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<SEC-DOCUMENT>0001137171-06-001161.txt : 20060505
<SEC-HEADER>0001137171-06-001161.hdr.sgml : 20060505
<ACCEPTANCE-DATETIME>20060505132851
ACCESSION NUMBER:		0001137171-06-001161
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20060503
FILED AS OF DATE:		20060505
DATE AS OF CHANGE:		20060505

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:		06811892

	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>panamerican6k050506.htm
<DESCRIPTION>PAN AMERICAN SILVER 6-K
<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="lscott">
<META NAME="date" CONTENT="04/18/2006">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<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 May, 2006</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">
  <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">May
  5, 2006</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">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">
  &nbsp;
</div>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<hr size="1" color="#000000">
<P style="margin:0pt"><BR></P>
<p style="margin:0pt" align="right"><br>
</p>
<p style="margin:0pt" align="right"><br>
</p>
<p style="margin:0pt; padding-right:-9pt" align="center"><img src="logo.jpg" alt="[q1results001.jpg]" align="middle" height="121.933" width="485.4"></p>
<p style="line-height:16pt; margin-top:7pt; margin-bottom:7pt; font-family:Arial; font-size:14pt" align="center"><font FACE="Arial"><b>2006
FIRST QUARTER REPORT TO SHAREHOLDERS<br>
For the period ending March 31, 2006</b></font></p>
<p style="margin:7pt" align="center"><br>
</p>
<p style="margin:7pt" align="center"><br>
</p>
<p style="margin:7pt" align="center"><br>
</p>
<p style="margin:7pt" align="center"><br>
</p>
<p style="margin:7pt" align="center"><br>
</p>
<p style="margin-top:5pt; margin-bottom:5pt; font-family:Arial" align="right">NASDAQ
Stock Exchange &nbsp;PAAS</p>
<p style="margin-top:5pt; margin-bottom:5pt; font-family:Arial" align="right">Toronto
Stock Exchange &nbsp;&nbsp;PAA</p>
<p style="margin:0pt"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">1</p>
<p style="margin:0pt"><br>
</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; page-break-before:always"><img src="logo.jpg" alt="[q1results003.gif]" align="middle" height="55" width="300"></p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">May 3, 2006</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="line-height:normal; margin:0pt; font-family:Arial" align="center">PAN
AMERICAN SILVER SETS NEW Q1 RECORDS ACROSS THE BOARD:<br>
PRODUCTION AND CASH FLOW UP, COSTS DOWN<br>
<i>(all amounts in US Dollars unless otherwise stated)</i></p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial"><b>FIRST QUARTER HIGHLIGHTS</b></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol">&#183;</font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial">Record
silver production - up 11% over first quarter 2005 to 3.3 million ounces.</font></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol">&#183;</font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial">Record
revenue - up 57% to $45.7 million ($29.1 million in 2005).</font></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol">&#183;</font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial">Record
mine operating earnings - quadrupled to $18.0 million ($3.5 million in 2005).</font></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol">&#183;</font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial">Record
low cash production cost of $2.47 per ounce of silver ($4.50/oz in 2005).</font></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol">&#183;</font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial">Record
cash flow from operations of $8.9 million, before working capital adjustments.</font></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol">&#183;</font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial">Increased
ownership of Manantial Espejo project to 100%. Permits secured and mine
development approved.</font></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol">&#183;</font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial">Raised
$150 million for construction of Manantial Espejo.</font></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol">&#183;</font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial">Alamo
Dorado project remains on budget and on time for late 2006 start-up.</font></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:36pt; text-indent:-18pt; font-family:Symbol"><font FACE="Symbol"><b>&#183;</b></font></p>
<p style="margin:0pt; padding-left:36pt; font-family:Arial"><font FACE="Arial"><b>On
target to double production to over 26 million ounces by 2008</b></font>.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial"><b>FINANCIAL RESULTS</b></p>
<p style="margin:0pt; font-family:Arial">Pan American Silver Corp.'s (NASDAQ:
PAAS, TSX: PAA) consolidated revenue for the first quarter of 2006 was a record
$45.7 million or 57% greater than in 2005 (despite lower concentrate sales than
the year-earlier period) due to significantly higher realized metal prices and
increased silver production and sales. Additional revenue from 4,500 tonnes of
concentrate produced in the first quarter but not shipped is expected to be
recognized in the second and third quarters of 2006. Cash flow from operations
before working capital changes rose to $8.9 million from $1.5 million in 2005.
Mine operating earnings more than quadrupled to $18.0 million versus $3.5
million in 2006.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">Consolidated silver production for the
first quarter totaled a record 3,327,527 ounces, 11% over the first quarter of
2005. All operations except the silver stockpiles recorded higher mill
throughput and higher production.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; padding-right:-9pt; font-family:Arial">Cash production
costs declined 45% over the year-earlier period due primarily to increased
by-product credits from higher base metal prices. Most notably, Morococha
recorded negative unit production costs due to higher metal prices and increased
by-product zinc and lead production. Lower unit costs should continue as long as
base metal prices remain high, so 2006 cash costs should remain significantly
lower than 2005 levels.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">After recording an $11.8 million loss
on commodity and currency forward contracts, of which $6.8 million was non-cash
and unrealized, the Company had a net loss for the quarter of $2.8 million.
Excluding the unrealized portion of the loss on commodity and currency
contracts, the Company recorded net income of $4.0 million for the current
quarter. &nbsp;Pan America will receive $1,759 per tonne ($0.80 per pound) for
its remaining zinc forward sale positions of 10,500 tonnes during 2006.
&nbsp;This represents approximately 35% of Company's estimated zinc production
for the year. &nbsp;The mark to market value of these remaining positions will
continue to be recorded in income at the end of each quarter and could increase
or decrease significantly depending on the price of zinc at the end of each
quarter. &nbsp;The Company will sell the balance of its 2006 zinc production at
the spot price throughout the year.</p>
<p style="margin:0pt"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">1</p>
<hr>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">&nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; page-break-before:always"><br>
</p>
<p style="margin:0pt; font-family:Arial">Working capital at March 31, 2006,
including cash and short-term investments of $48.6 million, was $63.1 million, a
decrease of $11.7 million from December 31, 2005 reflecting the ongoing
expenditures for the development of the Alamo Dorado mine in Mexico. Working
capital at April 21, 2006 increased substantially, when the net proceeds of
approximately $142.8 million from the equity financing were received.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">Geoff Burns, President and CEO of Pan
American commented: &quot;We are definitely seeing the benefit of the strategic
acquisitions we made when silver prices were low. With assets like Morococha,
Alamo Dorado and now Manantial Espejo set to double our production to over 26
million ounces by 2008, and with a much better price environment, we should see
our future cash flow and income continue to climb. All of our mines turned in
excellent production performances this quarter and we should realize all the
financial benefits over the next two quarters as our inventory of concentrate is
shipped and sold. We are off to a great start for 2006.&quot;</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial"><b>OPERATIONS AND DEVELOPMENT
HIGHLIGHTS</b></p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial"><b>PERU</b></p>
<p style="margin:0pt; font-family:Arial">The <b>Morococha</b> mine was Pan
American's best performing operation in the first quarter of 2006, producing a
record 735,426 ounces of silver as refurbishments to the mill allowed for
increased throughput. &nbsp;Strong base metal prices and increased zinc
production resulted in a dramatic decrease in cash costs which were negative
$1.85/oz for the quarter. &nbsp;Zinc production of 5,086 tonnes rose 36%, lead
production increased 35% and copper production rose 21%. Mine development
continues to moves towards establishing access to the new lower cost, bulk
mineable zones discovered in 2005.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">The <b>Quiruvilca</b> mine also turned
in an outstanding performance in the first quarter, producing 608,637 ounces of
silver at a cash cost of $0.92/oz, down substantially from $4.20/oz realized in
the first quarter of 2005. Production of silver, zinc and lead all benefited
from higher mill throughput and silver grades as compared to the first quarter
of 2005.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">The <b>Huaron</b> mine achieved a
substantial turnaround in the first quarter, increasing mill throughput by 11%
to offset slightly lower silver and zinc grades. Cash production costs on
934,480 ounces of silver declined 22% to $3.69/oz. The improved performance is
expected to continue as adjustments in the mill and a more balanced ore
extraction plan yield better metal recoveries.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">The <b>Silver Stockpile</b> operation
sold 173,188 ounces of silver in the first quarter. Costs rose as a reflection
of higher silver prices which increased the royalty being paid under the
operation's purchase agreement.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial"><b>MEXICO</b></p>
<p style="margin:0pt; font-family:Arial">Construction of the <b>Alamo Dorado</b>
mine is now approximately 65% complete and the project remains on budget and on
time for start-up in the fourth quarter of 2006. Approximately $12.4 million was
spent on development during the quarter, with $30 million remaining to be spent
in 2006 to complete the mine. By the end of this year, Alamo Dorado is expected
to produce an average 5 million ounces of silver annually at a cash cost of
$3.25/oz.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">The <b>La Colorada</b> mine performed
to expectations in the first quarter with production of 797,246 ounces of
silver, an increase of 16% over 2005, and stable cash costs of $5.76/oz. During
the quarter, approximately $1.0 million was invested in the new sulphide plant,
which is now due to be completed in early May for commissioning in mid-May. The
sulphide plant will add approximately 800,000 ounces of production this year,
bringing the mine's total production to 4 million ounces of silver in 2006.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">2</p>
<hr>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">&nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; page-break-before:always"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial"><b>ARGENTINA</b></p>
<p style="margin:0pt; font-family:Arial">In late March the Company purchased the
outstanding 50% of <b>Manantial Espejo</b> for 1.95 million shares and made a
decision to immediately proceed with development. The Company has begun securing
key personnel, awarding critical contracts, and initiating basic engineering.
Starting in early 2008, the mine is expected to produce 4.3 million ounces of
silver and 62,000 ounces of gold annually with average life of mine cash costs
of $0.02/oz of silver, net of gold by-product credits. Capital costs for the
project are expected to be $112.3 million.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial"><b>BOLIVIA</b></p>
<p style="margin:0pt; font-family:Arial"><b>San Vicente</b> profitably produced
78,550 ounces of silver in the first quarter at a cash cost of $2.85 per ounce.
Work is now focused on the expansion project designed to increase San Vicente
production to 750 tonnes per day over the next 18 months. &nbsp;Pan American
(55%) operates San Vicente in a joint venture with EMUSA (40%), a local Bolivian
mining company and Trafigura (5%), a global concentrate and metals trading
company. &nbsp;Pan American's investment in San Vicente was $4.2 million as of
March 31, 2006.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial"><b>SILVER MARKETS</b></p>
<p style="margin:0pt; font-family:Arial">Silver continued its upward trend
during the first quarter, opening at $8.83/oz and closing the quarter at
$11.75/oz. The launch of the silver Exchange Traded Fund has fueled speculative
interest throughout 2006 and in April, silver hit a high of $14.31 and has
remained very volatile. Physical interest in silver remains strong as marked by
the sale of the 500,000<sup>th</sup> ounce of silver from the Pan American
Silver line of bullion products produced and sold by the Northwest Territorial
Mint available through their website (<font COLOR="#0000FF"><u>www.silverpa.com</u></font>).
These products now include a new 100 ounce bar embossed with Pan American's
name and trademark "silver hammer" <img border="0" src="hammer.jpg" width="15" height="13">.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial">Pan American will host a conference
call to discuss its financial and operating results on Thursday, May 4 at 8:00
am (PST). North American participants please dial toll-free 1-877-427-0636 and
international participants dial 1-973-935-2970. The call may also be accessed
from the home page of the Company's website at <font COLOR="#0000FF"><u>www.panamericansilver.com</u></font><u>.</u>
&nbsp;It will be available for replay for one week after the call by dialling
1-877-519-4471 (North American callers) or 1-973-341-3080 (International
callers) and using replay pin number 7305033.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin-left: 0pt; margin-right: 0pt; margin-top: 0pt; margin-bottom: -13pt" align="right">1</p>
<p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">CAUTIONARY
NOTE</p>
<p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Some
of the statements in the 2005 annual report and accompanying financial
statements are forward-looking statements and as such are based on an assumed
set of economic conditions and courses of action. These include estimates of
earnings, reserves and resources, 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;There is a significant risk that actual results will vary, perhaps
materially, from results projected 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's Form 40-F.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt"><br>
</p>
<hr>
<p style="margin:0pt; page-break-before:always"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="179.15"></td>
    <td width="49.8"></td>
    <td width="57.5"></td>
    <td width="36.8"></td>
    <td width="8.7"></td>
    <td width="0.3"></td>
    <td width="59.05"></td>
    <td width="10.8"></td>
    <td width="65.7"></td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial"><b>Financial &amp; Operating
      Highlights</b></p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="76.667">&nbsp;</td>
    <td valign="top" width="241.8" colspan="6" rowspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="76.667">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="76.667">&nbsp;</td>
    <td valign="top" width="49.067">&nbsp;</td>
    <td width="192.733" colspan="5">
      <p style="margin:0pt; font-family:Arial" align="center"><b>Three months
      ended</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="76.667">&nbsp;</td>
    <td valign="top" width="49.067">&nbsp;</td>
    <td width="192.733" colspan="5">
      <p style="margin:0pt; font-family:Arial" align="center"><b>March 31,</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="238.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="66.4">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="76.667">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="49.067">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="90.733" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2006</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="102" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2005</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="76.667">&nbsp;</td>
    <td valign="top" width="241.8" colspan="6">&nbsp;</td>
  </tr>
  <tr>
    <td valign="bottom" width="623.733" colspan="9">
      <p style="margin:0pt; font-family:Arial"><b>Consolidated Financial
      Highlights (in thousands of US dollars)</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">(Unaudited)</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Net loss for the period</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">(2,761)</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">(4,223)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Loss per share</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">&nbsp;(0.04)</p>
    </td>
    <td valign="bottom" width="14.4">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">&nbsp;&nbsp;(0.06)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Mine operating earnings</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">17,976</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">&nbsp;3,488</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Cash flow from operations</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">7,788</p>
    </td>
    <td valign="bottom" width="14.4">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">2,858</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Capital spending</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">16,261</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">10,003</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Exploration expenses</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">1,234</p>
    </td>
    <td valign="bottom" width="14.4">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">1,424</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Cash and short-term investments</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">48,643</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">91,860</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Working capital</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">63,108</p>
    </td>
    <td valign="bottom" width="14.4">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">100,351</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="442.6" colspan="5">
      <p style="margin:0pt; font-family:Arial"><b>Consolidated Ore Milled &amp;
      Metals Recovered to Concentrate</b></p>
    </td>
    <td valign="bottom" width="79.133" colspan="2">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Tonnes milled</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">456,339</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">393,594</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Silver metal - ounces</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">3,327,527</p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">2,995,702</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Zinc metal - tonnes</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">10,700</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">8,871</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Lead metal - tonnes</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">3,954</p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">3,675</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Copper metal - tonnes</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">1,041</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">927</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="431" colspan="4">
      <p style="margin:0pt; text-indent:-229.9pt; font-family:Arial"><b>Consolidated
      Cost per Ounce of Silver (net of by-product credits)</b></p>
    </td>
    <td valign="bottom" width="11.6">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="bottom" width="79.133" colspan="2">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total cash
      cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">2.47</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">4.50</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total
      production cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">3.92</p>
    </td>
    <td valign="bottom" width="14.4">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">5.82</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial"><b>In thousands of US dollars</b></p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="431" colspan="4">
      <p style="margin:0pt; font-family:Arial">Direct operating costs,
      royalties, treatment</p>
    </td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">and refining charges</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">37,651</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">28,805</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">By-product credits</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">(30,176)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="14.4">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="87.6">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">(16,563)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Cash operating costs</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">7,475</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">12,242</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Depreciation, amortization &amp;
      reclamation</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">4,401</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="14.4">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">3,570</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Production costs</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="bottom" width="12" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">11,876</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="bottom" width="14.4">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">15,812</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="431" colspan="4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Payable ounces of silver (used in
      cost per ounce calculations)</p>
    </td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">3,031,459</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right">2,718,073</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial"><b>Average Metal Prices</b></p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="text-indent: 13.7pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Silver - London Fixing</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">9.72</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">6.97</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Zinc - LME Cash Settlement per
      pound</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">1.02</p>
    </td>
    <td valign="bottom" width="14.4">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">0.60</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Lead - LME Cash Settlement per
      pound</p>
    </td>
    <td valign="top" width="192.133" colspan="3" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="78.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">0.56</p>
    </td>
    <td valign="bottom" width="14.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 13.7pt; margin: 0pt" align="right">0.44</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">
      <p style="margin:0pt; font-family:Arial">Copper - LME Cash Settlement per
      pound</p>
    </td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom">
      <p style="font-family: Arial; margin: 0pt" align="right">2.24</p>
    </td>
    <td valign="bottom" width="14.4">
      <p style="margin:0pt; font-family:Arial" align="center">$</p>
    </td>
    <td valign="bottom" width="87.6">
      <p style="font-family: Arial; margin: 0pt" align="right">1.48</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="238.867">&nbsp;</td>
    <td valign="top" width="192.133" colspan="3">&nbsp;</td>
    <td valign="bottom" width="12" colspan="2">&nbsp;</td>
    <td valign="bottom" width="78.733">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="bottom" width="14.4">&nbsp;</td>
    <td valign="bottom" width="87.6">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">2</p>
<hr>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; page-break-before:always"><br>
</p>
<p style="margin:0pt"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="179.15"></td>
    <td width="49.8"></td>
    <td width="26.5"></td>
    <td width="41.5"></td>
    <td width="18.1"></td>
    <td width="67.8"></td>
    <td width="17.15"></td>
    <td width="67.8"></td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial"><b>Mine Operations Highlights</b></p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="203.667" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>Three Months
      ended</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="203.667" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>March 31</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="238.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="66.4">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="35.333">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="55.333">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="114.533" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2006</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="113.267" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2005</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial"><b>Huaron Mine</b></p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="114.533" colspan="2">&nbsp;</td>
    <td valign="top" width="113.267" colspan="2">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">&nbsp;</td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Tonnes milled</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">162,518</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">146,010</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">Average silver grade - grams per
      tonne</p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">215</p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">218</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Average zinc grade</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:12.4pt; font-family:Arial" align="right">2.77%</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:11.95pt; font-family:Arial" align="right">3.02%</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">Silver - ounces</p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">934,480</p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">884,146</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Zinc - tonnes</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">2,892</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">3,179</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">Lead - tonnes</p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">1,819</p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">1,904</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Copper - tonnes</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">403</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">381</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total cash
      cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-left:-0.45pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:20.8pt; font-family:Arial" align="right">3.69</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:21.05pt; font-family:Arial" align="right">4.74</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total
      production cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">
      <p style="margin:0pt; padding-left:-0.45pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; padding-right:20.8pt; font-family:Arial" align="right">4.90</p>
    </td>
    <td valign="top" width="22.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; padding-right:21.05pt; font-family:Arial" align="right">5.91</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial"><b>In thousands of US dollars</b></p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="305.267" colspan="2">
      <p style="margin:0pt; font-family:Arial">Direct operating costs,
      royalties, treatment and</p>
    </td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">refining charges</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-left:-0.45pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16.5pt; font-family:Arial">12,562</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:15.55pt; font-family:Arial">10,241</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">By-product credits</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="66.4">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="35.333">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="55.333">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="24.133">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:14.8pt; font-family:Arial">(9,434)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="22.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:13.85pt; font-family:Arial">(6,439)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Cash operating costs</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21.5pt; font-family:Arial">3,128</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:20.55pt; font-family:Arial">3,802</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="305.267" colspan="2">
      <p style="margin:0pt; font-family:Arial">Depreciation, amortization and
      reclamation</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="35.333">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="55.333">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="24.133">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:21.5pt; font-family:Arial">1,026</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="22.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:28.05pt; font-family:Arial">944</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">Production costs</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="66.4">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="35.333">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="55.333">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="24.133">
      <p style="margin:0pt; padding-left:-0.45pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:21.5pt; font-family:Arial">4,154</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="22.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1.5pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:20.55pt; font-family:Arial">4,746</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">&nbsp;</td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="395.933" colspan="4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Payable ounces of silver (used in
      cost per ounce calculation)</p>
    </td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11.5pt; font-family:Arial">847,290</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">802,794</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial"><b>Quiruvilca Mine</b></p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Tonnes milled</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16.5pt; font-family:Arial">95,520</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial">89,925</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">Average silver grade - grams per
      tonne</p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:29pt; font-family:Arial">227</p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">223</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Average zinc grade</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:12.4pt; font-family:Arial" align="right">2.99%</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:11.25pt; font-family:Arial" align="right">3.21%</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">Silver - ounces</p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:11.5pt; font-family:Arial">608,637</p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">563,388</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Zinc - tonnes</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21.5pt; font-family:Arial">2,439</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">2,451</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">Lead - tonnes</p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:29pt; font-family:Arial">665</p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">681</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Copper - tonnes</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:29pt; font-family:Arial">354</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">321</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total cash
      cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-left:-0.45pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:20.8pt; font-family:Arial" align="right">0.92</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:25.5pt; font-family:Arial" align="right">4.20</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total
      production cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">
      <p style="margin:0pt; padding-left:-0.45pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; padding-right:20.8pt; font-family:Arial" align="right">2.05</p>
    </td>
    <td valign="top" width="22.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4">
      <p style="margin:0pt; padding-right:25.5pt; font-family:Arial" align="right">4.76</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial"><b>In thousands of US dollars</b></p>
    </td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="305.267" colspan="2">
      <p style="margin:0pt; font-family:Arial">Direct operating costs,
      royalties, treatment and</p>
    </td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">refining charges</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-left:-0.45pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:22.2pt; font-family:Arial">7,664</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">6,668</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">By-product credits</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="66.4">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="35.333">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="55.333">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="24.133">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:15.5pt; font-family:Arial">(7,144)</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="22.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:14.3pt; font-family:Arial">(4,465)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Cash operating costs</p>
