Morococha

Pan American Silver Corp. announced that during the second quarter of 2010, the company's wholly owned subsidiary Compania Minera Argentum S.A., reached an agreement with Minera Chinalco Peru, a subsidiary of the Aluminum Corporation of China which clearly defines each party’s long term surface rights in the area of the Morococha mine. Under the terms of the agreement, Argentum will relocate the core Morococha facilities over a 5 year period and transfer certain mineral concessions and access rights to MCP. In exchange, Argentum will receive a package of surface rights, easements and other rights that are sufficient to relocate the facilities and to continue uninterrupted operations. Lastly, Argentum will receive periodic cash payments from MCP totaling $40 million, of which, to September 30, 2010, the company has received $7.8 million.

Pan American Silver reported that in 2009, the company’s successful exploration programs added 36.8 million contained ounces of proven and probable silver reserves at its operating mines. The new reserves were more than sufficient to replace the 26.6 million contained silver ounces mined during the year. The net result: Pan American increased its proven and probable silver reserves by approximately 5% to 234 million ounces as at December 31, 2009. The largest reserve increase was at the La Colorada mine, where the company added over 16 million ounces of silver from the discovery of an extension of the NC2 vein, the mine’s main source of sulphide ore. Silver reserves at the Morococha mine, increased by 8% to 38 million ounces at year-end. Exploration activities at Huaron yielded an increase of 4% or 6.7 million ounces of silver net of the 4.5 million ounces mined during the year. Huaron continues to have the largest proven and probable silver reserve in the company’s portfolio. Last year’s fourth quarter acquisition of Aquiline Resources Inc. with its Navidad project in Argentina, had an enormous positive impact on the company’s resources.

Pan American announced that development to one level of the Morro Solar high grade zone in the Codiciada area was completed in 2008 and the plans for 2009 include production from that level and development of additional levels in order to increase production from the area in the future.