Exhibit 10.1
This is the form of a material change report required under section 85(1) of the
Securities Act and section 151 of the Securities Rules.
BC FORM 53-901F
(PREVIOUSLY FORM 27)
SECURITIES ACT
MATERIAL CHANGE REPORT UNDER
SECTION 85(1) OF THE SECURITIES ACT (BRITISH COLUMBIA)
AND SIMILAR PROVISIONS OF OTHER APPLICABLE LEGISLATION
ITEM 1. REPORTING ISSUER
Pan American Silver Corp. (the "COMPANY")
1500 - 625 Howe Street
Vancouver, BC V6E 2T6
ITEM 2. DATE OF MATERIAL CHANGE
November 8, 2002
ITEM 3. PRESS RELEASE
A press release was issued by the Company on November 8, 2002 at
Vancouver, British Columbia and distributed through the facilities
of Canada NewsWire.
ITEM 4. SUMMARY OF MATERIAL CHANGE
The Company announced that it has entered into two agreements with
Volcan Compania Minera S.A.A. ("VOLCAN") regarding two large
silver-bearing stockpiles located adjacent to Volcan's Cerro de
Pasco operation in central Peru. The first agreement grants the
Company the right to acquire a 60% interest in the stockpiles by
spending US$2 million on the project over a three-year period. The
second agreement grants the Company the right to mine and sell
600,000 tonnes of the richest silver stockpiles to a nearby smelter,
which will use them as flux in its smelting operation. A ten-year
contract has been negotiated with the smelter and stockpiles sales
are expected to average approximately 46,000 tonnes per year
resulting in an annual silver production of approximately 500,000
ounces at an estimated total production cost of less than US$2 per
ounce. The purchase price will be US$4 million, payable in common
shares of the Company valued at current market prices, plus a
one-third production bonus to Volcan after the Company has recovered
its acquisition costs, operating costs, deemed taxes and interest on
the acquisition cost.
ITEM 5. FULL DESCRIPTION OF MATERIAL CHANGE
The Company announced that it has entered into two agreements with
Volcan, a major Peruvian mining company regarding two large
silver-bearing stockpiles located adjacent to Volcan's Cerro de
Pasco operation in central Peru, about 36 km from the Company's
Huaron mine.
The first agreement grants the Company the right to acquire a 60
percent interest in the stockpiles by spending US$2 million on the
project over a three-year period. In the twelve months following
this period, the Company can increase its interest to 100 percent by
paying Volcan US$3 million and granting Volcan a seven percent
royalty on commercial production from the stockpiles. The first
phase of the Company's work will be a detailed definition drilling
program to confirm historic resources estimated by Volcan to be 26
million tonnes of stockpiles grading 227 g/t silver (a contained
silver resource of more than 180 million ounces). The second phase
will comprise detailed metallurgical studies and economic evaluation
designed to determine the economics of commercial extraction.
Historic studies indicate that a silver price in excess of US$6.50
would be required to profitably recover the contained silver. The
Company's work will investigate this in detail and seek to improve
project economics.
The second agreement grants the Company the right to mine and sell
600,000 tonnes of the richest silver stockpiles to a nearby smelter,
which will use them as flux in its smelting operation. A ten-year
contract has been negotiated with the smelter and stockpile sales
are expected to average approximately 46,000 tonnes per year
resulting in annual silver production of approximately 500,000
ounces at an estimated total production cost of less than US$2 per
ounce. The purchase price will be US$4.0 million, payable in the
Company's common shares valued at current prices, plus a one-third
production bonus to Volcan after the Company has recovered its
acquisition costs, operating costs, deemed taxes and interest on the
acquisition cost.
ITEM 6. RELIANCE ON SECTION 85(2) OF THE ACT
This report is not being filed on a confidential basis.
ITEM 7. OMITTED INFORMATION
There are no significant facts required to be disclosed herein which
have been omitted.
ITEM 8. SENIOR OFFICERS
For Further information, please contact:
Name: Gordon Jang
Office: Controller and Corporate Secretary
Telephone: (604) 684-1175
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ITEM 9. STATEMENT OF SENIOR OFFICER
The foregoing accurately discloses the material change referred to
herein.
DATED at Vancouver, British Columbia, this ___ day of November,
2002.
/s/ Gordon Jang
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Signature of a senior officer of the reporting issuer
Gordon Jang, Controller and Corporate Secretary
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