ex99_1.htm

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AND NOTES FOR THE

FIRST QUARTER ENDING MARCH 31, 2010

Pan American Silver Corp.
Consolidated Balance Sheets
(Unaudited, in thousands of U.S. dollars)
	March 31, 2010		December 31, 2009
Assets
Current
Cash	$	119,734	$	100,474
Short-term investments (Note 6)		95,691		92,623
Accounts receivable (Note 5)		51,054		66,059
Income taxes receivable		9,035		12,132
Inventories (Note 7)		89,821		93,446
Unrealized gain on commodity contracts		-		160
Future income taxes		7,750		4,993
Prepaid expenses and other current assets		3,980		2,568
Total Current Assets		377,065		372,455

Mineral property, plant and equipment, net (Note 8)		1,507,042		1,457,724
Other assets (Note 9)		21,504		18,430
Total Assets	$	1,905,611	$	1,848,609

Liabilities
Current
Accounts payable and accrued liabilities (Note 10)	$	70,213	$	96,159
Income taxes payable		3,484		4,021
Unrealized loss on commodity contracts (Note 5)		577		-
Total Current Liabilities		74,274		100,180

Provision for asset retirement obligation and reclamation		63,218		62,775
Future income taxes		329,378		305,820
Other liability (Note 3)		20,788		20,788
Total Liabilities		487,658		489,563

Non-Controlling Interests		6,803		15,256

Shareholders’ Equity (Note 11)
Share capital (authorized: 200,000,000 common shares of no par value)		1,251,127		1,206,647
Contributed surplus		51,873		47,293

Accumulated other comprehensive income		3,477		1,618
Retained earnings		104,673		88,232
Retained earnings and accumulated other comprehensive income		108,150		89,850
Total Shareholders’ Equity		1,411,150		1,343,790
Total Liabilities, Non-Controlling Interests and Shareholders’ Equity	$	1,905,611	$	1,848,609

See accompanying notes to the consolidated financial statements.

APPROVED BY THE BOARD

“signed”	Ross J. Beaty, Director	“signed”	Geoff A. Burns, Director

Pan American Silver Corp.

Consolidated Statements of Operations

(Unaudited in thousands of U.S. Dollars, except for per share amounts)

	Three months ended
	March 31,
	2010			2009
Sales	$	132,375		$	70,406
Cost of sales		75,681			45,117
Depreciation and amortization		19,820			14,815
Mine operating earnings		36,874			10,474

General and administrative		3,172			2,267
Exploration and project development		5,452			641
Accretion of asset retirement obligation		732			693
Operating earnings		27,518			6,873
Interest and financing expenses		(776	)		(426	)
Investment and other income		1,351			1,411
Foreign exchange gains		3,018			834
Net (losses) gains on commodity and foreign currency contracts		(703	)		283
Net (losses) gains on sale of assets		(14	)		16
Income before non-controlling interest and taxes		30,394			8,991
Non-Controlling interests		135			(31	)
Income tax provision		(11,416	)		(2,350	)
Net income for the period	$	19,113		$	6,610


Basic income per share (Note 12)	$	0.18		$	0.08
Diluted income per share	$	0.18		$	0.08
Cash dividends declared and paid per common share	$	0.025		$	-

Weighted average number of common shares outstanding (in thousands)

Basic		106,686			84,140
Diluted		107,228			84,425

Consolidated Statements of Comprehensive Income

(in thousands of U.S. dollars)

	Three months ended
	March 31,
	2010			2009
Comprehensive income
Net income for the period	$	19,113		$	6,610
Unrealized net gains on available for sale securities		1,903			1,249
Reclassification adjustment for net (gains) included in net income		(44	)		(4	)
Comprehensive income for the period	$	20,972		$	7,855

See accompanying notes to the consolidated financial statements.

Pan American Silver Corp.

Consolidated Statements of Cash Flows

(Unaudited in thousands of U.S. dollars)

	Three months ended
	March 31,
	2010			2009
Operating activities
Net income for the period	$	19,113		$	6,610
Reclamation expenditures		(334	)		-
Items not affecting cash:
Depreciation and amortization		19,820			14,815
Accretion of asset retirement obligation		732			693
Net gains (losses) on sale of assets		14			(16	)
Future income taxes		3,544			(2,070	)
Non-Controlling interest		(135	)		31
Unrealized gains on foreign exchange		(2,199	)		(220	)
Unrealized losses (gains) on commodity and foreign currency contracts		737			(1,688	)
Stock-based compensation		763			843
Changes in non-cash operating working capital (Note 13)		1,062			(24,373	)
Cash generated by (used in) operating activities		43,117			(5,375	)

Investing activities
Mineral property, plant and equipment expenditures (net of accruals)		(12,031	)		(18,652	)
Net (purchase of) proceeds from sale of short-term investments		(666	)		(73,630	)
Proceeds from sale of assets		145			38
Other asset expenditures		(3,120	)		(1,655	)
Cash (used in) investing activities		(15,672	)		(93,899	)

Financing activities
Proceeds from issuance of common shares		133			103,864
Share issue costs		-			(5,553	)
Dividends paid		(2,672	)		-
Contributions from non controlling interest		-			388
Net (repayments) proceeds from advances on metal shipments and loans		(5,646	)		3,017
Cash (used in) generated by financing activities		(8,185	)		101,716

Increase in cash during the period		19,260			2,442
Cash, beginning of period		100,474			26,789
Cash, end of period	$	119,734		$	29,231

Supplemental Cash Flow Information
Interest paid	$	-		$	-
Taxes paid	$	5,497		$	8,221
Significant Non-Cash Items
Equity issued to acquire mineral interest (Note 3)	$	47,517		$	-
Stock compensation issued to employees and directors	$	761		$	624

See accompanying notes to the consolidated financial statements.

