Canadian miner Pan American Silver believes Argentina this year will lift its ban on open-pit mining that forced the company to suspend operations at its Navidad gold project, CEO Geoff Burns said Wednesday.
The Vancouver-based company, which also owns the Manantial Espejo silver-gold mine and the Calcatreu gold deposit in Argentina, will also benefit from a devaluation of the Argentine peso, Burns said.
Pan American took a $100 million writedown for Navidad in 2012.
"I'm still very optimistic. We're seeing some positive developments in Argentina relative to attracting foreign investment," Burns said on the sidelines of the International Gold Symposium in Lima. "I remain very hopeful that we'll see some positive developments relative to Navidad this year."
Pan American will continue to curb costs at its aging Huaron and Morococha silver-zinc-lead mines in Peru, the highest cost operations in the company's portfolio, he said. The company has cut all-in costs at the mines to $15/oz from $20/oz through mechanization and productivity increases, Burns said.
"At current price levels of $19, I see those operations thriving in the very long term," Burns said. "I'm happy with the work that's been done there and that we're still generating profits at this level."
The company has community backing at its San Vicente silver mine in Bolivia, where state mining company Comibol is a partner, he said. The company has yet to determine what will be the impact of a new mining law passed last week, he said.
"We've had a very successful relationship and I have no reason to believe that's going to change going forward," Burns said.
The company has earmarked $95.5 million in capex spending this year for expansion work at Manantial Espejo and the Dolores and La Colorada mines in Mexico and is considering an expansion at San Vicente.
Pan American expects to produce 25.75-26.75 million oz Ag and 155,000-165,000 oz Au this year with all-in cash costs of $11.70-$12.70/oz. The company also expects to produce 39,500-42,500 mt Zn, 12,700-13,700 mt Pb and 5,200-5,700 mt Cu this year.