    </td>
    <td valign="top" width="66.4" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="35.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="55.333" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:29.7pt; font-family:Arial">520</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">2,203</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="305.267" colspan="2">
      <p style="margin:0pt; font-family:Arial">Depreciation, amortization and
      reclamation</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="35.333">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="55.333">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="24.133">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:29.7pt; font-family:Arial">640</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="22.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">291</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="238.867">
      <p style="margin:0pt; font-family:Arial">Production costs</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="66.4">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="35.333">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="55.333">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="24.133">
      <p style="margin:0pt; padding-left:-0.45pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:22.2pt; font-family:Arial">1,160</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="22.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="90.4">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">2,494</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="238.867">&nbsp;</td>
    <td valign="top" width="66.4">&nbsp;</td>
    <td valign="top" width="35.333">&nbsp;</td>
    <td valign="top" width="55.333">&nbsp;</td>
    <td valign="top" width="24.133">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="22.867">&nbsp;</td>
    <td valign="top" width="90.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="395.933" colspan="4" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Payable ounces of silver (used in
      cost per ounce calculation)</p>
    </td>
    <td valign="top" width="24.133" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:12.2pt; font-family:Arial">566,492</p>
    </td>
    <td valign="top" width="22.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="90.4" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">524,081</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">3</p>
<hr>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; page-break-before:always"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="212.5"></td>
    <td width="96.75"></td>
    <td width="17.65"></td>
    <td width="61.6"></td>
    <td width="8.9"></td>
    <td width="70.4"></td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td width="187.867" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>Three months
      ended</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td width="187.867" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>March 31,</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="283.333">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="129">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="23.533">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="94" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2006</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="93.867">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2005</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial"><b>Morococha Mine</b></p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Tonnes milled</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">132,773</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">110,528</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Average silver grade - grams per
      tonne</p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">201</p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">222</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Average zinc grade</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:6.15pt; font-family:Arial" align="right">4.46%</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:14.75pt; font-family:Arial" align="right">4.06%</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Silver - ounces</p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">735,426</p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">653,534</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Zinc - tonnes</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">5,086</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">3,242</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Lead - tonnes</p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">1,470</p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">1,091</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Copper - tonnes</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">270</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">224</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total cash
      cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:11.75pt; font-family:Arial" align="right">(1.85)</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:24.55pt; font-family:Arial" align="right">3.72</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total
      production cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="82.133">
      <p style="margin:0pt; padding-right:11.75pt; font-family:Arial" align="right">(0.23)</p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt; padding-right:24.55pt; font-family:Arial" align="right">5.47</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial"><b>In thousands of US dollars</b></p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Direct operating costs,
      royalties, treatment and</p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">refining charges</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial">11,411</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">7,529</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">By-product credits</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="129">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="23.533">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="82.133">
      <p style="margin:0pt; text-indent:9.3pt; font-family:Arial">(12,622)</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="11.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="93.867">
      <p style="margin:0pt; text-indent:14.3pt; font-family:Arial">(5,345)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Cash operating costs</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:14.3pt; font-family:Arial">(1,211)</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">2,184</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Depreciation, amortization,
      reclamation</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="129">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="23.533">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="82.133">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">1,060</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="11.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="93.867">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">1,031</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Production costs</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="129">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="82.133">
      <p style="margin:0pt; text-indent:21.8pt; font-family:Arial">(151)</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="11.867">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="93.867">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">3,215</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="412.333" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Payable ounces of silver (used in
      cost per ounce calculations)</p>
    </td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">655,112</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11.1pt; font-family:Arial">587,685</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="412.333" colspan="2">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="412.333" colspan="2">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial"><b>La Colorada Mine</b></p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Tonnes milled</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial">56,541</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial">47,130</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Average silver grade - grams per
      tonne</p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">511</p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt; text-indent:28.5pt; font-family:Arial">547</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Silver - ounces</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">797,246</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">688,619</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total cash
      cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:16.5pt; font-family:Arial" align="right">5.76</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-right:25.5pt; font-family:Arial" align="right">5.58</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total
      production cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="82.133">
      <p style="margin:0pt; padding-right:16.5pt; font-family:Arial" align="right">7.84</p>
    </td>
    <td valign="top" width="11.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="93.867">
      <p style="margin:0pt; padding-right:25.5pt; font-family:Arial" align="right">7.48</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial"><b>In thousands of US dollars</b></p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Direct operating costs,
      royalties, treatment and</p>
    </td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">refining charges</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:20.25pt; font-family:Arial">4,968</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">4,146</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">By-product credits</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="129">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="23.533">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="82.133">
      <p style="margin:0pt; text-indent:21.05pt; font-family:Arial">(392)</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="11.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="93.867">
      <p style="margin:0pt; text-indent:21.8pt; font-family:Arial">(314)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Cash operating costs</p>
    </td>
    <td valign="top" width="129" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">4,576</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">3,832</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Depreciation, amortization,
      reclamation</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="129">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="23.533">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="82.133">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">1,655</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="11.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="93.867">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">1,304</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="283.333">
      <p style="margin:0pt; font-family:Arial">Production costs</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="129">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="82.133">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">6,231</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="11.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="93.867">
      <p style="margin:0pt; text-indent:21pt; font-family:Arial">5,136</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="412.333" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Payable ounces of silver (used in
      cost per ounce calculations)</p>
    </td>
    <td valign="top" width="23.533" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="82.133" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">794,468</p>
    </td>
    <td valign="top" width="11.867" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="93.867" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:11pt; font-family:Arial">686,897</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="412.333" colspan="2">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="283.333">&nbsp;</td>
    <td valign="top" width="129">&nbsp;</td>
    <td valign="top" width="23.533">&nbsp;</td>
    <td valign="top" width="82.133">&nbsp;</td>
    <td valign="top" width="11.867">&nbsp;</td>
    <td valign="top" width="93.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">4</p>
<hr>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; page-break-before:always"><br>
</p>
<p style="margin:0pt"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="217.5"></td>
    <td width="99"></td>
    <td width="18"></td>
    <td width="63"></td>
    <td width="9"></td>
    <td width="72"></td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="192" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>Three Months
      ended</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="192" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>March 31</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="290">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="132">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="24">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="84">
      <p style="margin:0pt; font-family:Arial" align="center"><b><u>2006</u></b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="12">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="96">
      <p style="margin:0pt; font-family:Arial" align="center"><b><u>2005</u></b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="margin:0pt; font-family:Arial"><b>Pyrite Stockpile</b></p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Tonnes sold</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial" align="right">14,935</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial" align="right">17,737</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">Average silver grade - grams per
      tonne</p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">361</p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">361</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Silver - ounces</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">173,188</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">206,015</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total cash
      cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">2.67</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">1.89</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total
      production cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">2.67</p>
    </td>
    <td valign="top" width="12">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">1.89</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="margin:0pt; font-family:Arial"><b>In thousands of US dollars</b></p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422" colspan="2">
      <p style="margin:0pt; font-family:Arial">Direct operating costs,
      royalties, treatment</p>
    </td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">and refining charges</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">262</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">221</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">By-product credits</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="132">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="24">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="12">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Cash operating costs</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">262</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">221</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">Depreciation, amortization,
      reclamation</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="132">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="24">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="12">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">Production costs</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="132">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="24">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">262</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="12">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">221</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Payable ounces of silver (used in
      cost per ounce calculations)</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial" align="right">98,011</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">163,994</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt" align="justify"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="217.5"></td>
    <td width="99"></td>
    <td width="18"></td>
    <td width="63"></td>
    <td width="9"></td>
    <td width="72"></td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000" valign="top" width="290">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="132">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="24">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="84">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="12">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="96">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="margin:0pt; font-family:Arial"><b>San Vicente Mine (55%
      ownership)</b></p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Tonnes milled</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">8,987</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">Average silver grade - grams
      per tonne</p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">361</p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Average zinc grade - percent</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">3.99%</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">Silver - ounces</p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial" align="right">78,550</p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Zinc - tonnes</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">284</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">Copper - tonnes</p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">15</p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total cash
      cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">2.85</p>
    </td>
    <td valign="top" align="right" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="line-height:normal; margin:0pt; font-family:Arial">Total
      production cost per ounce <small>(1)</small></p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">3.14</p>
    </td>
    <td valign="top" align="right">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12" align="right">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12" align="right">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">
      <p style="margin:0pt; font-family:Arial"><b>In thousands of US dollars</b></p>
    </td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12" align="right">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422" colspan="2">
      <p style="margin:0pt; font-family:Arial">Direct operating costs,
      royalties, treatment</p>
    </td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12" align="right">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">and refining charges</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">783</p>
    </td>
    <td valign="top" align="right" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">By-product credits</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="132">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="24">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">(584)</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="12" align="right">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Cash operating costs</p>
    </td>
    <td valign="top" width="132" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">199</p>
    </td>
    <td valign="top" width="12" align="right" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">Depreciation, amortization,
      reclamation</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="132">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="24">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">20</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="12" align="right">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="290">
      <p style="margin:0pt; font-family:Arial">Production costs</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="132">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="24">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">219</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" align="right">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1pt solid #000000" valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422" colspan="2" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Payable ounces of silver (used in
      cost per ounce calculations)</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:16pt; font-family:Arial" align="right">70,086</p>
    </td>
    <td valign="top" width="12" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>
    </td>
    <td valign="top" width="96" style="background-color: #BBE3E1">
      <p style="text-indent: 16pt; font-family: Arial; margin: 0pt" align="right">N/A</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="290">&nbsp;</td>
    <td valign="top" width="132">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">
      <p style="font-family: Arial; text-indent: 16pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td valign="top" width="96">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:normal; margin:0pt; font-family:Arial; font-size:7pt" align="justify">(1)
Cash cost per ounce is a non-GAAP measurement and investors are cautioned not to
place undue reliance on it and are urged to read all GAAP accounting disclosures
presented in the unaudited consolidated financial statements and accompanying
footnotes. &nbsp;In addition, see the reconciliation of operating costs to "Cash
Cost per Ounce of Payable Silver" set forth in the Management Discussion and
Analysis.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt" align="justify"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">5</p>
<hr>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; page-break-before:always" align="justify"><br>
<br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="298"></td>
    <td width="12.55"></td>
    <td width="63.4"></td>
    <td width="19.9"></td>
    <td width="16.1"></td>
    <td width="38.15"></td>
    <td width="38.15"></td>
  </tr>
  <tr>
    <td valign="top" width="648.333" colspan="7">
      <p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="center"><b>PAN
      AMERICAN SILVER CORP</b>.</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="648.333" colspan="7">
      <p style="margin:0pt; font-family:Arial" align="center">Consolidated
      Balance Sheets</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="648.333" colspan="7">
      <p style="margin:0pt; font-family:Arial" align="center">(In thousands of
      U.S. dollars)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">&nbsp;</td>
    <td valign="top" width="101.267" colspan="2">&nbsp;</td>
    <td valign="top" width="26.533">&nbsp;</td>
    <td valign="top" width="72.333" colspan="2">&nbsp;</td>
    <td valign="top" width="50.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="397.333">&nbsp;</td>
    <td valign="top" width="101.267" colspan="2">&nbsp;</td>
    <td valign="top" width="26.533">&nbsp;</td>
    <td valign="top" width="72.333" colspan="2">&nbsp;</td>
    <td valign="top" width="50.867">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="397.333">&nbsp;</td>
    <td valign="top" width="127.8" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>March 31 2006</b></p>
    </td>
    <td width="123.2" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>Dec. 31 2005</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="397.333">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="127.8" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>(Unaudited)</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="123.2" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>(Audited)</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial"><b>Assets</b></p>
    </td>
    <td valign="top" width="16.733">&nbsp;</td>
    <td width="111.067" colspan="2">&nbsp;</td>
    <td width="123.2" colspan="3">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial"><b>Current</b></p>
    </td>
    <td valign="top" width="16.733">&nbsp;</td>
    <td width="111.067" colspan="2">&nbsp;</td>
    <td width="123.2" colspan="3">&nbsp;</td>
  </tr>
  <tr>
    <td width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Cash and cash
      equivalents</p>
    </td>
    <td style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;$</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">42,532</p>
    </td>
    <td width="21.467" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">29,291</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Short-term
      investments</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">6,111</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">26,031</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Accounts
      receivable, net of $Nil provision for doubtful accounts</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">29,048</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">27,342</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Inventories
      (note 3)</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">19,141</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">16,667</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Unrealized gain
      on commodity contracts</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">184</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">863</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="397.333">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Prepaid expenses</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">2,251</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">1,935</p>
    </td>
  </tr>
  <tr>
    <td width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Total Current Assets</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">99,267</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">102,129</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Mineral property, plant and
      equipment, net (note 5)</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">101,156</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">99,815</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Construction in progress (note 6)</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">46,732</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">34,306</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Investment in non-producing
      properties (note 6)</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">122,581</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">123,259</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Direct smelting ore (note 3)</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">2,118</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">2,236</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Other assets</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">522</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">535</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="397.333">
      <p style="margin:0pt; font-family:Arial">Total Assets</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">372,376</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="21.467">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">362,280</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">&nbsp;</td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial"><b>Liabilities</b></p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial"><b>Current</b></p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Accounts payable
      and accrued liabilities</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">24,773</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">22,333</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Unrealized loss
      on commodity contracts</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">10,913</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">4,810</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="397.333">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Current portion
      of non-current liabilities</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">473</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">223</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Total Current Liabilities</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">36,159</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">27,366</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Liability component of
      convertible debentures</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">108</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">126</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Provision for asset retirement
      obligation and reclamation (note 7)</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">40,383</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">39,378</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Provision for future income taxes</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">31,786</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">32,396</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Severance indemnities and
      commitments</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">1,519</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">1,894</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Non-controlling interest</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">5,022</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">3,798</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Total Liabilities</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">114,977</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">104,958</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">&nbsp;</td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial"><b>Shareholders' Equity</b></p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Share capital (note 8)</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Authorized:</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; text-indent:18pt; font-family:Arial">100,000,000
      common shares of no par value</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; text-indent:9pt; font-family:Arial">Issued:</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; text-indent:18pt; font-family:Arial">December 31,
      2005 - 67,564,903 common shares</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:18pt; font-family:Arial">March 31, 2006
      - &nbsp;67,736,511 common shares</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">391,942</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">388,830</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333">
      <p style="margin:0pt; text-indent:18pt; font-family:Arial">Equity
      component of convertible debentures</p>
    </td>
    <td valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">699</p>
    </td>
    <td valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">762</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="397.333" style="background-color: #BBE3E1">
      <p style="margin:0pt; text-indent:18pt; font-family:Arial">Additional paid
      in capital</p>
    </td>
    <td valign="top" width="16.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="111.067" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">12,919</p>
    </td>
    <td valign="top" width="21.467" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="101.733" colspan="2" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">13,117</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="397.333">
      <p style="margin:0pt; text-indent:18pt; font-family:Arial">Deficit</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">(148,161)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">(145,387)</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="397.333">
      <p style="margin:0pt; font-family:Arial">Total Shareholders' Equity</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">257,399</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="21.467">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">257,322</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:2pt double #000000" width="397.333">
      <p style="margin:0pt; font-family:Arial">Total Liabilities and
      Shareholders' Equity</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="16.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="111.067" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">372,376</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="21.467">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="101.733" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">362,280</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="473.75"></td>
  </tr>
  <tr>
    <td valign="top" width="631.667">
      <p style="margin:0pt; font-family:Arial" align="right">See accompanying
      notes to consolidated financial statements</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt" align="center"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">6</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always" align="center"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial" align="center">Consolidated Statements
of Operations</p>
<p style="margin:0pt; font-family:Arial" align="center">(Unaudited -in thousands
of US Dollars, except for shares and per share amounts)</p>
<p style="margin:0pt"><br>
</p>
<center>
<table style="font-size: 10pt" cellspacing="0" height="808">
  <tr>
    <td width="304.35" height="19"></td>
    <td height="19"></td>
    <td width="60.3" height="19"></td>
    <td height="19"></td>
    <td height="19"></td>
  </tr>
  <tr>
    <td style="border-bottom: 0.5pt solid #000000" valign="top" width="405.8" rowspan="4" height="81">&nbsp;</td>
    <td valign="top" colspan="4" height="19">&nbsp;</td>
  </tr>
  <tr>
    <td colspan="4" height="19">
      <p style="margin:0pt; font-family:Arial" align="center"><b>Three months
