Strictly: Drilling

[Old Frank P]

** It's Silver's Time to Shine
Interview by Donna Guzik

The demand for silver both as an industrial material and as a precious metal seems to be on the rise which could send the price of this often ignored commodity soaring says Pan American Silver Chairman & CEO Ross Beaty

Summary

Pan American Silver (PASS-Nasdaq),(TSX:PAA)is a mining company based in Vancouver, BC.

Pan American controls silver reserves and resources in Peru, Mexico, Russia, Bolivia, Montana, California and Arizona totaling more than 613 million ounces.

The price of silver has been volatile over the past year plunging to a 26 year low of $4.23 an ounce, but recently reaching a two year high of $5.13.

Pan American's average cost to produce an ounce of silver was $3.84 in Q1.

Silver is tied to two things, demand for industrial use, and for investment as a precious metal.

As an industrial metal, it's heavily impacted by world industrial production.

As a precious metal there is a renewed sentiment towards precious metals by investors.

In the last three years China has dumped silver on to the world market by selling surplus mine production and silver inventories which has help to depress the price of silver.

Pan American Silver is trying to encourage the domestic Chinese market to buy silver, so there is not so much of it floating in the world market.

One way to encourage silver into the domestic market is to advertise the marketing of Chinese jewelry and silverware.

India right now drives the silver market from the standpoint of silverware and jewelry, they are the largest silver consumer, it is used as wealth and as an adornment.

The problems in Kashmir with Pakistan has probably increased the appetite of having silver as a tangible investment, it will always be saleable.

In Pan American Silver's latest quarter earnings, Q1 net losses were $1.5 million compared to $4.4 million for Q4 2001 as a result of cost cutting measures.

PanAmerican prides themselves on being the purest silver producers worldwide.

Beaty is optimistic that silver prices will rise this year as demand for silver as an industrial and a precious metal increases.
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