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=top width=22.2>&nbsp;</TD><TD style="border-bottom:1pt solid #000000" valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:23.3pt"><B>(342)</B></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=top width=22.2>&nbsp;</TD><TD style="border-bottom:1pt solid #000000" valign=top width=83.067><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:50.65pt"><B>-</B></P>
</TD></TR>
<TR><TD valign=top width=251.8 style="background-color: #E6E9FF"><P style="margin:0pt">Cash Operating Costs</P>
</TD><TD valign=top width=118.733 style="background-color: #E6E9FF"><P style="margin:0pt"><B>A</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF"><P style="margin:0pt">$</P>
</TD><TD valign=top width=72.8 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:17.5pt">12,242</P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF"><P style="margin:0pt">$</P>
</TD><TD valign=top width=83.067 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:14.7pt">7,949</P>
</TD></TR>
<TR><TD valign=top width=251.8><P style="margin:0pt"><B>Add/(Subtract)</B></P>
</TD><TD valign=top width=118.733>&nbsp;</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=72.8><P style="margin:0pt"></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=83.067><P style="margin:0pt"></P>
</TD></TR>
<TR><TD valign=top width=251.8 style="background-color: #E6E9FF"><P style="margin:0pt"><B>Depreciation and amortization</B></P>
</TD><TD valign=top width=118.733 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=72.8 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:22.5pt"><B>3,218</B></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=83.067 style="background-color: #E6E9FF"><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:14.7pt"><B>2,145</B></P>
</TD></TR>
<TR><TD valign=top width=251.8><P style="margin:0pt"><B>Asset retirement and reclamation</B></P>
</TD><TD valign=top width=118.733>&nbsp;</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:30pt"><B>527</B></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=83.067><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:22.2pt"><B>302</B></P>
</TD></TR>
<TR><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=251.8><P style="margin:0pt"><B>Other</B></P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=118.733>&nbsp;</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=22.2>&nbsp;</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:23.3pt"><B>(175)</B></P>
</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=22.2>&nbsp;</TD><TD style="background-color: #E6E9FF; border-bottom: 0.5pt solid #000000" valign=top width=83.067><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:32.2pt"><B>6</B></P>
</TD></TR>
<TR><TD valign=top width=251.8><P style="margin:0pt">Production Costs</P>
</TD><TD valign=top width=118.733><P style="margin:0pt"><B>B</B></P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:17.5pt">15,812</P>
</TD><TD valign=top width=22.2>&nbsp;</TD><TD valign=top width=83.067><P style="margin:0pt; padding-left:11.25pt; padding-right:-86.25pt; text-indent:9.7pt">10,402</P>
</TD></TR>
<TR><TD valign=top width=251.8 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=118.733 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=72.8 style="background-color: #E6E9FF"><P style="margin:0pt"></P>
</TD><TD valign=top width=22.2 style="background-color: #E6E9FF">&nbsp;</TD><TD valign=top width=83.067 style="background-color: #E6E9FF"><P style="margin:0pt"></P>
</TD></TR>
<TR><TD valign=top width=251.8><P style="margin:0pt">Payable Ounces of Silver</P>
</TD><TD valign=top width=118.733><P style="margin:0pt"><B>C</B></P>
</TD><TD style="border-bottom:1pt solid #000000" valign=top width=22.2>&nbsp;</TD><TD style="border-bottom:1pt solid #000000" valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:5pt">2,718,073</P>
</TD><TD style="border-bottom:1pt solid #000000" valign=top width=22.2>&nbsp;</TD><TD style="border-bottom:1pt solid #000000" valign=top width=83.067><P style="margin:0pt; padding-left:-1.85pt; text-indent:10.3pt">2,101,295</P>
</TD></TR>
<TR><TD valign=top width=251.8><P style="margin:0pt">Total Cash Cost per Ounce</P>
</TD><TD style="border-right:1pt solid #000000" valign=top width=118.733><P style="margin:0pt">(A*1000)/B</P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1pt solid #000000" valign=top width=22.2><P style="margin:0pt"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-right:1pt solid #000000; border-bottom:1pt solid #000000" valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:4.95pt" align=right>4.50</P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1pt solid #000000" valign=top width=22.2><P style="margin:0pt">$</P>
</TD><TD style="background-color:#E0E0E0; border-right:1pt solid #000000; border-bottom:1pt solid #000000" valign=top width=83.067><P style="margin:0pt; padding-left:11.25pt; padding-right:3.6pt" align=right>3.78</P>
</TD></TR>
<TR><TD valign=top width=251.8><P style="margin:0pt">Total Production Costs per Ounce</P>
</TD><TD style="border-right:1pt solid #000000" valign=top width=118.733><P style="margin:0pt">(B*1000)/C</P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1pt solid #000000" valign=top width=22.2><P style="margin:0pt"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-right:1pt solid #000000; border-bottom:1pt solid #000000" valign=top width=72.8><P style="margin:0pt; padding-left:-1.95pt; padding-right:4.95pt" align=right>5.82</P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1pt solid #000000" valign=top width=22.2><P style="margin:0pt">$</P>