      ended</b></p>
    </td>
  </tr>
  <tr>
    <td colspan="4" height="19">
      <p style="margin:0pt; font-family:Arial" align="center"><b>March 31,</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom: 1 solid #000000" colspan="2" height="18">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2006</b></p>
    </td>
    <td style="border-bottom: 1 solid #000000" colspan="2" height="18">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2005</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Sales</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="80.4" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">45,744</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">29,086</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18">
      <p style="margin:0pt; font-family:Arial">Cost of sales</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">24,297</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">22,380</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" width="405.8" height="17">
      <p style="margin:0pt; font-family:Arial">Depreciation and amortization</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" width="80.4" height="17">
      <p style="font-family: Arial; margin: 0pt" align="right">3,471</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">
      <p style="font-family: Arial; margin: 0pt" align="right">3,218</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18">
      <p style="margin:0pt; font-family:Arial"><b>Mine operating earnings</b></p>
    </td>
    <td valign="bottom" height="18"><b>&nbsp;</b></td>
    <td valign="bottom" width="80.4" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>17,976</b></p>
    </td>
    <td valign="bottom" height="18"><b>&nbsp;</b></td>
    <td valign="bottom" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>3,488</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="34">&nbsp;</td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" width="80.4" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">General and administrative,
      including stock-based compensation</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">1,933</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">1,563</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18">
      <p style="margin:0pt; font-family:Arial">Exploration</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">1,234</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">1,424</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" width="405.8" height="17">
      <p style="margin:0pt; font-family:Arial">Asset retirement and reclamation</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" width="80.4" height="17">
      <p style="font-family: Arial; margin: 0pt" align="right">614</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">
      <p style="font-family: Arial; margin: 0pt" align="right">527</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18">
      <p style="margin:0pt; font-family:Arial">Operating earnings (loss)</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">14,195</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">(26)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="34">&nbsp;</td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" width="80.4" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Loss on commodity contracts</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(11,830)</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(3,337)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18">
      <p style="margin:0pt; font-family:Arial">Interest and financing expenses</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">(146)</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">(93)</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" width="405.8" height="17">
      <p style="margin:0pt; font-family:Arial">Investment and other income</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" width="80.4" height="17">
      <p style="font-family: Arial; margin: 0pt" align="right">257</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 1 solid #000000" valign="bottom" height="17">
      <p style="font-family: Arial; margin: 0pt" align="right">256</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18">
      <p style="margin:0pt; font-family:Arial">Income (loss) before taxes and
      non-controlling interest</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">2,476</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">(3,200)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Income tax provision</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,013)</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(942)</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom: 1 solid #000000" valign="bottom" width="405.8" height="17">
      <p style="margin:0pt; font-family:Arial">Non-controlling interest</p>
    </td>
    <td style="border-bottom: 1 solid #000000" valign="bottom" height="17">&nbsp;</td>
    <td style="border-bottom: 1 solid #000000" valign="bottom" width="80.4" height="17">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,224)</p>
    </td>
    <td style="border-bottom: 1 solid #000000" valign="bottom" height="17">&nbsp;</td>
    <td style="border-bottom: 1 solid #000000" valign="bottom" height="17">
      <p style="font-family: Arial; margin: 0pt" align="right">(81)</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom-style: double; border-bottom-color: #000000" valign="bottom" width="405.8" height="20">
      <p style="margin:0pt; font-family:Arial"><b>Net loss for the period</b></p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom-style: double; border-bottom-color: #000000" valign="bottom" height="20">
      <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom-style: double; border-bottom-color: #000000" valign="bottom" width="80.4" height="20">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>(2,761)</b></p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom-style: double; border-bottom-color: #000000" valign="bottom" height="20">
      <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom-style: double; border-bottom-color: #000000" valign="bottom" height="20">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>(4,223)</b></p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="34">&nbsp;</td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" width="80.4" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="34">&nbsp;</td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" width="80.4" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="34">
      <p style="margin:0pt; font-family:Arial">Attributable to common
      shareholders:</p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" width="80.4" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="34">&nbsp;</td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" width="80.4" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Net loss for the period</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="80.4" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(2,761)</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,223)</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom: 1 solid #000000" valign="bottom" width="405.8" height="16">
      <p style="margin:0pt; font-family:Arial">Accretion of convertible
      debentures</p>
    </td>
    <td style="border-bottom: 1 solid #000000" valign="bottom" height="16">&nbsp;</td>
    <td style="border-bottom: 1 solid #000000" valign="bottom" width="80.4" height="16">
      <p style="font-family: Arial; margin: 0pt" align="right">(13)</p>
    </td>
    <td style="border-bottom: 1 solid #000000" valign="bottom" height="16">&nbsp;</td>
    <td style="border-bottom: 1 solid #000000" valign="bottom" height="16">
      <p style="font-family: Arial; margin: 0pt" align="right">(3)</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 2 solid #000000" valign="bottom" width="405.8" height="18">
      <p style="margin:0pt; text-indent:-186.5pt; font-family:Arial">Net loss
      for the period attributable to common shareholders</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2 solid #000000" valign="bottom" height="18">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2 solid #000000" valign="bottom" width="80.4" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">(2,774)</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2 solid #000000" valign="bottom" height="18">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2 solid #000000" valign="bottom" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,226)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="34">&nbsp;</td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" width="80.4" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Basic and diluted loss per share</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="80.4" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.04)</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.06)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="34">&nbsp;</td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" width="80.4" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" height="34">&nbsp;</td>
    <td valign="bottom" height="34">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Basic and diluted weighted
      average shares outstanding</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">67,664,650</p>
    </td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="bottom" height="18" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">66,878,766</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="405.8" height="18">&nbsp;</td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" width="80.4" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" height="18">&nbsp;</td>
    <td valign="bottom" height="18">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt; font-family:Arial" align="center">&nbsp;</p>
<p style="margin:0pt" align="center"><br>
</p>
<p style="margin:0pt; padding-right:-27pt; font-family:Arial" align="right">See
accompanying notes to consolidated financial statements</p>
<p style="margin:0pt" align="center"><br>
</p>
<p style="margin:0pt" align="center"><br>
</p>
<p style="margin:0pt" align="center"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">7</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; page-break-before:always" align="center"><br>
</p>
<a NAME="OLE_LINK1"></a>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="center"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial" align="center">Consolidated Statements
of Cash Flows</p>
<p style="margin:0pt; font-family:Arial" align="center">(Unaudited - in
thousands of U.S. dollars)</p>
<p style="margin:0pt"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="317.1"></td>
    <td width="0.5"></td>
    <td width="11.8"></td>
    <td width="11.8"></td>
    <td width="60.2"></td>
    <td width="18"></td>
    <td width="63"></td>
  </tr>
  <tr>
    <td valign="top" width="423.467" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td width="188.267" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>Three months
      ended</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="423.467" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td width="188.267" colspan="3">
      <p style="margin:0pt; font-family:Arial" align="center"><b>March 31,</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="423.467" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="80.267">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2006</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="108" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center"><b>2005</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="423.467" colspan="2">
      <p style="margin:0pt; font-family:Arial"><b>Operating activities</b></p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="80.267">&nbsp;</td>
    <td valign="top" width="24">&nbsp;</td>
    <td valign="top" width="84">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Net loss for the period</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(2,761)</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,223)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial">Reclamation expenditures</p>
    </td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="margin:0pt; font-family:Arial" align="right">(282)</p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="margin:0pt; font-family:Arial" align="right">(275)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Items not involving cash</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial">&nbsp;Depreciation and
      amortization</p>
    </td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">3,471</p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">3,218</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">&nbsp;Deferred income taxes</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(609)</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(50)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial">&nbsp;Non-controlling interest</p>
    </td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">1,224</p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">81</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">&nbsp;Unrealized loss on
      commodity contracts</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">6,783</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">1,912</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial">&nbsp;Stock-based compensation</p>
    </td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">471</p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">297</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Arial">&nbsp;Asset
      retirement and reclamation</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">614</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">527</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">
      <p style="margin:0pt; padding-left:9pt; text-indent:-9pt; font-family:Arial">&nbsp;Changes
      in non-cash operating working capital items (note 9)</p>
    </td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,394)</p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">1,371</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" width="422.8">
      <p style="margin:0pt; font-family:Arial">Cash generated by operations</p>
    </td>
    <td style="background-color: #BBE3E1; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" width="16.4" colspan="2">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">7,517</p>
    </td>
    <td style="background-color: #BBE3E1; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-top: 0.5pt solid #000000; border-bottom: 0.5pt solid #000000" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">2,858</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">&nbsp;</td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial"><b>Investing activities</b></p>
    </td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Mineral property,
      plant and equipment expenditures</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(16,261)</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(10,003)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Maturity/(purchase)
      of short-term investments</p>
    </td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">19,920</p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,668)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Proceeds from sale of
      assets</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">500</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Other</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">(50)</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="422.8">
      <p style="margin:0pt; font-family:Arial">Cash generated by (used in)
      investing activities</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="16.4" colspan="2">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">3,659</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">(14,221)</p>
    </td>
  </tr>
  <tr>
    <td width="422.8">&nbsp;</td>
    <td width="16.4" colspan="2">&nbsp;</td>
    <td width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial"><b>Financing activities</b></p>
    </td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Shares issued for
      cash</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">2,084</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">919</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial">&nbsp;&nbsp;Interest paid on
      convertible debentures</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(19)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="422.8">
      <p style="margin:0pt; font-family:Arial">Cash provided by financing
      activities</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="16.4" colspan="2">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">2,065</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">919</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8">&nbsp;</td>
    <td valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; padding-left:9.35pt; text-indent:-9.35pt; font-family:Arial">Increase/(Decrease)
      in cash and cash equivalents during the period</p>
    </td>
    <td valign="top" width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td valign="top" width="15.733" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="80.267" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">13,241</p>
    </td>
    <td valign="top" width="24" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84" style="background-color: #BBE3E1">
      <p style="font-family: Arial; margin: 0pt" align="right">(10,444)</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="422.8">
      <p style="margin:0pt; font-family:Arial">Cash and cash equivalents,
      beginning of period</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.4" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">29,291</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">28,345</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="422.8">
      <p style="margin:0pt; font-family:Arial">Cash and cash equivalents, end of
      period</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="16.4" colspan="2">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="15.733">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">42,532</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">17,901</p>
    </td>
  </tr>
  <tr>
    <td width="422.8">&nbsp;</td>
    <td width="16.4" colspan="2">&nbsp;</td>
    <td width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="422.8">&nbsp;</td>
    <td width="16.4" colspan="2">&nbsp;</td>
    <td width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="422.8">
      <p style="margin:0pt; font-family:Arial"><b>Supplementary Disclosures</b></p>
    </td>
    <td width="16.4" colspan="2">&nbsp;</td>
    <td width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Interest paid</p>
    </td>
    <td width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="15.733">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">19</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">18</p>
    </td>
  </tr>
  <tr>
    <td width="422.8">&nbsp;</td>
    <td width="16.4" colspan="2">&nbsp;</td>
    <td width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="84">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="422.8" style="background-color: #BBE3E1">
      <p style="margin:0pt; font-family:Arial">Taxes paid</p>
    </td>
    <td width="16.4" colspan="2" style="background-color: #BBE3E1">&nbsp;</td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="15.733">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="80.267">
      <p style="font-family: Arial; margin: 0pt" align="right">1,432</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" valign="top" width="24">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 2pt double #000000" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">92</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="643.2" colspan="7">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="643.2" colspan="7">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="643.2" colspan="7">
      <p style="margin:0pt; padding-right:-5.4pt; font-family:Arial" align="right">See
      accompanying notes to consolidated financial statements</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="643.2" colspan="7">&nbsp;</td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt" align="center"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">8</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always" align="center"><b>PAN
AMERICAN SILVER CORP.</b></p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; font-family:Arial" align="center">Consolidated Statements
of Shareholders' Equity<br>
For the three months ended March 31, 2006<br>
(Unaudited - in thousands of US dollars, except for amounts of shares)</p>
<p style="margin:0pt" align="center"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="143.3"></td>
    <td width="27.95"></td>
    <td width="45.05"></td>
    <td width="1.55"></td>
    <td width="9"></td>
    <td width="20.05"></td>
    <td width="14.35"></td>
    <td width="9.05"></td>
    <td width="50.2"></td>
    <td width="11.85"></td>
    <td width="5.95"></td>
    <td width="43"></td>
    <td width="10.1"></td>
    <td width="45.3"></td>
    <td width="10.85"></td>
    <td width="40.45"></td>
    <td width="7.3"></td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="120" colspan="5">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Common
      Shares</p>
    </td>
    <td width="79" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Convertible</p>
    </td>
    <td width="81.067" colspan="3">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Additional</p>
    </td>
    <td width="73.867" colspan="2">&nbsp;</td>
    <td width="78.133" colspan="3">&nbsp;</td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" width="228.333" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="60.067">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Shares</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="59.933" colspan="4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Amount</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="79" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Debentures</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="81.067" colspan="3">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Paid
      in Capital</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="73.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Deficit</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="78.133" colspan="3">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Total</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:-8.8pt; font-family:Arial; font-size:9pt">Balance,
      December 31, 2004</p>
    </td>
    <td width="62.133" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">66,835,378</p>
    </td>
    <td width="12" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td width="45.867" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">380,571</p>
    </td>
    <td width="12.067" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td width="66.933" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">633</p>
    </td>
    <td width="15.8" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td width="65.267" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">10,976</p>
    </td>
    <td width="13.467" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td width="60.4" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(116,664)</p>
    </td>
    <td width="14.467" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td width="63.667" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">275,516</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Issued
      on the exercise of stock options</p>
    </td>
    <td width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">693,933</p>
    </td>
    <td width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">7,751</p>
    </td>
    <td valign="top" width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(1,403)</p>
    </td>
    <td valign="top" width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">6,348</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Issued
      on the exercise of share purchase warrants</p>
    </td>
    <td width="62.133" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">1,320</p>
    </td>
    <td width="12" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">18</p>
    </td>
    <td valign="top" width="12.067" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="15.8" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(5)</p>
    </td>
    <td width="13.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="14.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">13</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Stock-based
      compensation on options granted</p>
    </td>
    <td width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="66.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">1,460</p>
    </td>
    <td valign="top" width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">1,460</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Issued
      to settle obligation</p>
    </td>
    <td width="62.133" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="12" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="12.067" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="66.933" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="15.8" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">2,100</p>
    </td>
    <td valign="top" width="13.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="14.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">2,100</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Accretion
      of convertible debentures</p>
    </td>
    <td valign="top" width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">129</p>
    </td>
    <td valign="top" width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(129)</p>
    </td>
    <td valign="top" width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Other</p>
    </td>
    <td width="62.133" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="12" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="12.067" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="15.8" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(11)</p>
    </td>
    <td valign="top" width="13.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="14.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(11)</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Issued
      as compensation</p>
    </td>
    <td width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">34,272</p>
    </td>
    <td width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">490</p>
    </td>
    <td valign="top" width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="66.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td valign="top" width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">490</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Net
      loss for the year</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="66.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="60.4">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(28,594)</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" valign="top" width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(28,594)</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:-8.8pt; font-family:Arial; font-size:9pt">Balance,
      December 31, 2005</p>
    </td>
    <td width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">67,564,903</p>
    </td>
    <td width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">388,830</p>
    </td>
    <td width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">762</p>
    </td>
    <td width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">13,117</p>
    </td>
    <td width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(145,387)</p>
    </td>
    <td width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">257,322</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Issued
      on the exercise of stock options</p>
    </td>
    <td width="62.133" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">149,308</p>
    </td>
    <td width="12" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">2,739</p>
    </td>
    <td width="12.067" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="15.8" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(667)</p>
    </td>
    <td width="13.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td width="14.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">2,072</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Issued
      on the exercise of share purchase warrants</p>
    </td>
    <td width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">1,062</p>
    </td>
    <td width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">15</p>
    </td>
    <td width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(2)</p>
    </td>
    <td width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">13</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Issued
      on the exchange of debentures</p>
    </td>
    <td width="62.133" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">6,789</p>
    </td>
    <td width="12" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">86</p>
    </td>
    <td width="12.067" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(76)</p>
    </td>
    <td width="15.8" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td width="13.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td width="14.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">10</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Stock-based
      compensation on options granted</p>
    </td>
    <td width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">471</p>
    </td>
    <td width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">471</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Stock-based
      compensation</p>
    </td>
    <td width="62.133" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">14,449</p>
    </td>
    <td width="12" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">272</p>
    </td>
    <td width="12.067" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933" style="background-color: #BBE3E1">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="15.8" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td width="13.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td width="14.467" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2" style="background-color: #BBE3E1">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">272</p>
    </td>
  </tr>
  <tr>
    <td width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Accretion
      of convertible debentures</p>
    </td>
    <td width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="66.933">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">13</p>
    </td>
    <td width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="60.4">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(13)</p>
    </td>
    <td width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td width="63.667" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:0.2pt; font-family:Arial; font-size:9pt">Net
      loss for the period</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="12">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="12.067">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="66.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">-</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="15.8">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">-</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="13.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="60.4">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(2,761)</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="14.467">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="background-color: #BBE3E1; border-bottom: 0.5pt solid #000000" width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">(2,761)</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:2pt double #000000" width="228.333" colspan="2">
      <p style="line-height:11pt; margin:0pt; padding-left:8.8pt; text-indent:-8.8pt; font-family:Arial; font-size:9pt">Balance,
      March 31, 2006</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="62.133" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">67,736,511</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="12">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="45.867" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">391,942</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="12.067">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="66.933">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">699</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="15.8">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="65.267" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">12,919</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="13.467">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="60.4">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">&nbsp;(148,161)</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="14.467">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" width="63.667" colspan="2">
      <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt" align="right">257,399</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="191.067">&nbsp;</td>
    <td valign="top" width="138.133" colspan="5">&nbsp;</td>
    <td valign="top" width="31.2" colspan="2">&nbsp;</td>
    <td valign="top" width="90.667" colspan="3">&nbsp;</td>
    <td valign="top" width="70.8" colspan="2">&nbsp;</td>
    <td valign="top" width="138.533" colspan="4">&nbsp;</td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt; padding-right:-18pt; font-family:Arial" align="right">See
accompanying notes to consolidated financial statements</p>
<p style="margin:0pt" align="right"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">9</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>1.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Nature
of Operations</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">Pan
American Silver Corp, subsidiary companies and joint ventures (collectively, the
"Company" or "Pan American") are engaged in silver mining and related
activities, including exploration, extraction, processing, refining and
reclamation. &nbsp;The Company's primary product (silver) is produced in Peru,
Mexico and Bolivia, along with development activities in Argentina, Mexico and
Bolivia, and exploration activities in South America.</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>2.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Summary
of Significant Accounting Policies</b></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>a)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Basis
of Presentation:</u> The accompanying unaudited consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in Canada for interim financial information and follow the same
accounting policies and methods as our most recent annual financial statements.
Accordingly, they do not include all the information and footnotes required by
accounting principles generally accepted in Canada for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three-month periods ended March 31, 2006 and
2005 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2006.</p>
<p style="margin:0pt"><br>
</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:26.95pt; text-indent:1.4pt; font-family:Arial" align="justify">The
consolidated balance sheet at December 31, 2005 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by accounting principles generally accepted
in Canada for complete financial statements. For further information, refer to
the consolidated financial statements and footnotes thereto included in the Pan
American Silver Corp. (the "Company") Annual Report for the year ended
December 31, 2005.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>b)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Principles
of Consolidation:</u> The consolidated financial statements include the
wholly-owned and partially-owned subsidiaries of the Company and joint ventures,
the most significant of which are presented in the following table:</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt" align="justify"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="156.4"></td>
    <td width="54"></td>
    <td width="63"></td>
    <td width="68.35"></td>
    <td width="135.3"></td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" width="208.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Subsidiary</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="72">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Location</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="84">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Ownership
      interest</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="91.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Status</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="180.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Operations
      and Development Projects</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="208.533">&nbsp;</td>
    <td valign="top" width="72">&nbsp;</td>
    <td valign="top" width="84">&nbsp;</td>
    <td valign="top" width="91.133">&nbsp;</td>
    <td valign="top" width="180.4">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="208.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Pan
      American Silver S.A.C.</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Peru</p>
    </td>
    <td valign="top" width="84">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">100%</p>
    </td>
    <td valign="top" width="91.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Consolidated</p>
    </td>
    <td valign="top" width="180.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Quiruvilca
      and Huaron Mines</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="208.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Compa&#241;&#237;a
      Minera Argentum S.A.</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Peru</p>
    </td>
    <td valign="top" width="84">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">88.2%</p>
    </td>
    <td valign="top" width="91.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Consolidated</p>
    </td>
    <td valign="top" width="180.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Morococha
      Mine</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="208.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Plata
      Panamericana S.A. de C.V.</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Mexico</p>
    </td>
    <td valign="top" width="84">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">100%</p>
    </td>
    <td valign="top" width="91.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Consolidated</p>
    </td>
    <td valign="top" width="180.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">La
      Colorada Mine</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="208.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Minera
      Corner Bay S.A.</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Mexico</p>
    </td>
    <td valign="top" width="84">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">100%</p>
    </td>
    <td valign="top" width="91.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Consolidated</p>
    </td>
    <td valign="top" width="180.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Alamo
      Dorado Project</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="208.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Compa&#241;&#237;a
      Minera PAS Bolivia S.A.</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Bolivia</p>
    </td>
    <td valign="top" width="84">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">55%</p>
    </td>
    <td valign="top" width="91.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Consolidated</p>
    </td>
    <td valign="top" width="180.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">San
      Vicente Project</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="208.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Compa&#241;&#237;a
      Minera Triton S.A.</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Argentina</p>
    </td>
    <td valign="top" width="84">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">50%
      (1)</p>
    </td>
    <td valign="top" width="91.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Joint
      Venture</p>
    </td>
    <td valign="top" width="180.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="justify">Manantial
      Espejo Project</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="208.533">&nbsp;</td>
    <td valign="top" width="72">&nbsp;</td>
    <td valign="top" width="84">&nbsp;</td>
    <td valign="top" width="91.133">&nbsp;</td>
    <td valign="top" width="180.4">&nbsp;</td>
  </tr>
</table>
</center>
<p style="margin:0pt" align="justify">&nbsp;</p>
<p style="line-height:10pt; margin-top:0pt; margin-bottom:4pt; padding-left:36pt; font-family:Arial; font-size:8pt">(1)
The company acquired the remaining 50% interest from the joint venture partner
on April 10, 2006.</p>
<p style="line-height:10pt; margin-top:0pt; margin-bottom:4pt; padding-left:36pt; font-family:Arial; font-size:8pt">&nbsp;</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">Inter-company
balances and transactions have been eliminated upon consolidation. Investments
where the Company has an ownership of 50% and funds its proportionate share of
expenditures are accounted for using the proportionate consolidation method.
&nbsp;Investments where the Company has an ownership of less than 50% and funds
its proportionate share of expenditures are accounted for under the equity
method. The Company has no investments in entities in which its ownership
interest is accounted for using the cost method.</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">10</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>c)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Measurement
Uncertainty:</u> The preparation of financial statements in conformity with
accounting principles generally accepted in Canada requires the Company's
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent 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. &nbsp;Significant accounts that require estimates as the basis for
determining the stated amounts include sales, inventories, mineral property
plant and equipment, investments, unrealized gains and losses on commodity
contracts, provisions for asset retirement obligation and reclamation, and
provisions for future income taxes.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>d)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Revenue
Recognition:</u> Revenue is recognized upon delivery when title and risk of
ownership of metals or metal bearing concentrate passes to the buyer and when
collection is reasonably assured. The passing of title to the customer is based
on the terms of the sales contract. Product pricing is determined at the point
revenue is recognized by reference to active and freely traded commodity
markets.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">Under
our concentrate sales contracts with third-party smelters, final commodity
prices are set on a specified quotational period, typically ranging from one
month prior to shipment, and can extend to three months after the shipment
arrives at the smelter and is based on average market metal prices. Revenues are
recorded under these contracts at the time title passes to the buyer based on
the expected settlement period. The contracts, in general, provide for a
provisional payment based upon provisional assays and quoted metal prices. Final
settlement is based on the average applicable price for a specified future
period, and generally occurs from three to six months after shipment. Final
sales are settled using smelter weights, settlement assays (average of assays
exchanged and/or umpire assay results).</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">Third
party smelting and refining costs are recorded as a reduction of revenue.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>e)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Derivatives
and Trading Activities:</u> The Company employs metals and currency contracts,
including forward contracts, to manage exposure to fluctuations in metal prices
and foreign currency exchange rates. &nbsp;For metals production, these
contracts are intended to reduce the risk of falling prices on the Company's
future sales. &nbsp;Foreign currency derivative financial instruments, such as
forward contracts, are used to manage the effects of exchange rate changes on
foreign currency cost exposures. &nbsp;The Company recognizes mark-to-market
valuations on open derivative positions through the consolidated statements of
operations at the end of each period.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>f)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Cash
and Cash Equivalents:</u> Cash and cash equivalents includes cash, bank
deposits, and all highly-liquid investments with a maturity of three months or
less at the date of purchase. The Company minimizes its credit risk by investing
its cash and cash equivalents with major international banks and financial
institutions located principally in Canada and Peru with a minimum credit rating
of A1 as defined by Standard &amp; Poor's. The Company's management believes
that no concentration of credit risk exists with respect to investment of its
cash and cash equivalents. Due to the short maturity of cash equivalents, their
carrying amounts approximate their fair value.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>g)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Short-term
Investments:</u> Short-term investments principally consist of highly-liquid
debt securities with original maturities in excess of three months and less than
one year. &nbsp;These debt securities include corporate bonds with S &amp; P
rating of A- to AAA with an overall average of single A high. The Company
classifies all short-term investments as available-for-sale securities.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">11</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>h)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Inventories:</u>
Inventories include metal contained in concentrate, dor&#233;, metal contained in
stockpiles, processed silver and operating materials and supplies. The
classification of inventory is determined by the stage at which the ore is in
the production process. Inventories of ore are sampled for metal content and are
valued based on the lower of actual production costs incurred or estimated net
realizable value based upon the period ending prices of contained metal.
Material that does not contain a minimum quantity of metal to cover estimated
processing expense to recover the contained metal is not classified as inventory
and is assigned no value. All metal inventories are stated at the lower of cost
or market, with cost being determined using the first-in, first-out method.
Supplies inventories are valued at the lower of average cost and replacement
cost, net of obsolescence. Concentrate and dor&#233; inventory includes product at
the mine site, the port warehouse and product held by refineries, and are also
valued at lower of cost or market. &nbsp;The Company has a limited amount of
finished silver at a minting operation where coins depicting Pan American Silver
Corp's emblem are stamped.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>i)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Accounts
Receivable:</u> &nbsp;The Company has 10 customers that account for 100% of the
concentrate and dor&#233; sales revenue. &nbsp;The loss of certain of these
customers or curtailment of purchases by such customers could have a material
adverse affect on the Company's results of operations and financial condition.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>j)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Property,
Plant, and Equipment:</u> Expenditures for new facilities, new assets or
expenditures that extend the useful lives of existing facilities are
capitalized. Maintenance, repairs and renewals are charged to operations.
&nbsp;Any gains or losses on disposition of property, plant and equipment are
reflected in the statement of operations. &nbsp;Mineral property costs are
depreciated using the units-of-production method based upon estimated total
proven and probable reserves. Depreciation of plant and equipment is calculated
on a straight-line method at rates sufficient to depreciate such costs over the
shorter of the estimated productive lives of such assets or the useful life of
the individual assets ranging from three to twenty years and the life of the
mineral property to which it relates. &nbsp;</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>k)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Operational
Mining Properties and Mine Development:</u> Mineral exploration costs are
expensed as incurred. When it has been determined that a mineral property can be
economically developed as a result of establishing proven and probable reserves
(which occurs upon completion of a positive economic analysis of the mineral
deposit), the costs incurred to develop such property including costs to further
delineate the ore body and remove overburden to initially expose the ore body
prior to the start of mining operations, are capitalized. Such costs are
amortized using the units-of-production method over the estimated life of the
ore body based on the proven and probable reserves.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">Significant
payments related to the acquisition of the land and mineral rights are
capitalized as incurred. Prior to acquiring such land or mineral rights the
Company makes a preliminary evaluation to determine that the property has
significant potential to develop an economic ore body. The time between initial
acquisition and full evaluation of a property's potential is variable and is
dependent on many factors including: location relative to existing
infrastructure, the property's stage of development, geological controls and
metal prices. If a mineable ore body is discovered, such costs are amortized
when production begins. If no mineable ore body is discovered, such costs are
expensed in the period in which it is determined the property has no future
economic value.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">Interest
expense allocable to the cost of developing mining properties and to construct
new facilities is capitalized until the assets are ready for their intended use.
Gains or losses from sales or retirements of assets are included in other income
or expense. Costs incurred during the start-up phase of a mine are expensed as
incurred. Ongoing mining expenditures on producing properties are charged
against earnings as incurred. Major development expenditures incurred to
increase production or extend the life of the mine are capitalized.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">12</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>l)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Asset
Impairment:</u> Management reviews and evaluates its long-lived assets for
impairment when events or changes in circumstances indicate that the related
carrying amounts may not be recoverable. Impairment is considered to exist if
total estimated future cash flows or probability-weighted cash flows on an
undiscounted basis are less than the carrying amount of the assets, including
mineral property, plant and equipment, non-producing property, and any deferred
costs such as deferred stripping. An impairment loss is measured and recorded
based on discounted estimated future cash flows or the application of an
expected present value technique to estimate fair value in the absence of a
market price. Future cash flows include recoverable proven and probable reserves
and a portion of recoverable resource ounces, gold and silver prices
(considering current and historical prices, price trends and related factors),
production levels, capital and reclamation costs, all based on detailed
engineering life-of-mine plans. Assumptions underlying future cash flow
estimates are subject to risks and uncertainties. Any differences between
significant assumptions and market conditions and/or the Company's performance
could have a material effect on any impairment provision, and on the Company's
financial position and results of operations. In estimating future cash flows,
assets are grouped at the lowest levels for which there are identifiable cash
flows that are largely independent of cash flows from other groups. Generally,
in estimating future cash flows, all assets are grouped at a particular mine for
which there is identifiable cash flow.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>m)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Reclamation
and Remediation Costs:</u> Estimated future reclamation and remediation costs
are based principally on legal and regulatory requirements.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">The
asset retirement obligation is measured using assumptions for cash outflows such
as expected labor costs, allocated overhead and equipment charges, contractor
markup, and inflation adjustments to determine the total obligation.&nbsp; The
sum of all these costs is discounted, using the credit adjusted risk-free
interest rate from the time the Company expects to pay the retirement obligation
to the time the Company incurs the obligation. The measurement objective is to
determine the amount a third party would demand to assume the asset retirement
obligation.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">Upon
initial recognition of a liability for an asset retirement obligation, the
Company capitalizes the asset retirement cost to the related long-lived asset.
The Company amortizes this amount to operating expense using the
units-of-production method. The Company evaluates the cash flow estimates
annually to determine whether the estimates continue to be appropriate.
&nbsp;Upward revisions in the amount of undiscounted cash flows will be
discounted using the current credit-adjusted risk-free rate. Downward revisions
will be discounted using the credit-adjusted risk-free rate that existed when
the original liability was recorded. &nbsp;</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>n)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Foreign
Currency Translation:</u> &nbsp;The Company's functional currency is the US
dollar. Transaction amounts denominated in foreign currencies (currencies other
than U.S. dollars) are translated into U.S. dollars at exchange rates prevailing
at the transaction dates. &nbsp;Carrying values of non-U.S. dollar monetary
assets and liabilities are adjusted at each balance sheet date to reflect the
U.S. exchange rate prevailing at that date. &nbsp;Gains and losses arising from
restatement of foreign currency monetary assets and liabilities at each period
end are included in earnings. &nbsp;</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">The
accounts of subsidiaries, not reporting in U.S. dollars, and which are
integrated operations, are translated into U.S. dollars using the temporal
method. &nbsp;Under this method, substantially all assets and liabilities of
foreign subsidiaries are translated at exchange rates in effect at the date of
the transaction or at the end of each period. Revenues and expenses are
translated at the average exchange rate for the period. Foreign currency
transaction gains and losses are included in the determination of net income or
loss.</p>
<p style="margin-top:0pt; margin-bottom:5pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">13</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin-top:0pt; margin-bottom:5pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>o)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Stock-based
Compensation:</u> &nbsp;The Company provides stock grants or options to buy
common shares of the Company to directors, officers, employees and service
providers. &nbsp;The board of directors grants such options for periods of up to
ten years, with vesting periods of up to four years &nbsp;and at prices equal to
or greater than the weighted average market price of the five trading days prior
to the date the options were granted.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">The
Company applies the fair-value method of accounting in accordance with the
recommendations of CICA Handbook Section ("CICA 3870"), "Stock-based
Compensation and Other Stock-based Payments". &nbsp;Stock-based compensation
expense is calculated using the Black-Scholes option pricing model for stock
grants and market price for stock issued.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>p)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Income
Taxes:</u> The Company computes income taxes in accordance with CICA Handbook
Section ("CICA 3465"), "Income Taxes", which requires an asset and
liability approach. This results in the recognition of future tax assets and
liabilities for the expected future tax consequences of temporary differences
between the carrying amounts and the tax basis of assets and liabilities, as
well as operating loss and tax credit carry-forwards, using enacted or
substantially enacted, as applicable, tax rates in effect in the years in which
the differences are expected to reverse. The Company records a valuation
allowance against a portion of those future income tax assets that management
believes will, more likely than not, fail to be realized. &nbsp;On business
acquisitions, where differences between assigned values and tax bases of assets
acquired (other than non-tax deductible goodwill) and liabilities assumed exist,
the Company recognizes the future tax assets and liabilities for the tax effects
of such differences.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>q)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Earnings
(loss) per share:</u> Basic earnings (loss) per share calculations are based on
the net income (loss) attributable to common shareholders for the period divided
by the weighted average number of common shares issued and outstanding during
the period.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">The
diluted earnings (loss) per share calculations are based on the weighted average
number of common shares outstanding during the period, plus the effects of
dilutive common share equivalents. This method requires that the dilutive effect
of outstanding options and warrants issued should be calculated using the
treasury stock method. &nbsp;This method assumes that all common share
equivalents have been exercised at the beginning of the period (or at the time
of issuance, if later), and that the funds obtained thereby were used to
purchase common shares of the Company at the average trading price of common
shares during the period.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">For
convertible securities that may be settled in cash or shares at the holder's
option the more dilutive of cash settlement and share settlement is used in
computing diluted earnings (loss) per share. For settlements in common shares,
the if-converted method is used, which requires that returns on senior
convertible equity instruments and income charges applicable to convertible
financial liabilities be added back to net earnings (loss), and the net earnings
(loss) is also adjusted for any non-discretionary changes that would arise from
the beginning of the period (or at the time of issuance, if later).</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">Potentially
dilutive securities totaling 4,634,679 for the quarter ended March 31, 2006
(68,130, 503,333 and 4,063,216 shares arising from convertible debentures,
outstanding and exercisable stock options and share purchase warrants,
respectively) and &nbsp;4,742,490 shares for the quarter ended March 31, 2005
(75,712, 1,578,142 and 3,088,636 shares arising from convertible debentures,
outstanding exercisable stock options and share purchase warrants, respectively)
were not included as their effect would be anti-dilutive.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify"><u>r)</u></p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify"><u>Reclassifications:</u>
Certain reclassifications of prior year balances have been made to conform to
current year presentation.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">14</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>1.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Inventories</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">Inventories
consist of the following:</p>
<center>
<table style="font-size:10pt" cellspacing="0" align="center">
  <tr>
    <td width="217.65"></td>
    <td width="12.1"></td>
    <td width="98.65"></td>
    <td width="14.1"></td>
    <td width="95.45"></td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="top" width="290.2">&nbsp;</td>
    <td style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="top" width="147.667" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">&nbsp;&nbsp;&nbsp;&nbsp;March
      31, 2006</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="146.067" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">December 31 2005</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000" valign="top" width="290.2">
      <p style="margin:0pt; font-family:Arial">Concentrate inventory</p>
    </td>
    <td valign="top" width="16.133">
      <p style="line-height:11pt; margin:0pt; padding-left:-4.2pt; padding-right:-4.5pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-right:0.5pt solid #000000" valign="top" width="131.533">
      <p style="line-height:11pt; margin:0pt; text-indent:36.8pt; font-family:Arial; font-size:9pt">7,901</p>
    </td>
    <td valign="top" width="18.8">
      <p style="line-height:11pt; margin:0pt; padding-right:-4.2pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td valign="top" width="127.267">
      <p style="line-height:11pt; margin:0pt; text-indent:27.25pt; font-family:Arial; font-size:9pt">6,421</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000" valign="top" width="290.2">
      <p style="margin:0pt; font-family:Arial">Direct smelting ore and stockpile
      ore</p>
    </td>
    <td valign="top" width="16.133">&nbsp;</td>
    <td style="border-right:0.5pt solid #000000" valign="top" width="131.533">
      <p style="line-height:11pt; margin:0pt; text-indent:36.8pt; font-family:Arial; font-size:9pt">3,149</p>
    </td>
    <td valign="top" width="18.8">&nbsp;</td>
    <td valign="top" width="127.267">
      <p style="line-height:11pt; margin:0pt; text-indent:27.25pt; font-family:Arial; font-size:9pt">3,184</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000" valign="top" width="290.2">
      <p style="margin:0pt; font-family:Arial">Dor&#233; and finished inventory</p>
    </td>
    <td valign="top" width="16.133">&nbsp;</td>
    <td style="border-right:0.5pt solid #000000" valign="top" width="131.533">
      <p style="line-height:11pt; margin:0pt; text-indent:36.8pt; font-family:Arial; font-size:9pt">3,393</p>
    </td>
    <td valign="top" width="18.8">&nbsp;</td>
    <td valign="top" width="127.267">
      <p style="line-height:11pt; margin:0pt; text-indent:27.25pt; font-family:Arial; font-size:9pt">3,101</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="top" width="290.2">
      <p style="margin:0pt; font-family:Arial">Materials and supplies</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.133">&nbsp;</td>
    <td style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="top" width="131.533">
      <p style="line-height:11pt; margin:0pt; text-indent:36.8pt; font-family:Arial; font-size:9pt">6,816</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="18.8">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="127.267">
      <p style="line-height:11pt; margin:0pt; text-indent:27.25pt; font-family:Arial; font-size:9pt">6,197</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000" valign="top" width="290.2">&nbsp;</td>
    <td valign="top" width="16.133">&nbsp;</td>
    <td style="border-right:0.5pt solid #000000" valign="top" width="131.533">
      <p style="line-height:11pt; margin:0pt; text-indent:32.3pt; font-family:Arial; font-size:9pt">21,259</p>
    </td>
    <td valign="top" width="18.8">&nbsp;</td>
    <td valign="top" width="127.267">
      <p style="line-height:11pt; margin:0pt; text-indent:22.75pt; font-family:Arial; font-size:9pt">18,903</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="top" width="290.2">
      <p style="margin:0pt; font-family:Arial">Less: non-current direct smelting
      ore</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.133">&nbsp;</td>
    <td style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="top" width="131.533">
      <p style="line-height:11pt; margin:0pt; text-indent:30.8pt; font-family:Arial; font-size:9pt">(2,118)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="18.8">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="127.267">
      <p style="line-height:11pt; margin:0pt; text-indent:21.25pt; font-family:Arial; font-size:9pt">(2,236)</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="290.2">&nbsp;</td>
    <td style="border-bottom:2pt double #000000" valign="top" width="16.133">
      <p style="line-height:11pt; margin-top:4.5pt; margin-bottom:0pt; padding-left:-4.2pt; padding-right:-4.5pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-right:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="131.533">
      <p style="line-height:11pt; margin-top:4.5pt; margin-bottom:0pt; text-indent:32.3pt; font-family:Arial; font-size:9pt">19,141</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="18.8">
      <p style="line-height:11pt; margin-top:4.5pt; margin-bottom:0pt; padding-right:-4.2pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="127.267">
      <p style="line-height:11pt; margin-top:4.5pt; margin-bottom:0pt; text-indent:22.75pt; font-family:Arial; font-size:9pt">16,667</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>2.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Commodity
and foreign currency contracts</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">Derivatives</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">At
March 31, 2006, the Company had sold forward 10,500 tonnes of zinc at a weighted
average price of $1,759 per tonne ($0.798 per pound). &nbsp;&nbsp;At March 31,
2006 the cash offered prices for zinc was $2,686 per tonne and the
mark-to-market value of the Company's zinc forward contracts at that date was
a negative $9.1 million.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">The
Company has purchased Mexican Pesos ("MXN") 144 million settling between
April 2006 and September 2006 at an average MXN/USD exchange rate of 11.09.