</TD><TD style="background-color:#E0E0E0; border-right:1pt solid #000000; border-bottom:1pt solid #000000" valign=top width=83.067><P style="margin:0pt; padding-left:11.25pt; padding-right:3.6pt" align=right>4.95</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify><FONT FACE="Arial"><B>Liquidity and Capital Resources</B></FONT></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>At March 31, 2005, cash and cash equivalents plus short-term investments were $91.9 million, a $6.3 million decrease from December 31, 2004. &nbsp;Cash flows used in investing activities totaled $14.2 million and consisted primarily of capital expenditures of $10.0 million, mostly at Alamo Dorado and the purchase of short-term investments of $4.7 million. &nbsp;Cash flow provided by operating activities was $2.9 million for the quarter ended March 31, 2005. &nbsp;Financing activities in the first quarter yielded $0.9 million from the exercise of stock options. &nbsp;</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Working capital at March 31, 2005 was $100.4 million, a reduction of $9.6 million from December 31, 2004. &nbsp;The reduction is reflected largely in a $6.3 million decrease in cash and cash equivalents plus short-term investments, a $2.4 million decrease in inventories and a decrease of $2.1 million in accounts receivable partially offset by a $1.3 million decrease in current liabilities.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Capital resources at March 31, 2005 amounted to shareholders&#146; equity of $272.5 million. &nbsp;At March 31, 2005, the Company had 66,926,051 common shares issued and outstanding. &nbsp;During the quarter, the Company filed a preliminary short form shelf prospectus with the securities commissions in Canada and a corresponding registration statement with the SEC. &nbsp;These filings allow the Company to make offerings of common shares, warrants, debt securities subscription receipts or any combination thereof up to $150 million during the next two years.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Based on the Company&#146;s financial position at March 31, 2005 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 to discharge liabilities as they come due. The Company&#146;s did not have any material contractual obligation, or any off-balance sheet arrangements, except as discussed following, at the date of this MD&amp;A.</P>
<P style="font-family: Arial; text-indent: 27pt; margin: 0pt; padding-left: 18pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<hr>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="margin:0pt; page-break-before:always" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify><FONT 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. &nbsp;At March 31, 2005, the Company had sold forward 22,000 tonnes of zinc at a weighted average price of $1,121 per tonne ($0.509 per pound) and 1,425 tonnes of lead at a weighted average price of $633 per tonne ($0.287 per pound). The forward sales commitments for zinc represent approximately 45 per cent of the Company&#146;s forecast zinc production until March 2006. &nbsp;The lead forward sales commitments represent approximately 45 per cent of the Company&#146;s forecast lead production until May 2005. At March 31, 2005, the cash offered prices for zinc and lead were $1,354 and $1,027 per tonne, respectively. The mark to market value at March 31, 2005 was an unrealized loss of $6.1 million. &nbsp;</FONT></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>At the end of the first quarter of 2005, the Company had fixed the price of 600,000 ounces of silver produced during the first quarter and contained in concentrates, which are due to be priced in April and May of 2005 under the Company&#146;s concentrate contracts. &nbsp;The price fixed for these ounces averaged $7.08 per ounce while the spot price of silver was $7.15 on March 31, 2005.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify><B>Exploration and Development Activities</B></P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>Following the positive construction decision for Alamo Dorado in late February 2005, the Company has made good progress towards reaching production at Alamo Dorado by late 2006. &nbsp;Several key personnel were hired during the quarter, including mine maintenance, planning and process managers, a chief metallurgist and senior accounting and finance managers. &nbsp;Critical equipment items, including a fleet of mining trucks, a ball mill, a crusher and laboratory have been secured. &nbsp;The Company spent $4.7 million on equipment and construction related activities for the quarter ended March 31, 2005. &nbsp;Over the remainder of the year, the Company has budgeted to spend an additional $40 million on the construction of Alamo Dorado, which can be funded out of the Company&#146;s treasury. &nbsp;The total capital costs for the project are expected to be $76.6 million, including working capital and a contingency allowance. </P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>The Company continued work on the feasibility study for the 50 per cent owned Manantial Espejo project in Argentina during the quarter. &nbsp;An additional 11,700 meters of infill and extension drilling was completed during the quarter and incorporated into the block models required for open pit and underground mine design. &nbsp;The contract for the feasibility level tailings facility design has been awarded and pump testing on proposed water wells has been initiated. &nbsp;The Company has opened a local office and begun hiring key personnel, including a Community Relations director. Pan American&#146;s share of the feasibility costs in the first three months of 2005 was $1.2 million, which was expensed as incurred. &nbsp;The completed feasibility study for the project is expected by late 2005 at which time a construction decision will be taken. Pan American&#146;s share of costs to complete the feasibility study is expected to be approximately an addit
ional $1.8 million.</P>
<P style="margin:0pt" align=justify><BR></P>
<P style="margin:0pt; font-family:Arial" align=justify>At the San Vicente property, production plans have been delayed several months while the Company negotiates agreements with its joint venture partners, EMUSA and Comibol. &nbsp;Production, which was due to commence in March, 2005, is now expected towards the end of May, 2005. The Company still expects to produce approximately 700,000 ounces from San Vicente in 2005 at a total cost of under $2.50 per ounce; however, an extended delay may impede the Company&#146;s ability to meet this production target. &nbsp;</P>
<P style="margin:0pt" align=justify><BR>
<BR></P>
<P style="font-family: Arial; text-indent: 27pt; margin: 0pt; padding-left: 18pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
<P style="line-height:12.5pt; margin-top:0pt; margin-bottom:5.25pt; font-family:Arial; font-size:10pt" align=justify>&nbsp;</P>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