&nbsp;At March 31, 2006, the spot exchange rate for MXN/USD was 10.90 and the
positive mark to market value of the Company's position was $0.2 million.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">At
March 31, 2006 the Company had fixed the price of 1,000,000 ounces of its first
quarter's silver production contained in concentrates, which is due to be
priced in April and May of 2006 under the Company's concentrate contracts.
&nbsp;The price fixed for these ounces averaged $9.98 per ounce while the spot
price of silver was $11.75 per ounce on March 31, 2006, resulting in a mark to
market loss of $1.8 million.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">For
the first quarter of 2006, the Company has recorded a realized loss of
approximately $5.0 million in connection with its commodity and foreign currency
contracts.</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>3.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Mineral
property, plant and equipment</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">Mineral
property, plant and equipment consist of:</p>
<center>
<table style="font-size:10pt" cellspacing="0" align="center">
  <tr>
    <td width="119"></td>
    <td width="7.7"></td>
    <td width="43.4"></td>
    <td width="6.3"></td>
    <td width="48.3"></td>
    <td width="6.3"></td>
    <td width="42"></td>
    <td width="4.2"></td>
    <td width="6.15"></td>
    <td width="41.95"></td>
    <td width="7.35"></td>
    <td width="43.25"></td>
    <td width="6.65"></td>
    <td width="42.7"></td>
  </tr>
  <tr>
    <td width="158.667">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="205.333" colspan="6">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">March
      31, 2006</p>
    </td>
    <td width="5.6">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="197.4" colspan="6">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">December
      31, 2005</p>
    </td>
  </tr>
  <tr>
    <td width="158.667">&nbsp;</td>
    <td width="68.133" colspan="2">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Cost</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="72.8" colspan="2">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Accumulated</p>
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Amortization</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="64.4" colspan="2">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Net
      Book</p>
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Value</p>
    </td>
    <td width="5.6">&nbsp;</td>
    <td width="64.133" colspan="2">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Cost</p>
    </td>
    <td width="67.467" colspan="2">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Accumulated</p>
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Amortization</p>
    </td>
    <td width="65.8" colspan="2">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Net
      Book</p>
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Value</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="158.667">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="top" width="10.267">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="top" width="57.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="64.4">&nbsp;</td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="56">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td style="border-top:1pt solid #000000" valign="top" width="5.6">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="top" width="8.2">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="top" width="55.933">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td style="border-top:1pt solid #000000" valign="top" width="9.8">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="top" width="57.667">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="top" width="8.867">&nbsp;</td>
    <td style="border-top:1pt solid #000000" valign="top" width="56.933">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="158.667">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">&nbsp;&nbsp;Morococha
      mine, Peru</p>
    </td>
    <td valign="top" width="10.267">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">$</p>
    </td>
    <td valign="top" width="57.867">
      <p style="line-height:11pt; margin:0pt; text-indent:11.25pt; font-family:Arial; font-size:9pt">36,928</p>
    </td>
    <td valign="top" width="8.4">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="right">$</p>
    </td>
    <td valign="top" width="64.4">
      <p style="line-height:10pt; margin:0pt; text-indent:14.35pt; font-family:Arial; font-size:8pt">(5,982)</p>
    </td>
    <td valign="top" width="8.4">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="right">$</p>
    </td>
    <td valign="top" width="56">
      <p style="line-height:11pt; margin:0pt; text-indent:10.95pt; font-family:Arial; font-size:9pt">30,946</p>
    </td>
    <td valign="top" width="5.6">&nbsp;</td>
    <td valign="top" width="8.2">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="right">$</p>
    </td>
    <td valign="top" width="55.933">
      <p style="line-height:11pt; margin:0pt; text-indent:11.25pt; font-family:Arial; font-size:9pt">34,137</p>
    </td>
    <td valign="top" width="9.8">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="right">$</p>
    </td>
    <td valign="top" width="57.667">
      <p style="line-height:10pt; margin:0pt; text-indent:14.35pt; font-family:Arial; font-size:8pt">(6,414)</p>
    </td>
    <td valign="top" width="8.867">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="right">$</p>
    </td>
    <td valign="top" width="56.933">
      <p style="line-height:11pt; margin:0pt; text-indent:10.95pt; font-family:Arial; font-size:9pt">27,723</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="158.667">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">&nbsp;&nbsp;La
      Colorada mine, Mexico</p>
    </td>
    <td valign="top" width="10.267">&nbsp;</td>
    <td valign="top" width="57.867">
      <p style="line-height:11pt; margin:0pt; text-indent:11.25pt; font-family:Arial; font-size:9pt">24,489</p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="64.4">
      <p style="line-height:10pt; margin:0pt; text-indent:14.35pt; font-family:Arial; font-size:8pt">(1,571)</p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="56">
      <p style="line-height:11pt; margin:0pt; text-indent:10.95pt; font-family:Arial; font-size:9pt">22,918</p>
    </td>
    <td valign="top" width="5.6">&nbsp;</td>
    <td valign="top" width="8.2">&nbsp;</td>
    <td valign="top" width="55.933">
      <p style="line-height:11pt; margin:0pt; text-indent:11.25pt; font-family:Arial; font-size:9pt">23,529</p>
    </td>
    <td valign="top" width="9.8">&nbsp;</td>
    <td valign="top" width="57.667">
      <p style="line-height:10pt; margin:0pt; text-indent:35pt; font-family:Arial; font-size:8pt">-</p>
    </td>
    <td valign="top" width="8.867">&nbsp;</td>
    <td valign="top" width="56.933">
      <p style="line-height:11pt; margin:0pt; text-indent:10.95pt; font-family:Arial; font-size:9pt">23,529</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="158.667">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">&nbsp;&nbsp;Quiruvilca/Huaron
      mines, Peru</p>
    </td>
    <td valign="top" width="10.267">&nbsp;</td>
    <td valign="top" width="57.867">
      <p style="line-height:11pt; margin:0pt; text-indent:11.25pt; font-family:Arial; font-size:9pt">73,189</p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="64.4">
      <p style="line-height:10pt; margin:0pt; text-indent:10.35pt; font-family:Arial; font-size:8pt">(27,385)</p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="56">
      <p style="line-height:11pt; margin:0pt; text-indent:10.95pt; font-family:Arial; font-size:9pt">45,804</p>
    </td>
    <td valign="top" width="5.6">&nbsp;</td>
    <td valign="top" width="8.2">&nbsp;</td>
    <td valign="top" width="55.933">
      <p style="line-height:11pt; margin:0pt; text-indent:11.25pt; font-family:Arial; font-size:9pt">79,860</p>
    </td>
    <td valign="top" width="9.8">&nbsp;</td>
    <td valign="top" width="57.667">
      <p style="line-height:10pt; margin:0pt; text-indent:10.35pt; font-family:Arial; font-size:8pt">(33,997)</p>
    </td>
    <td valign="top" width="8.867">&nbsp;</td>
    <td valign="top" width="56.933">
      <p style="line-height:11pt; margin:0pt; text-indent:10.95pt; font-family:Arial; font-size:9pt">45,863</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="158.667">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">&nbsp;&nbsp;San
      Vicente mine, Bolivia</p>
    </td>
    <td valign="top" width="10.267">&nbsp;</td>
    <td valign="top" width="57.867">
      <p style="line-height:11pt; margin:0pt; text-indent:22.5pt; font-family:Arial; font-size:9pt">396</p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="64.4">
      <p style="line-height:10pt; margin:0pt; text-indent:24.35pt; font-family:Arial; font-size:8pt">(72)</p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="56">
      <p style="line-height:11pt; margin:0pt; text-indent:22.2pt; font-family:Arial; font-size:9pt">324</p>
    </td>
    <td valign="top" width="5.6">&nbsp;</td>
    <td valign="top" width="8.2">&nbsp;</td>
    <td valign="top" width="55.933">
      <p style="line-height:11pt; margin:0pt; text-indent:22.5pt; font-family:Arial; font-size:9pt">363</p>
    </td>
    <td valign="top" width="9.8">&nbsp;</td>
    <td valign="top" width="57.667">
      <p style="line-height:10pt; margin:0pt; text-indent:24.35pt; font-family:Arial; font-size:8pt">(56)</p>
    </td>
    <td valign="top" width="8.867">&nbsp;</td>
    <td valign="top" width="56.933">
      <p style="line-height:11pt; margin:0pt; text-indent:22.2pt; font-family:Arial; font-size:9pt">307</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="158.667">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">&nbsp;&nbsp;Other</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="10.267">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="57.867">
      <p style="line-height:11pt; margin:0pt; text-indent:15.75pt; font-family:Arial; font-size:9pt">2,034</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="8.4">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="64.4">
      <p style="line-height:10pt; margin:0pt; text-indent:20.35pt; font-family:Arial; font-size:8pt">(870)</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="8.4">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="56">
      <p style="line-height:11pt; margin:0pt; text-indent:15.45pt; font-family:Arial; font-size:9pt">1,164</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="5.6">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="8.2">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="55.933">
      <p style="line-height:11pt; margin:0pt; text-indent:15.75pt; font-family:Arial; font-size:9pt">3,213</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="9.8">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="57.667">
      <p style="line-height:10pt; margin:0pt; text-indent:18.35pt; font-family:Arial; font-size:8pt">(820
      )</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="8.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="56.933">
      <p style="line-height:11pt; margin:0pt; text-indent:15.45pt; font-family:Arial; font-size:9pt">2,393</p>
    </td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000" valign="top" width="158.667">&nbsp;</td>
    <td valign="top" width="10.267">&nbsp;</td>
    <td valign="top" width="57.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="64.4">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="8.4">&nbsp;</td>
    <td valign="top" width="56">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="5.6">&nbsp;</td>
    <td valign="top" width="8.2">&nbsp;</td>
    <td valign="top" width="55.933">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="9.8">&nbsp;</td>
    <td valign="top" width="57.667">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="8.867">&nbsp;</td>
    <td valign="top" width="56.933">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:2pt double #000000" valign="top" width="158.667">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">&nbsp;&nbsp;TOTAL</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="10.267">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="57.867">
      <p style="line-height:11pt; margin:0pt; text-indent:6.75pt; font-family:Arial; font-size:9pt">137,036</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="8.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="64.4">
      <p style="line-height:11pt; margin:0pt; text-indent:6.9pt; font-family:Arial; font-size:9pt">(35,880)</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="8.4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="56">
      <p style="line-height:11pt; margin:0pt; text-indent:6.45pt; font-family:Arial; font-size:9pt">101,156</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="5.6">&nbsp;</td>
    <td style="border-bottom:2pt double #000000" valign="top" width="8.2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="55.933">
      <p style="line-height:11pt; margin:0pt; text-indent:6.75pt; font-family:Arial; font-size:9pt">141,102</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="9.8">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="57.667">
      <p style="line-height:11pt; margin:0pt; text-indent:6.9pt; font-family:Arial; font-size:9pt">(41,287)</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="8.867">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="56.933">
      <p style="line-height:11pt; margin:0pt; text-indent:10.95pt; font-family:Arial; font-size:9pt">99,815</p>
    </td>
  </tr>
</table>
</center>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">15</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>4.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Construction
in progress and investment in non-producing properties</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">The
carrying values of Construction in progress are as follows:</p>
<center>
<table style="font-size:10pt" cellspacing="0" align="center">
  <tr>
    <td width="166.6"></td>
    <td width="16.4"></td>
    <td width="104.2"></td>
    <td width="11.8"></td>
    <td width="16.4"></td>
    <td width="117.75"></td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000" valign="top" width="222.133">&nbsp;</td>
    <td valign="top" width="21.867">&nbsp;</td>
    <td valign="top" width="138.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">March
      31, 2006</p>
    </td>
    <td style="border-right:0.5pt solid #000000" valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="21.867">&nbsp;</td>
    <td valign="top" width="157">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">December
      31, 2005</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000" valign="top" width="222.133">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="21.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="138.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Net
      Book Value</p>
    </td>
    <td style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="top" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="21.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="157">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Net
      Book Value</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000; border-bottom:0.5pt solid #000000" valign="bottom" width="222.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Alamo
      Dorado, Mexico</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="21.867">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="138.933">
      <p style="line-height:11pt; margin:0pt; text-indent:46.5pt; font-family:Arial; font-size:9pt">46,732</p>
    </td>
    <td style="border-right:0.5pt solid #000000; border-bottom:1pt solid #000000" valign="top" width="15.733">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="21.867">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="157">
      <p style="line-height:11pt; margin:0pt; text-indent:38.65pt; font-family:Arial; font-size:9pt">34,306</p>
    </td>
  </tr>
  <tr>
    <td style="border-right:0.5pt solid #000000; border-bottom:2pt double #000000" valign="bottom" width="222.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><b>TOTAL</b></p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="21.867">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt"><b>$</b></p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="138.933">
      <p style="line-height:11pt; margin:0pt; text-indent:46.5pt; font-family:Arial; font-size:9pt">46,732</p>
    </td>
    <td style="border-right:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="15.733">&nbsp;</td>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="21.867">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="157">
      <p style="line-height:11pt; margin:0pt; text-indent:38.65pt; font-family:Arial; font-size:9pt">34,306</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">Acquisition
costs of investment in non-producing properties together with costs directly
related to mine development expenditures are deferred. &nbsp;Exploration
expenditures on investment in non-producing properties are charged to operations
in the period they are incurred.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">The
carrying values of these properties are as follows:</p>
<center>
<table style="font-size:10pt" cellspacing="0" align="center">
  <tr>
    <td width="190.4"></td>
    <td width="16.4"></td>
    <td width="85.85"></td>
    <td width="18.8"></td>
    <td width="18.8"></td>
    <td width="104.2"></td>
  </tr>
  <tr>
    <td valign="top" width="253.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="21.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="114.467">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">March
      31, 2006</p>
    </td>
    <td valign="top" width="25.067">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="25.067">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="138.933">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">December
      31, 2005</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="253.867">
      <p style="line-height:11pt; margin:0pt; padding-left:6.85pt; font-family:Arial; font-size:9pt">Morococha,
      Per&#250;</p>
    </td>
    <td valign="bottom" width="21.867">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td valign="bottom" width="114.467">
      <p style="line-height:11pt; margin:0pt; text-indent:21.1pt; font-family:Arial; font-size:9pt">28,107</p>
    </td>
    <td valign="top" width="25.067">&nbsp;</td>
    <td valign="bottom" width="25.067">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td valign="bottom" width="138.933">
      <p style="line-height:11pt; margin:0pt; text-indent:42.45pt; font-family:Arial; font-size:9pt">31,052</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="253.867">
      <p style="line-height:11pt; margin:0pt; padding-left:6.85pt; font-family:Arial; font-size:9pt">Alamo
      Dorado, M&#233;xico</p>
    </td>
    <td valign="bottom" width="21.867">&nbsp;</td>
    <td valign="bottom" width="114.467">
      <p style="line-height:11pt; margin:0pt; text-indent:21.1pt; font-family:Arial; font-size:9pt">84,543</p>
    </td>
    <td valign="top" width="25.067">&nbsp;</td>
    <td valign="top" width="25.067">&nbsp;</td>
    <td width="138.933">
      <p style="line-height:11pt; margin:0pt; text-indent:42.45pt; font-family:Arial; font-size:9pt">84,543</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="253.867">
      <p style="line-height:11pt; margin:0pt; padding-left:6.85pt; font-family:Arial; font-size:9pt">Manantial
      Espejo, Argentina</p>
    </td>
    <td valign="bottom" width="21.867">&nbsp;</td>
    <td valign="bottom" width="114.467">
      <p style="line-height:11pt; margin:0pt; text-indent:25.6pt; font-family:Arial; font-size:9pt">2,088</p>
    </td>
    <td valign="top" width="25.067">&nbsp;</td>
    <td valign="top" width="25.067">&nbsp;</td>
    <td valign="bottom" width="138.933">
      <p style="line-height:11pt; margin:0pt; text-indent:46.95pt; font-family:Arial; font-size:9pt">1,979</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="253.867">
      <p style="line-height:11pt; margin:0pt; padding-left:6.85pt; font-family:Arial; font-size:9pt">San
      Vicente, Bolivia</p>
    </td>
    <td valign="bottom" width="21.867">&nbsp;</td>
    <td valign="bottom" width="114.467">
      <p style="line-height:11pt; margin:0pt; text-indent:25.6pt; font-family:Arial; font-size:9pt">4,700</p>
    </td>
    <td valign="top" width="25.067">&nbsp;</td>
    <td valign="top" width="25.067">&nbsp;</td>
    <td valign="bottom" width="138.933">
      <p style="line-height:11pt; margin:0pt; text-indent:46.95pt; font-family:Arial; font-size:9pt">4,454</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="253.867">
      <p style="line-height:11pt; margin:0pt; padding-left:6.85pt; font-family:Arial; font-size:9pt">Other</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="21.867">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="114.467">
      <p style="line-height:11pt; margin:0pt; text-indent:25.6pt; font-family:Arial; font-size:9pt">1,687</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="25.067">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="25.067">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" valign="bottom" width="138.933">
      <p style="line-height:11pt; margin:0pt; text-indent:46.95pt; font-family:Arial; font-size:9pt">1,231</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="253.867">&nbsp;</td>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="21.867">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="114.467">
      <p style="line-height:11pt; margin:0pt; text-indent:16.6pt; font-family:Arial; font-size:9pt">122,581</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="25.067">&nbsp;</td>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="25.067">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="138.933">
      <p style="line-height:11pt; margin:0pt; text-indent:37.95pt; font-family:Arial; font-size:9pt">123,259</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>5.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Asset
retirement and obligations</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">Reclamation
and remediation costs are based principally on legal and regulatory
requirements. Management estimates costs associated with reclamation of mining
properties as well as remediation costs for inactive properties. The estimated
undiscounted cash flows generated by our assets and the estimated liabilities
for reclamation and remediation are determined using the Company's assumptions
about future costs, mineral prices, mineral processing recovery rates,
production levels and capital and reclamation costs. Such assumptions are based
on the Company's current mining plan and the best available information for
making such estimates. On an ongoing basis, management evaluates its estimates
and assumptions; however, actual amounts could differ from those based on such
estimates and assumptions.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">The
following is a description of the changes to the Company's asset retirement
obligations from January 1 to March 31, 2006:</p>
<center>
<table style="font-size:10pt" cellspacing="0" align="center">
  <tr>
    <td width="327.1"></td>
    <td width="19.6"></td>
    <td width="72.95"></td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000" valign="top" width="436.133">
      <p style="margin:0pt; font-family:Arial">Balance at December 31, 2005</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="26.133">
      <p style="margin:0pt; font-family:Arial">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="97.267">
      <p style="margin:0pt; font-family:Arial" align="right">39,378</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="436.133">
      <p style="margin:0pt; font-family:Arial">Reclamation expenditures</p>
    </td>
    <td valign="top" width="26.133">&nbsp;</td>
    <td valign="top" width="97.267">
      <p style="margin:0pt; font-family:Arial" align="right">(282)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="436.133">
      <p style="margin:0pt; font-family:Arial">Accretion</p>
    </td>
    <td valign="top" width="26.133">&nbsp;</td>
    <td valign="top" width="97.267">
      <p style="margin:0pt; font-family:Arial" align="right">614</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="436.133">
      <p style="margin:0pt; font-family:Arial">Alamo Dorado Liability increase
      to March 31, 2006</p>
    </td>
    <td valign="top" width="26.133">&nbsp;</td>
    <td valign="top" width="97.267">
      <p style="margin:0pt; font-family:Arial" align="right">673</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="436.133">
      <p style="margin:0pt; font-family:Arial">Changes in estimates</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="26.133">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="97.267">
      <p style="margin:0pt; font-family:Arial" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:2pt double #000000" valign="top" width="436.133">
      <p style="margin:0pt; font-family:Arial">Balance at March 31, 2006</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="26.133">
      <p style="margin:0pt; font-family:Arial">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="97.267">
      <p style="margin:0pt; font-family:Arial" align="right">40,383</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:10pt"><br>
</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">16</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>6.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Share
Capital</b></p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify">a)</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify">Stock
Options and Share Purchase Warrants</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">Transactions
concerning stock options and share purchase warrants are summarized as follows:</p>
<center>
<table style="font-size:10pt" cellspacing="0" align="center">
  <tr>
    <td width="124.4"></td>
    <td width="50.65"></td>
    <td width="12.35"></td>
    <td width="54"></td>
    <td width="9"></td>
    <td width="50.1"></td>
    <td width="12.35"></td>
    <td width="54.55"></td>
    <td width="12.1"></td>
    <td width="50.9"></td>
  </tr>
  <tr>
    <td width="165.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="156" colspan="3">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Incentive</p>
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Stock
      Option Plan</p>
    </td>
    <td width="12">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="156" colspan="3">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Share
      Purchase</p>
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Warrants</p>
    </td>
    <td width="84" colspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Total</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="165.867">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="67.533">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Shares</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.467">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="72">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Price</p>
    </td>
    <td valign="top" width="12">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="66.8">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Shares</p>
    </td>
    <td valign="top" width="16.467">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="72.733">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Price</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.133">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="67.867">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="center">Shares</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="165.867">
      <p style="line-height:10pt; margin-top:4pt; margin-bottom:0pt; font-family:Arial; font-size:8pt">As
      at December 31, 2004</p>
    </td>
    <td valign="bottom" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">1,683,574</p>
    </td>
    <td valign="bottom" width="16.467">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">9.90</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">3,809,817</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="16.467">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt" align="right">$</p>
    </td>
    <td valign="bottom" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">9.98</p>
    </td>
    <td valign="bottom" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">5,493,391</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="165.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="165.867">
      <p style="line-height:10pt; margin:0pt; text-indent:15.8pt; font-family:Arial; font-size:8pt">Granted</p>
    </td>
    <td valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">87,000</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">16.12</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">255,781</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">16.91</p>
    </td>
    <td valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">342,781</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="165.867">
      <p style="line-height:10pt; margin:0pt; text-indent:15.8pt; font-family:Arial; font-size:8pt">Exercised</p>
    </td>
    <td valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">(693,933)</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">9.15</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">(1,320)</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">9.98</p>
    </td>
    <td valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">(695,253)</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="165.867">
      <p style="line-height:10pt; margin:0pt; text-indent:15.8pt; font-family:Arial; font-size:8pt">Cancelled</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">(26,000)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">18.16</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">(26,000)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="165.867">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">As
      at December 31, 2005</p>
    </td>
    <td valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">1,050,641</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">10.88</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">4,064,278</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">10.71</p>
    </td>
    <td valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;5,114,919</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="165.867">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="165.867">
      <p style="line-height:10pt; margin:0pt; text-indent:15.8pt; font-family:Arial; font-size:8pt">Granted</p>
    </td>
    <td valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">182,894</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">19.00</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">182,894</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="165.867">
      <p style="line-height:10pt; margin:0pt; text-indent:15.8pt; font-family:Arial; font-size:8pt">Exercised</p>
    </td>
    <td valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">(149,308)</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">12.99</p>
    </td>
    <td valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">(1,062)</p>
    </td>
    <td valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">10.71</p>
    </td>
    <td valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">(150,370)</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="165.867">
      <p style="line-height:10pt; margin:0pt; text-indent:15.8pt; font-family:Arial; font-size:8pt">Cancelled</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="165.867">
      <p style="margin-top:4pt; margin-bottom:0pt"><br>
      </p>
    </td>
    <td valign="bottom" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
    <td valign="bottom" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:2pt double #000000" valign="bottom" width="165.867">
      <p style="line-height:10pt; margin:0pt; font-family:Arial; font-size:8pt">As
      at March 31, 2006</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="67.533">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">1,084,227</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="72">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">12.47</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="12">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="66.8">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">4,063,216</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="16.467">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="72.733">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">10.71</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="16.133">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:2pt double #000000" valign="top" width="67.867">
      <p style="line-height: 10pt; font-family: Arial; font-size: 8pt; margin: 0pt" align="right">&nbsp;5,147,443</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">In
the period, 1,062 common shares were issued for proceeds of $13,000 in
connection with the exercise of outstanding warrants.</p>
<p style="margin-top:0pt; margin-bottom:-12pt; padding-left:56.7pt; text-indent:-28.35pt; font-family:Arial" align="justify">b)</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:56.7pt; font-family:Arial" align="justify">Share
Option Plan</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">The
Company has a comprehensive stock option plan for its employees, directors and
officers. &nbsp;The plan provides for the issuance of incentive stock options to
acquire up to a total of 10% of the issued and outstanding common shares of the
Company on a non-diluted basis. &nbsp;The exercise price of each option shall be
the weighted average trading price of the Company's stock on the five days
prior to the award date. &nbsp;The options can be granted for a maximum term of
10 years with vesting provisions determined by the Board of Directors.</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">The
following table summarizes information concerning stock options outstanding as
at March 31, 2006:</p>
<div align="center">
  <center>
  <table style="font-size:10pt" cellspacing="0">
    <tr>
      <td width="90"></td>
      <td width="45"></td>
      <td width="81"></td>
      <td width="99"></td>
      <td width="81"></td>
      <td width="72"></td>
    </tr>
    <tr>
      <td valign="top" width="120">&nbsp;</td>
      <td style="border-bottom:0.5pt solid #000000" valign="top" width="60">&nbsp;</td>
      <td style="border-bottom:0.5pt solid #000000" width="240" colspan="2">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Options
        Outstanding</p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" width="204" colspan="2">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Options
        Exercisable</p>
      </td>
    </tr>
    <tr>
      <td style="border-bottom:0.5pt solid #000000" width="120">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Range
        of Exercise Prices</p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" width="60">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Weighted
        average exercise price</p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" width="108">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Number
        Outstanding as at March 31, 2006</p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" width="132">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Weighted
        Average Remaining Contractual Life (months)</p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" width="108">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Weighted
        average exercise price</p>
      </td>
      <td style="border-bottom:0.5pt solid #000000" width="96">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Number
        &nbsp;outstanding and exercisable as at March 31, 2006</p>
      </td>
    </tr>
    <tr>
      <td valign="bottom" width="120">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$4.29</p>
      </td>
      <td valign="bottom" width="60">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$4.29</p>
      </td>
      <td valign="bottom" width="108">
        <p style="line-height:11pt; margin:0pt; padding-right:12.6pt; font-family:Arial; font-size:9pt" align="right">175,000</p>
      </td>
      <td valign="bottom" width="132">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">55.53</p>
      </td>
      <td valign="bottom" width="108">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">$4.29</p>
      </td>
      <td valign="bottom" width="96">
        <p style="line-height:11pt; margin:0pt; padding-right:12.6pt; font-family:Arial; font-size:9pt" align="right">175,000</p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="120">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$7.64
        - $10.30</p>
      </td>
      <td valign="top" width="60">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$8.34</p>
      </td>
      <td valign="top" width="108">
        <p style="line-height:11pt; margin:0pt; padding-right:12.6pt; font-family:Arial; font-size:9pt" align="right">382,333</p>
      </td>
      <td valign="top" width="132">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">21.90</p>
      </td>
      <td valign="top" width="108">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">$8.55</p>
      </td>
      <td valign="top" width="96">
        <p style="line-height:11pt; margin:0pt; padding-right:12.6pt; font-family:Arial; font-size:9pt" align="right">202,333</p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="120">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$12.39
        - &nbsp;$18.06</p>
      </td>
      <td valign="top" width="60">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$15.93</p>
      </td>
      <td valign="top" width="108">
        <p style="line-height:11pt; margin:0pt; padding-right:12.6pt; font-family:Arial; font-size:9pt" align="right">306,000</p>
      </td>
      <td valign="top" width="132">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">39.84</p>
      </td>
      <td valign="top" width="108">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">$16.54</p>
      </td>
      <td valign="top" width="96">
        <p style="line-height:11pt; margin:0pt; padding-right:12.6pt; font-family:Arial; font-size:9pt" align="right">125,000</p>
      </td>
    </tr>
    <tr>
      <td valign="top" width="120">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$18.92
        - $22.04</p>
      </td>
      <td valign="top" width="60">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$19.24</p>
      </td>
      <td valign="top" width="108">
        <p style="line-height:11pt; margin:0pt; padding-right:12.6pt; font-family:Arial; font-size:9pt" align="right">220,894</p>
      </td>
      <td valign="top" width="132">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">53.47</p>
      </td>
      <td valign="top" width="108">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">$22.04</p>
      </td>
      <td valign="top" width="96">
        <p style="line-height:11pt; margin:0pt; padding-right:12.6pt; font-family:Arial; font-size:9pt" align="right">3,000</p>
      </td>
    </tr>
    <tr>
      <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="bottom" width="120">&nbsp;</td>
      <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="bottom" width="60">
        <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">$12.05</p>
      </td>
      <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="bottom" width="108">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">1,084,227</p>
      </td>
      <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="bottom" width="132">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">38.82</p>
      </td>
      <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="bottom" width="108">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">$9.13</p>
      </td>
      <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="bottom" width="96">
        <p style="line-height: 11pt; font-family: Arial; font-size: 9pt; margin: 0pt; padding-right: 12.6pt" align="right">505,333</p>
      </td>
    </tr>
  </table>
  </center>
</div>
<p style="margin:0pt"><br>
</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.05pt; font-family:Arial" align="justify">During
the three months ended March 31, 2006, the Company recognized $0.5 million of
stock-based compensation expense related to stock option grants.</p>
<p style="margin:10pt"><br>
<br>
</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">17</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin:10pt"><br>
</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>1.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Changes
in Non-Cash Working Capital Items</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">The
following table summarizes the changes in non-cash working capital items:</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="20.9"></td>
    <td width="232.3"></td>
    <td width="16.4"></td>
    <td width="65.2"></td>
    <td width="16.4"></td>
    <td width="61.2"></td>
  </tr>
  <tr>
    <td valign="top" width="337.6" colspan="2">&nbsp;</td>
    <td valign="top" width="212.267" colspan="4">
      <p style="margin:0pt; font-family:Arial" align="center">March 31,</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="337.6" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="108.8" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">2006</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="103.467" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">2005</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="27.867">&nbsp;</td>
    <td valign="top" width="309.733">
      <p style="margin:0pt; font-family:Arial">Accounts receivable</p>
    </td>
    <td valign="top" width="21.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,706)</p>
    </td>
    <td valign="top" width="21.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">1,556</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="27.867">&nbsp;</td>
    <td valign="top" width="309.733">
      <p style="margin:0pt; font-family:Arial">Inventories</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">(2,013)</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">2,395</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="27.867">&nbsp;</td>
    <td valign="top" width="309.733">
      <p style="margin:0pt; font-family:Arial">Prepaid expenses</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">(316)</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">117</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="27.867">&nbsp;</td>
    <td valign="top" width="309.733">
      <p style="margin:0pt; font-family:Arial">Accounts Payable and accrued
      liabilities</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">3,016</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,962)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="27.867">&nbsp;</td>
    <td valign="top" width="309.733">
      <p style="margin:0pt; font-family:Arial">Advances for metal shipments</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">(652)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="27.867">&nbsp;</td>
    <td valign="top" width="309.733">
      <p style="margin:0pt; font-family:Arial">Severance, indemnities and
      commitments</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">(375)</p>
    </td>
    <td valign="top" width="21.867">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">(183)</p>
    </td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="27.867">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="309.733">&nbsp;</td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="21.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,394)</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="21.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">1,371</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
</p>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>2.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Supplemental
Cash flow information</b></p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="20.9"></td>
    <td width="232.3"></td>
    <td width="16.4"></td>
    <td width="65.2"></td>
    <td width="16.4"></td>
    <td width="61.2"></td>
  </tr>
  <tr>
    <td valign="top" width="337.6" colspan="2">&nbsp;</td>
    <td valign="top" width="212.267" colspan="4">
      <p style="margin:0pt; font-family:Arial" align="center">March 31,</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="337.6" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="108.8" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">2006</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="103.467" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">2005</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="27.867">&nbsp;</td>
    <td valign="top" width="309.733">
      <p style="margin:0pt; font-family:Arial">Shares issued on conversion of
      debentures</p>
    </td>
    <td valign="top" width="21.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">86</p>
    </td>
    <td valign="top" width="21.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="27.867">&nbsp;</td>
    <td valign="top" width="309.733">
      <p style="margin:0pt; font-family:Arial">Shares issued as compensation</p>
    </td>
    <td valign="top" width="21.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="86.933">
      <p style="font-family: Arial; margin: 0pt" align="right">272</p>
    </td>
    <td valign="top" width="21.867">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="81.6">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
  </tr>
</table>
</center>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>3.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Segmented
information</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">Substantially
all of the Company's operations are within the mining sector, conducted
through operations in six countries. &nbsp;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.
&nbsp;The Corporate office provides support to the mining and exploration
activities with respect to financial, human resources and technical support.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">Segmented
disclosures and enterprise-wide information are as follows:</p>
<center>
<table style="font-size:10pt" cellspacing="0" align="center">
  <tr>
    <td width="126.4"></td>
    <td width="8.65"></td>
    <td width="50.75"></td>
    <td width="8.65"></td>
    <td width="50.75"></td>
    <td width="8.65"></td>
    <td width="71.85"></td>
    <td width="8.65"></td>
    <td width="68"></td>
  </tr>
  <tr>
    <td width="168.533">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="158.4" colspan="4">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Revenue
      March 31</p>
    </td>
    <td width="11.533">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="198" colspan="3">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Net
      capital assets</p>
    </td>
  </tr>
  <tr>
    <td width="168.533">&nbsp;</td>
    <td width="11.533">&nbsp;</td>
    <td width="67.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">2006</p>
    </td>
    <td width="11.533">&nbsp;</td>
    <td width="67.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">2005</p>
    </td>
    <td width="11.533">&nbsp;</td>
    <td width="95.8">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">March
      31,</p>
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">2006</p>
    </td>
    <td width="11.533">&nbsp;</td>
    <td width="90.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">December
      31,</p>
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">2005</p>
    </td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000" width="168.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Peru</p>
    </td>
  </center>
  <td style="border-top:0.5pt solid #000000" valign="top" width="11.533">
    <p style="font-family: Arial; margin: 0pt" align="right">$</p>
  </td>
  <center>
  <td style="border-top:0.5pt solid #000000" valign="top" width="67.667">
    <p style="font-family: Arial; margin: 0pt" align="right">36,556</p>
  </td>
  <td style="border-top:0.5pt solid #000000" valign="top" width="11.533">
    <p style="font-family: Arial; margin: 0pt" align="right">$</p>
  </td>
  <td style="border-top:0.5pt solid #000000" valign="top" width="67.667">
    <p style="font-family: Arial; margin: 0pt" align="right">24,108</p>
  </td>
  <td style="border-top:0.5pt solid #000000" valign="top" width="11.533">
    <p style="font-family: Arial; margin: 0pt" align="right">$</p>
  </td>
  <td style="border-top:0.5pt solid #000000" valign="top" width="95.8">
    <p style="font-family: Arial; margin: 0pt" align="right">105,008</p>
  </td>
  <td style="border-top:0.5pt solid #000000" valign="top" width="11.533">
    <p style="font-family: Arial; margin: 0pt" align="right">$</p>
  </td>
  <td style="border-top:0.5pt solid #000000" valign="top" width="90.667">
    <p style="font-family: Arial; margin: 0pt" align="right">105,281</p>
  </td>
  </tr>
  <tr>
    <td valign="top" width="168.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Canada</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="95.8">
      <p style="font-family: Arial; margin: 0pt" align="right">187</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="90.667">
      <p style="font-family: Arial; margin: 0pt" align="right">190</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Mexico</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">6,387</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">4,978</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="95.8">
      <p style="font-family: Arial; margin: 0pt" align="right">155,270</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="90.667">
      <p style="font-family: Arial; margin: 0pt" align="right">142,258</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">United
      States</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="95.8">
      <p style="font-family: Arial; margin: 0pt" align="right">1,191</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="90.667">
      <p style="font-family: Arial; margin: 0pt" align="right">1,198</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Argentina</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="95.8">
      <p style="font-family: Arial; margin: 0pt" align="right">3,799</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="90.667">
      <p style="font-family: Arial; margin: 0pt" align="right">3,691</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="168.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Bolivia</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">2,801</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="95.8">
      <p style="font-family: Arial; margin: 0pt" align="right">5,014</p>
    </td>
    <td valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="90.667">
      <p style="font-family: Arial; margin: 0pt" align="right">4,762</p>
    </td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="168.533">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Total</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">45,744</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="67.667">
      <p style="font-family: Arial; margin: 0pt" align="right">29,086</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="95.8">
      <p style="font-family: Arial; margin: 0pt" align="right">270,469</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="11.533">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000; border-bottom:2pt double #000000" valign="top" width="90.667">
      <p style="font-family: Arial; margin: 0pt" align="right">257,380</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt"><br>
</p>
<p style="margin:10pt"><br>
</p>
<p style="margin-top:0pt; margin-bottom:5pt; padding-left:28.35pt; font-family:Arial" align="justify">&nbsp;</p>
<p style="margin:0pt" align="right">&nbsp;</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">18</p>
<hr>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt; page-break-before:always"><b>Pan
American Silver Corp.</b></p>
<p style="margin:0pt; font-family:Arial">Notes to Unaudited Interim Consolidated
Financial Statements</p>
<p style="margin:0pt; font-family:Arial">As at March 31, 2006 and 2005 and for
the three month periods then ended</p>
<p style="margin:0pt; font-family:Arial">(Tabular amounts are in thousands of US
dollars, except for numbers of shares, price per share and per share amounts)</p>
<p style="margin:0pt; padding-top:3pt; border-top:0.5pt solid #000000"><br>
</p>
<p style="margin:0pt"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="153"></td>
    <td width="11.8"></td>
    <td width="42.2"></td>
    <td width="11.8"></td>
    <td width="48.35"></td>
    <td width="11.8"></td>
    <td width="72.05"></td>
    <td width="11.8"></td>
    <td width="51.2"></td>
    <td width="11.8"></td>
    <td width="49.5"></td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" width="204">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="429.733" colspan="10">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">For
      the three months ended March 31, 2006</p>
    </td>
  </tr>
  <tr>
    <td width="204" rowspan="2">
      <p style="margin:0pt" align="center"><br>
      </p>
    </td>
    <td width="15.733" rowspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="136.467" colspan="3">
      <p style="line-height:11pt; margin-top:2.25pt; margin-bottom:2.25pt; font-family:Arial; font-size:9pt" align="center">Mining
      &amp; Development</p>
    </td>
    <td width="15.733" rowspan="2">&nbsp;</td>
    <td width="96.067" rowspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Investment
      and exploration</p>
    </td>
    <td width="15.733" rowspan="2">&nbsp;</td>
    <td width="68.267" rowspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Corporate</p>
    </td>
    <td width="15.733" rowspan="2">&nbsp;</td>
    <td width="66" rowspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Total</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" width="56.267">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Mexico</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="15.733">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="64.467">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Peru</p>
    </td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Revenue
      from external customers</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">6,387</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">36,556</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">2,801</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">45,744</p>
    </td>
  </tr>
  <tr>
    <td width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Depreciation
      and amortization</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,444)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,970)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">(25)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(32)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">(3,471)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Reclamation
      accretion</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(84)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">(530)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">(614)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Interest
      and financing expense</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">(66)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(80)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">(146)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Investment
      and other income</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">12</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">(76)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">321</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">257</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Loss
      on commodity and foreign</p>
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;currency
      contracts</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">(11,830)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">(11,830)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Exploration
      expense</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(162)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">(444)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">(628)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,234)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Income
      (loss) before taxes</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(287)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">14,263</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">219</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(12,943)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">1,252</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Net
      income (loss) for the period</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(287)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">10,334</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">219</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(13,027)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">(2,761)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Property,
      plant and equipment &nbsp;&nbsp;</p>
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital
      expenditures</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">960</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">2,432</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">12,848</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">21</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="66">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">16,261</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="204">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Segment
      assets</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="56.267">
      <p style="font-family: Arial; margin: 0pt" align="right">30,021</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="64.467">
      <p style="font-family: Arial; margin: 0pt" align="right">159,149</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96.067">
      <p style="font-family: Arial; margin: 0pt" align="right">157,317</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">25,890</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="66">
      <p style="font-family: Arial; margin: 0pt" align="right">372,377</p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt" align="justify"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="150.5"></td>
    <td width="2.25"></td>
    <td width="9.6"></td>
    <td width="44.35"></td>
    <td width="0.75"></td>
    <td width="11.85"></td>
    <td width="47.9"></td>
    <td width="11.8"></td>
    <td width="72"></td>
    <td width="11.8"></td>
    <td width="51.2"></td>
    <td width="11.8"></td>
    <td width="51.2"></td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="203.667" colspan="2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" width="432.333" colspan="11">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">For
      the three months ended March 31, 2005</p>
    </td>
  </tr>
  <tr>
    <td width="200.667" rowspan="2">&nbsp;</td>
    <td width="15.8" colspan="2" rowspan="2">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" width="139.8" colspan="4">
      <p style="line-height:11pt; margin-top:2.25pt; margin-bottom:2.25pt; font-family:Arial; font-size:9pt" align="center">Mining
      &amp; Development</p>
    </td>
    <td width="15.733" rowspan="2">&nbsp;</td>
    <td width="96" rowspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Investment
      and exploration</p>
    </td>
    <td width="15.733" rowspan="2">&nbsp;</td>
    <td width="68.267" rowspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Corporate</p>
    </td>
    <td width="15.733" rowspan="2">&nbsp;</td>
    <td width="68.267" rowspan="2">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Total</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" width="59.133">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Mexico</p>
    </td>
    <td style="border-bottom:1pt solid #000000" width="16.8" colspan="2">&nbsp;</td>
    <td style="border-bottom:1pt solid #000000" width="63.867">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt" align="center">Peru</p>
    </td>
  </tr>
  <tr>
    <td style="border-top:1pt solid #000000" width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Revenue
      from external customers</p>
    </td>
    <td style="border-top:1pt solid #000000" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right">4,978</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">24,108</p>
    </td>
    <td style="border-top:1pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:1pt solid #000000" valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-top:1pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:1pt solid #000000" valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td style="border-top:1pt solid #000000" valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:1pt solid #000000" valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">29,086</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Depreciation
      and amortization</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,259)</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,953)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(6)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,142)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="200.667">
      <p style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt">Reclamation
      accretion</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right">(45)</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">(482)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(527)</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Interest
      and financing expenses</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">(93)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(93)</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Investment
      and other income</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right">4</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">50</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">(40)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">242</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">256</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Loss
      on commodity and foreign</p>
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;currency
      contracts</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">(3,337)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">(3,337)</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Exploration
      expense</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right">(2)</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">(17)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,405)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">-</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,424)</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Income
      (loss) before taxes</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right">(957)</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">3,754</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,443)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,635)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(3,281)</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Net
      income (loss) for the period</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right">(957)</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">2,812</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,443)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,635)</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,223)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="200.667">
      <p style="line-height:11pt; margin:0pt; padding-left:14.2pt; text-indent:-14.2pt; font-family:Arial; font-size:9pt">Property,
      plant and equipment Capital expenditures</p>
    </td>
    <td valign="top" width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="59.133">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">1,686</p>
    </td>
    <td valign="top" width="16.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">2,345</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="96">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">5,945</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">27</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right"><br>
      </p>
      <p style="font-family: Arial; margin: 0pt" align="right">10,003</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">
      <p style="line-height:11pt; margin:0pt; font-family:Arial; font-size:9pt">Segment
      assets</p>
    </td>
    <td width="15.8" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="60.133" colspan="2">
      <p style="font-family: Arial; margin: 0pt" align="right">55,548</p>
    </td>
    <td valign="top" width="15.8">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="63.867">
      <p style="font-family: Arial; margin: 0pt" align="right">134,660</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="96">
      <p style="font-family: Arial; margin: 0pt" align="right">95,645</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">80,037</p>
    </td>
    <td valign="top" width="15.733">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="top" width="68.267">
      <p style="font-family: Arial; margin: 0pt" align="right">365,890</p>
    </td>
  </tr>
  <tr>
    <td width="200.667">&nbsp;</td>
    <td width="15.8" colspan="2">&nbsp;</td>
    <td valign="top" width="60.133" colspan="2">&nbsp;</td>
    <td valign="top" width="15.8">&nbsp;</td>
    <td valign="top" width="63.867">&nbsp;</td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="96">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="68.267">
      <p style="margin:0pt"><br>
      </p>
    </td>
    <td valign="top" width="15.733">&nbsp;</td>
    <td valign="top" width="68.267">
      <p style="margin:0pt"><br>
      </p>
    </td>
  </tr>
</table>
</center>
<p style="margin-top:10pt; margin-bottom:-12pt; padding-left:28.35pt; text-indent:-28.35pt; font-family:Arial"><b>4.</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; padding-left:28.35pt; font-family:Arial"><b>Subsequent
events</b></p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">On
April 5, 2006, Pan American announced that it had filed a preliminary prospectus
supplement to its existing $150 million base shelf prospectus with the
securities regulatory authorities in the provinces of Canada and with the SEC in
connection with a public offering of common shares (the "Offering").&nbsp;
Pan American expects to use the proceeds of the Offering for the construction
and development of its Manantial Espejo project.&nbsp; The Company completed the
base Offering on April 18, 2006 and completed the over-allotment option of the
Offering on April 21, 2006.&nbsp; The Offering consisted of 6.28 million common
shares priced at $23.88 for gross proceeds of $150 million and net proceeds
after deducting underwriting fees, of $143 million.</p>
<p style="margin-top:0pt; margin-bottom:10pt; font-family:Arial" align="justify">On
April 12<sup>th</sup>, 2006, Pan American announced that it had closed the
acquisition of a 50 percent interest in the Manantial Espejo project from Silver
Standard Resources Inc.&nbsp; The transaction, which gives Pan American a 100
percent interest in Manantial Espejo, was first announced on March 22,
2006.&nbsp; The purchase price was 1.95 million common shares of Pan American
valued at approximately $47.4 million.</p>
<p style="margin-top:0pt; margin-bottom:10pt" align="justify"><br>
</p>
<p style="margin:0pt" align="justify"><br>
<br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="right">19</p>
<hr>
<p style="margin:0pt"><br>
<br>
</p>
<p style="line-height:18pt; margin:0pt; font-family:Arial; font-size:16pt" align="justify"><b>First
Quarter 2006 Management's Discussion and Analysis</b></p>
<p style="margin:0pt; font-family:Arial" align="justify"><b>May 3, 2006</b></p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">The
Management's Discussion and Analysis (MD&amp;A) focuses on significant factors
that affected Pan American Silver Corp.'s and its subsidiaries' ("Pan
American" or the "Company") performance and such factors that may affect
its future performance. &nbsp;The MD&amp;A for the first quarters ending March
31, 2006, and 2005, should be read in conjunction with the unaudited
consolidated financial statements for the three months ended March 31, 2006 and
2005 and the related notes contained therein.&nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" 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, 2005. These
accounting policies have been applied consistently for the three months ended
March 31, 2006</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" 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="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Some
of the statements in this MD&amp;A 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's Annual Information Form and 40F.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b>Results
of Operations</b></p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">For
the three months ended March 31, 2006, the Company's net loss was $2.8 million
(loss per share of $0.04) compared to a net loss of $4.2 million (loss per share
of $0.06) for the corresponding period in 2005. &nbsp;Included in the net loss
for the quarter was a loss on commodity and currency contracts of $11.8 million,
(first quarter 2005, $3.3 million), of which $6.8 million was unrealized at
March 31, 2006. &nbsp;This loss arose primarily as a result of the impact on the
Company's zinc forward sales positions of a significant rise in the price of
zinc during the quarter. &nbsp;Zinc prices rallied approximately 40 per cent
during the first quarter of 2006, with the cash price settling at $2,686 per
tonne on March 31, 2006, compared to the Company's forward sales of 10,500
tonnes at a weighted average price of $1,759 per tonne.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Sales</i></b>
for the first quarter of 2006 were $45.7 million, a 57 per cent increase from
sales in the corresponding period in 2005. &nbsp;Sales in the first quarter
benefited from significantly higher realized metal prices and production from
the San Vicente mine, which more than offset the impact of a 12 per cent
decrease in the quantity of concentrate shipped from the Company's Peruvian
operations versus the year-earlier period. &nbsp;The Company produced 16 per
cent more concentrate tonnes during the first quarter of 2006 than it had in the
first quarter of 2005. However, shipments of concentrate, which is an essential
criterion for revenue recognition, were lower than production, and resulted in
an increase of approximately 4,459 tonnes of concentrate inventory. &nbsp;The
Company expects to ship this additional concentrate inventory and recognize the
related revenues in the second and third quarters of 2006.</p>
<p style="margin:0pt" align="justify"><br>
<br>
</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">20</p>
<hr>
<p style="margin:0pt"><br>
<br>
</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Cost
of sales</i></b> for the three months ended March 31, 2006 was $24.3 million, a
$1.9 million increase from the operating costs recorded in the same period of
2005. &nbsp;Most of the increase was attributable to the cost of sales at San
Vicente, which was not in production during the first quarter of 2005.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Depreciation
and amortization charges</i></b> for the first quarter of 2006 increased to $3.5
million from $3.2 million recorded for the corresponding period in 2005.
&nbsp;This increase is primarily due to production at San Vicente and increased
milling rates at all of the Company's mines.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Mine
operating earnings</i></b> in the first quarter of 2006 were a record $18.0
million, which was more than 4 times the mine operating earnings generated in
the first quarter 2005 of $3.5 million, and more than double the mine operating
earnings generated in the fourth quarter of 2005. &nbsp;The improving trend in
mine operating earnings over the past three years is largely due to the increase
in the prices of the metals that the Company produces together with the growing
production profile. &nbsp;The table below sets out select quarterly results for
the past thirteen quarters, which are stated in thousands of US dollars, except
for the per share amounts. &nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<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="17.65"></td>
    <td width="63"></td>
    <td width="27"></td>
    <td width="54"></td>
    <td width="39.95"></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">Year</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">Sales</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="107.533" 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="108" 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="125.267" colspan="2">
      <p style="margin:0pt; font-family:Arial" align="center">Net income (loss)
      per share</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="62.4">
      <p style="margin:0pt; font-family:Arial" align="right">2006</p>
    </td>
    <td valign="bottom" width="84.6">
      <p style="font-family: Arial; margin: 0pt" align="right">March 31</p>
    </td>
    <td valign="bottom" width="16.2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">45,744</p>
    </td>
    <td valign="bottom" width="23.533">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="bottom" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">17,976</p>
    </td>
    <td valign="bottom" width="36">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(2,761)</p>
    </td>
    <td valign="bottom" width="53.267">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.04)</p>
    </td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="62.4">
      <p style="margin:0pt; font-family:Arial" align="right">2005</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="84.6">
      <p style="font-family: Arial; margin: 0pt" align="right">Dec.31</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="16.2">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">37,871</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="23.533">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">8,683</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="36">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(29,514)</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="53.267">
      <p style="font-family: Arial; margin: 0pt" align="right">$</p>
    </td>
    <td style="border-top:0.5pt solid #000000" valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.44)</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">Sept. 30</p>
    </td>
    <td valign="bottom" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">30,086</p>
    </td>
    <td valign="bottom" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">4,961</p>
    </td>
    <td valign="bottom" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">172</p>
    </td>
    <td valign="bottom" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">0.00</p>
    </td>
  </tr>
  <tr>
    <td valign="bottom" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="bottom" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">June 30</p>
    </td>
    <td valign="bottom" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">25,358</p>
    </td>
    <td valign="bottom" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">4,526</p>
    </td>
    <td valign="bottom" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">4,971</p>
    </td>
    <td valign="bottom" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">0.07</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">March 31</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">29,086</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">3,488</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(4,223)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.06)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="62.4">
      <p style="margin:0pt; font-family:Arial" align="right">2004</p>
    </td>
    <td valign="top" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">Dec. 31</p>
    </td>
    <td valign="top" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">30,022</p>
    </td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">3,402</p>
    </td>
    <td valign="top" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">13,527</p>
    </td>
    <td valign="top" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">0.21</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">Sept. 30</p>
    </td>
    <td valign="top" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">27,916</p>
    </td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">6,357</p>
    </td>
    <td valign="top" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">358</p>
    </td>
    <td valign="top" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">0.01</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">June 30</p>
    </td>
    <td valign="top" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">21,179</p>
    </td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">2,640</p>
    </td>
    <td valign="top" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">3,352</p>
    </td>
    <td valign="top" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.09)(2)</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">March 31</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">15,708</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">2,395</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(2,023)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.08)(2)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="62.4">
      <p style="margin:0pt; font-family:Arial" align="right">2003</p>
    </td>
    <td valign="top" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">Dec.31</p>
    </td>
    <td valign="top" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">12,857</p>
    </td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">81</p>
    </td>
    <td valign="top" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(2,840)</p>
    </td>
    <td valign="top" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.05)(2)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">Sept. 30</p>
    </td>
    <td valign="top" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">11,890</p>
    </td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">1,258</p>
    </td>
    <td valign="top" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,125)</p>
    </td>
    <td valign="top" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.10)(2)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">June 30</p>
    </td>
    <td valign="top" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">12,553</p>
    </td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">758</p>
    </td>
    <td valign="top" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,156)</p>
    </td>
    <td valign="top" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.02)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="62.4">
      <p style="font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="84.6">
      <p style="margin:0pt; font-family:Arial" align="right">March 31</p>
    </td>
    <td valign="top" width="16.2">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="67.2">
      <p style="font-family: Arial; margin: 0pt" align="right">7,822</p>
    </td>
    <td valign="top" width="23.533">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="84">
      <p style="font-family: Arial; margin: 0pt" align="right">(78)</p>
    </td>
    <td valign="top" width="36">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="bottom" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(1,573)</p>
    </td>
    <td valign="top" width="53.267">
      <p style="margin:0pt; font-family:Arial" align="right">$</p>
    </td>
    <td valign="top" width="72">
      <p style="font-family: Arial; margin: 0pt" align="right">(0.03)</p>
    </td>
  </tr>
</table>
</center>
<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) are equal to revenues less operating costs and
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="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>General
and administration costs</i></b> for the three-month period ended March 31,
2006, including stock-based compensation, were $ 1.9 million. These costs, which
were $1.6 million for the comparable quarter in 2005, were negatively impacted
by the continued strength in the Canadian dollar as compared to the US dollar.
&nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Exploration</i></b>
expenses for the first quarter of 2006 were $1.2 million (first quarter 2005,
$1.4 million), and primarily reflected the activity required to complete the
feasibility study at the Company's 100 per cent owned Manantial Espejo
property in Argentina. &nbsp;The Company announced its intention to begin
construction and development of Manantial Espejo on March 23, 2006 and as such,
will capitalize all expenditures related to the project commencing in the second
quarter of 2006.</p>
<p style="margin:0pt" align="justify"><br>
<br>
</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">21</p>
<hr>
<p style="margin:0pt"><br>
<br>
</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Asset
retirement and reclamation</i></b> expense of $0.6 million in the first quarter
of 2006 (first quarter 2005, $0.5 million) related to the accretion of the
Company's mine closure liability. &nbsp;</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Interest
expense</i></b> in the first quarter of 2006 of $0.1 million remained similar to
the interest expenses incurred during the same period in 2005. &nbsp;This
expense primarily consisted of transactional bank fees.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Investment
and other income</i></b> of $0.3 million (first quarter 2005, $0.3 million)
represented interest income received from cash balances the Company maintained
during the quarter. &nbsp;The higher interest rate environment prevailing in the
first quarter of 2006, compared to a year ago was offset by the impact of
reduced cash balances.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify"><b><i>Income
tax provision</i></b> of $4.0 million increased from $0.9 million in the
comparable period of 2005 due to sharply higher taxable income generated by the
Company's Peruvian entities and the fact that these entities utilized their
remaining tax loss carry forwards in 2005. &nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b>Production</b></p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Pan
American produced a record 3,327,527 ounces of silver in the first quarter of
2006, an 11 per cent increase from the corresponding period in 2005.
&nbsp;Silver production increased at all of the Company's operations, other
than the Pyrite Stockpiles, due primarily to increased milling rates. &nbsp;The
most significant increases in silver production were at La Colorada and
Morococha, which achieved 16 per cent and 13 per cent increases respectively.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Consolidated
base metal production also increased over production levels from a year ago,
most notably in zinc production, which was 21 per cent higher. &nbsp;Continuing
improvements in grades and recoveries, combined with higher mill tonnage at
Morococha and small-scale production from San Vicente were the main reasons for
the higher base metal production compared to a year ago.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b>Cash
and Total Costs per Ounce for Silver</b></p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Consolidated
cash costs for the three-month period ended March 31, 2006 were $2.47 per ounce
compared to $4.50 per ounce for the corresponding period of 2005. &nbsp;This 45
per cent decrease in cash costs per ounce is primarily a result of the increase
in by-product credits generated from increased base metal production at higher
metal prices. &nbsp;At Morococha, the by-product credits were greater than the
operating costs, resulting in cash costs per ounce of negative $1.85, which was
$5.57 lower than cash costs per ounce recorded in the comparable period of 2005.
&nbsp;Cash costs per ounce at Quiruvilca reduced by 78 per cent to $0.92, while
at Huaron the cash costs per ounce reduced by 22 per cent to $3.69. &nbsp;At La
Colorada, which realizes only minor by-product credits, cash costs per ounce of
$5.76 were similar to those recorded a year ago. &nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" 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's mines and is widely reported in the silver mining industry as
benchmarks for performance measurement, but does 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>
<br>
</p>
<p style="margin:0pt" align="justify"><br>
<br>
</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">22</p>
<hr>
<p style="margin:0pt"><br>
<br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt" align="justify"><br>
</p>
<center>
<table style="font-size:10pt" cellspacing="0">
  <tr>
    <td width="200.25"></td>
    <td width="69.75"></td>
    <td width="22.1"></td>
    <td width="53.8"></td>
    <td width="18.9"></td>
    <td width="59.2"></td>
  </tr>
  <tr>
    <td valign="top" width="360" colspan="2" rowspan="2">
      <p style="margin:0pt; font-family:Arial"><b>Cash and Total Cost per Ounce
      Reconciliation</b></p>
      <p style="margin:0pt; font-family:Arial">(in thousands of US dollars)</p>
    </td>
    <td valign="top" width="205.333" colspan="4">
      <p style="margin:0pt; font-family:Arial" align="center"><b>Three Months
      Ended</b></p>
      <p style="margin:0pt; font-family:Arial" align="center"><b>March 31,</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="101.2" colspan="2">
      <p style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:46.55pt; font-family:Arial" align="justify"><b>2006</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="bottom" width="104.133" colspan="2">
      <p style="margin:0pt; padding-left:-1.95pt; padding-right:-62.85pt; text-indent:36.7pt; font-family:Arial" align="justify"><b>2005</b></p>
    </td>
  </tr>
  <tr>
    <td style="border-top:0.5pt solid #000000" valign="top" width="360" colspan="2">
      <p style="margin:0pt; font-family:Arial"><b>Operating Costs</b></p>
    </td>
  </center>
  <td valign="top" width="29.467">
    <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
  </td>
  <center>
  <td valign="top" width="71.733">
    <p style="font-family: Arial; margin: 0pt" align="right"><b>24,314</b></p>
  </td>
  <td valign="top" width="25.2">
    <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
  </td>
  <td valign="top" width="78.933">
    <p style="font-family: Arial; margin: 0pt" align="right"><b>22,380</b></p>
  </td>
  </tr>
  <tr>
    <td valign="top" width="360" colspan="2">
      <p style="margin:0pt; font-family:Arial">Add/(Subtract)</p>
    </td>
    <td valign="top" width="29.467">&nbsp;</td>
    <td valign="top" width="71.733">&nbsp;</td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">
      <p style="margin:0pt" align="justify"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="360" colspan="2">
      <p style="margin:0pt; font-family:Arial">Smelting, refining, and
      transportation charges</p>
    </td>
    <td valign="top" width="29.467">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
  </center>
  <td valign="top" width="71.733">
    <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">14,085</p>
  </td>
  <center>
  <td valign="top" width="25.2">
    <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
  </td>
  <td valign="top" width="78.933">
    <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">8,673</p>
  </td>
  </tr>
  <tr>
    <td valign="top" width="360" colspan="2">
      <p style="margin:0pt; font-family:Arial">By-product credits</p>
    </td>
    <td valign="top" width="29.467">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(32,327)</p>
    </td>
    <td valign="top" width="25.2">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(17,397)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="360" colspan="2">
      <p style="margin:0pt; font-family:Arial">Mining royalties and worker's
      participation</p>
    </td>
    <td valign="top" width="29.467">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(492)</p>
    </td>
    <td valign="top" width="25.2">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">193</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="360" colspan="2">
      <p style="margin:0pt; font-family:Arial">Change in inventories</p>
    </td>
    <td valign="top" width="29.467">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">1,081</p>
    </td>
    <td valign="top" width="25.2">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(1,620)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="360" colspan="2">
      <p style="margin:0pt; font-family:Arial">Other</p>
    </td>
    <td valign="top" width="29.467">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">819</p>
    </td>
    <td valign="top" width="25.2">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">357</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:1pt solid #000000" valign="top" width="360" colspan="2">
      <p style="margin:0pt; font-family:Arial">Minority interest adjustment</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="29.467">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">3</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="25.2">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">&nbsp;</p>
    </td>
    <td style="border-bottom:1pt solid #000000" valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(342)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">
      <p style="margin:0pt; font-family:Arial"><b>Cash Operating Costs</b></p>
    </td>
    <td valign="top" width="93">
      <p style="margin:0pt; font-family:Arial" align="center"><b>A</b></p>
    </td>
    <td valign="top" width="29.467">
      <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
    </td>
    <td valign="top" width="71.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>7,476</b></p>
    </td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">12,243</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">
      <p style="margin:0pt; font-family:Arial">Add/(Subtract)</p>
    </td>
    <td valign="top" width="93">&nbsp;</td>
    <td valign="top" width="29.467">&nbsp;</td>
    <td valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">3,471</p>
    </td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">3,218</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">
      <p style="margin:0pt; font-family:Arial">Depreciation and amortization</p>
    </td>
    <td valign="top" width="93">&nbsp;</td>
    <td valign="top" width="29.467">&nbsp;</td>
    <td valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">742</p>
    </td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">527</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">
      <p style="margin:0pt; font-family:Arial">Asset retirement and reclamation</p>
    </td>
    <td valign="top" width="93">&nbsp;</td>
    <td valign="top" width="29.467">&nbsp;</td>
    <td valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">366</p>
    </td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">0</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">
      <p style="margin:0pt; font-family:Arial">Other</p>
    </td>
    <td valign="top" width="93">&nbsp;</td>
    <td valign="top" width="29.467">&nbsp;</td>
    <td valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(20)</p>
    </td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(14)</p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="267">
      <p style="margin:0pt; font-family:Arial">Minority interest adjustment</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="93">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="29.467">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="71.733">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(157)</p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="25.2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">(162)</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">
      <p style="margin:0pt; font-family:Arial"><b>Total Costs</b></p>
    </td>
    <td valign="top" width="93">
      <p style="margin:0pt; font-family:Arial" align="center"><b>B</b></p>
    </td>
    <td valign="top" width="29.467">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>&nbsp;</b></p>
    </td>
    <td valign="top" width="71.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>11,878</b></p>
    </td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">15,812</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">&nbsp;</td>
    <td valign="top" width="93">&nbsp;</td>
    <td valign="top" width="29.467">&nbsp;</td>
    <td valign="top" width="71.733">
      <p style="margin:0pt" align="justify"><br>
      </p>
    </td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right"><br>
      </p>
    </td>
  </tr>
  <tr>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="267">
      <p style="margin:0pt; font-family:Arial"><b>Payable Silver Production
      (oz.)</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="93">
      <p style="margin:0pt; font-family:Arial" align="center"><b>C</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="29.467">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="71.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>3,031,459</b></p>
    </td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="25.2">&nbsp;</td>
    <td style="border-bottom:0.5pt solid #000000" valign="top" width="78.933">
      <p style="text-indent: 10.05pt; font-family: Arial; margin: 0pt" align="right">2,718,074</p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">&nbsp;</td>
    <td valign="top" width="93">&nbsp;</td>
    <td valign="top" width="29.467">&nbsp;</td>
    <td valign="top" width="71.733">&nbsp;</td>
    <td valign="top" width="25.2">&nbsp;</td>
    <td valign="top" width="78.933">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" width="267">
      <p style="margin:0pt; font-family:Arial">Cash Cost per Ounce</p>
    </td>
    <td valign="top" width="93">
      <p style="margin:0pt; font-family:Arial" align="center"><b>(A*$1000)/C</b></p>
    </td>
    <td valign="top" width="29.467">
      <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
    </td>
    <td valign="top" width="71.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>2.47</b></p>
    </td>
    <td valign="top" width="25.2">
      <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
    </td>
    <td valign="top" width="78.933">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>4.50</b></p>
    </td>
  </tr>
  <tr>
    <td valign="top" width="267">
      <p style="margin:0pt; font-family:Arial">Total Costs per Ounce</p>
    </td>
    <td valign="top" width="93">
      <p style="margin:0pt; font-family:Arial" align="center"><b>(B*$1000)/C</b></p>
    </td>
    <td valign="top" width="29.467">
      <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
    </td>
    <td valign="top" width="71.733">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>3.92</b></p>
    </td>
    <td valign="top" width="25.2">
      <p style="margin:0pt; font-family:Arial" align="right"><b>$</b></p>
    </td>
    <td valign="top" width="78.933">
      <p style="font-family: Arial; margin: 0pt" align="right"><b>5.82</b></p>
    </td>
  </tr>
</table>
</center>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b>Liquidity
and Capital Resources</b></p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">At
March 31, 2006, cash and cash equivalents plus short-term investments were $48.6
million, a $6.7 million decrease from December 31, 2005. &nbsp;During the
quarter the Company invested $16.3 million in mining equipment and development,
primarily at Alamo Dorado where $12.4 million was spent, at Morococha, where
$1.5 million was invested in mine development and at La Colorada, where $1.0
million was invested in the sulphide plant. &nbsp;These investments were partly
funded by cash flow provided by operating activities of $7.5 million, by cash
and short-term investments of $6.7 million and by financing activities in the
first quarter, which yielded $2.1 million from the exercise of stock options.
&nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Working
capital at March 31, 2006 was $63.1 million, a reduction of $11.7 million from
December 31, 2005. &nbsp;The reduction in working capital resulted from a $6.7
million decrease in cash and short-term investments plus an $8.7 million
increase in current liabilities partially offset by a $2.5 million increase in
inventories and an increase of $1.7 million in accounts receivable. The increase
in current liabilities was primarily a consequence of a $6.1 million increase in
the negative mark to market of the Company's zinc forward sales positions
during the quarter and increases in payables related to construction activities
at Alamo Dorado.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Capital
resources at March 31, 2006 amounted to shareholders' equity of $257.4
million. &nbsp;At March 31, 2006, the Company had 67.74 million common shares
issued and outstanding. &nbsp;Subsequent to the quarter end, the Company
completed a common share public offering of 6.28 million common shares and the
acquisition of the remaining 50 per cent of Manantial Espejo for 1.95 million
common shares. Please refer to the "Subsequent Events" note at the end of
this MD&amp;A for more details.</p>
<p style="margin:0pt" align="justify"><br>
<br>
</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">23</p>
<hr>
<p style="margin:0pt"><br>
<br>
</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Based
on the Company's financial position at March 31, 2006 and the operating cash
flows that are expected over the next twelve months, management believes that
the Company's liquid assets are more than sufficient to fund development of
Alamo Dorado, planned operating and sustaining capital expenditures and to
discharge liabilities as they come due. At the date of this MD&amp;A, the
Company did not have any material contractual obligation, or any off-balance
sheet arrangements, except for $18.5 million of commitments relating to the
construction of the Alamo Dorado mine.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Pan
American mitigates the price risk associated with its zinc production by selling
some of its forecasted zinc production under forward sales contracts. &nbsp;At
March 31, 2006, the Company had sold forward 10,500 tonnes of zinc at a weighted
average price of $1,759 per tonne ($0.798 per pound). The forward sales
commitments for zinc represent approximately 35 per cent of the Company's
forecast payable zinc production until December 2006. &nbsp;At March 31, 2006,
the cash offered price for zinc was $2,686 per tonne and the mark to market
value was an unrealized loss of $9.1 million. &nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">In
anticipation of capital expenditures in Mexican pesos ("MXN") relating to
the construction of Alamo Dorado, the Company has purchased MXN 144 million
settling between April 2006 and September 2006 to match anticipated spending at
an average MXN/US$ exchange rate of 11.09. At March 31, 2006, the spot exchange
rate for MXN/US$ was 10.90 and the mark to market value of the Company's
position was gain of $0.2 million. &nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">At
the end of the first quarter of 2006, the Company had fixed the price of
1,000,000 ounces of silver produced during the first quarter and contained in
concentrates, which are due to be priced in April and May of 2006 under the
Company's concentrate contracts. &nbsp;The price fixed for these ounces
averaged $9.98 per ounce while the spot price of silver was $11.75 on March 31,
2006, resulting in a mark to market loss of $1.8 million.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b>Exploration
and Development Activities</b></p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">The
development of the Company's Alamo Dorado project in Mexico is progressing on
budget and on schedule with production still planned for late 2006. &nbsp;Over
90 per cent of the engineering design work and about 65 per cent of the
construction work was completed by quarter end. &nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Over
the remainder of the year, the Company anticipates spending an additional $30
million on the construction of Alamo Dorado, which will be funded out of the
Company's treasury. &nbsp;The expected total capital costs for the project are
approximately $77 million, including start-up working capital and a contingency
allowance.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">Following
the positive construction decision for the Manantial Espejo project in
Argentina, which was announced in late March 2006, the Company has hired several
key personnel and has started awarding critical contracts. &nbsp;Basic
engineering for the project has been initiated and construction is expected to
take 18-20 months. &nbsp;The recently completed feasibility study for Manantial
Espejo estimates that the project will produce on average 4.3 million ounces of
silver and 62,000 ounces of gold annually over a mine life of 8.5 years, based
on current proven and probable reserves. &nbsp;Capital costs for the project are
expected to be $112.3 million including working capital and normal construction
contingencies, plus $18.1 million in Argentine Value Added Tax which will be
refundable once the mine is in production. &nbsp;At the feasibility study price
assumptions of US$6.75 per ounce for silver and US$475 per ounce for gold, the
mine will generate an undiscounted after tax value of $72.6 million, an internal
rate of return of 12% and has a capital payback of 3.5 years. &nbsp;Average life
of mine cash costs at feasibility study prices and costs are estimated at $0.02
per ounce, net of gold byproduct credits.</p>
<p style="margin:0pt" align="justify"><br>
<br>
</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">24</p>
<hr>
<p style="margin:0pt"><br>
<br>
</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">At
the San Vicente property, production plans have been temporarily delayed.
&nbsp;The Company has been mining on a limited scale and is hoping to continue
on this basis while evaluating expansion plans at San Vicente. &nbsp;However,
the Company is required to negotiate an extension to an agreement with Comibol,
a Bolivian state run mining company, before continuing with mining activities.
&nbsp;The Company still expects to produce approximately 0.3 million ounces from
San Vicente in 2006 at a total cost of under $3.50 per ounce; however, an
extended delay may impede the Company's ability to meet this production
target. &nbsp;</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="justify"><b>Subsequent
Events</b></p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">On
April 5, 2006, Pan American announced that it had filed a preliminary prospectus
supplement to its existing $150 million base shelf prospectus with the
securities regulatory authorities in the provinces of Canada and with the SEC in
connection with a public offering of common shares (the "Offering").
&nbsp;Pan American expects to use the proceeds of the Offering for the
construction and development of its Manantial Espejo project. &nbsp;The Company
completed the base Offering on April 18, 2006 and completed the over-allotment
option of the Offering on April 21, 2006. &nbsp;The Offering consisted of 6.28
million common shares priced at $23.88 for gross proceeds of $150 million and
net proceeds after deducting underwriting fees, of $143 million.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="line-height:12.5pt; margin:0pt; font-family:Arial; font-size:10.5pt" align="justify">On
April 12<sup>th</sup>, 2006, Pan American announced that it had closed the
acquisition of a 50 interest in the Manantial Espejo project from Silver
Standard Resources Inc. &nbsp;The transaction, which gives Pan American a 100
per cent interest in Manantial Espejo, was first announced on March 22, 2006.
&nbsp;The purchase price was 1.95 million common shares of Pan American valued
at approximately $47.4 million.</p>
<p style="margin:0pt" align="justify"><br>
</p>
<p style="margin:0pt" align="justify"><br>
<br>
</p>
<p style="line-height: 13pt; font-family: Arial; font-size: 11pt; margin: 0pt" align="right">25</p>
<hr>
<p style="margin:0pt"><br>
<br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt" align="center"><img src="logo.jpg" alt="[q1results006.jpg]" align="middle" height="81" width="324.067"></p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="center">Suite
1500 - 625 Howe Street<br>
Vancouver, BC<br>
Canada V6C 2T6</p>
<p style="margin:0pt" align="center"><br>
</p>
<p style="line-height:13pt; margin:0pt; font-family:Arial; font-size:11pt" align="center">Tel:
604 684-1175<br>
Fax: 604 684-0147<br>
<br>
www.panamericansilver.com</p>
<p style="margin:0pt" align="center"><br>
<br>
</p>
<p style="margin:0pt"><br>
</p>
<p style="margin:0pt"><br>
</p>
</BODY>
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<SEQUENCE>2
<FILENAME>logo.jpg
<DESCRIPTION>LOGO
<TEXT>
begin 644 logo.jpg
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