Pan American Silver Corp.

Consolidated Statements of Shareholders’ Equity

For the three months ended March 31, 2010 and 2009

(Unaudited in thousands of U.S. dollars, except for numbers of shares)

	Common Shares							Accumulated Other
	Shares		Amount		Contributed Surplus			Comprehensive Income (Loss)		Retained Earnings			Total

Balance, December 31, 2009		105,117,120	$	1,206,647	$	47,293		$	1,618	$	88,232		$	1,343,790
Issued on the exercise of stock options		7,308		187		(54	)		-		-			133
Issued as compensation		31,824		761		-			-		-			761
Issued to acquire mineral interests		1,747,738		43,532		3,985								47,517
Stock-based compensation on options granted		-		-		649			-		-			649
Other comprehensive income		-		-		-			1,859		-			1,859
Dividend declared											(2,672	)		(2,672	)
Net income		-		-		-			-		19,113			19,113
Balance, March 31, 2010		106,903,990	$	1,251,127	$	51,873		$	3,477	$	104,673		$	1,411,150

	Common Shares							Accumulated Other
	Shares		Amount		Contributed Surplus			Comprehensive Income (Loss)			Retained Earnings		Total

Balance, December 31, 2008		80,786,107	$	655,517	$	4,122		$	(232	)	$	26,234	$	685,641
Issued on the exercise of stock options		22,000		472		(137	)		-			-		335
Issued on public offering		6,371,000		97,976		-			-			-		97,976
Issued as compensation		44,626		624		-			-			-		624
Stock-based compensation on options granted		-		-		416			-			-		416
Other comprehensive income		-		-		-			1,245			-		1,245
Net income		-		-		-			-			6,610		6,610
Balance, March 31, 2009		87,223,733	$	754,589	$	4,401		$	1,013		$	32,844	$	792,847

See accompanying notes to consolidated financial statements

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

1.	Nature of Operations

Pan American Silver Corp. and its subsidiary companies (collectively, the “Company”, or “Pan American”) are engaged in silver mining and related activities, including exploration, extraction, processing, refining and reclamation. The Company’s primary product (silver) is produced in Peru, Mexico, Argentina and Bolivia. The Company has current project development activities in Peru, Mexico and Argentina, and exploration activities throughout South America and Mexico.

2.	Summary of Significant Accounting Policies

a.	Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles 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 period ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report for the year ended December 31, 2009.

b.	Principles of Consolidation

The consolidated financial statements include the wholly-owned and partially-owned subsidiaries of the Company, the most significant of which are presented in the following table:

Subsidiary	Location	Ownership interest			Status	Operations and Development Projects Owned

Pan American Silver S.A. Mina Quiruvilca	Peru		100	%	Consolidated	Huaron Mine/Quiruvilca Mine
Compañía Minera Argentum S.A.	Peru		92	%	Consolidated	Morococha Mine
Minera Corner Bay S.A.	Mexico		100	%	Consolidated	Alamo Dorado Mine
Plata Panamericana S.A. de C.V.	Mexico		100	%	Consolidated	La Colorada Mine
Compañía Minera Triton S.A.	Argentina		100	%	Consolidated	Manantial Espejo Mine
Pan American Silver (Bolivia) S.A.	Bolivia		95	%	Consolidated	San Vicente Mine
Minera Argenta S.A.	Argentina		100	%	Consolidated	Navidad Project

Inter-company balances and transactions have been eliminated on consolidation.

c.	Significant Accounting Policies

Mineral exploration costs are expensed as incurred. Capitalization of evaluation expenditures commences when there is a high degree of confidence in the project’s viability and hence it is probable that future economic benefits will flow to the Company. Evaluation expenditures, other than that acquired from the purchase of another mining company, are carried forward as an asset provided that such costs are expected to be recouped in full through successful development and exploration of the area of interest or alternatively, by its sale. Evaluation expenditures include delineation drilling, metallurgical evaluations, and geotechnical evaluations amongst others.

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

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

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 also capitalized. Such costs are amortized using the units-of-production method over the estimated life of the ore body based on proven and probable reserves.

Costs associated with commissioning activities on constructed plants are deferred from the date of mechanical completion of the facilities until the date the Company is ready to commence commercial service. Any revenues earned during this period are recorded as a reduction in deferred commissioning costs. These costs are amortized using the units-of-production method over the life of the mine, commencing on the date of commercial service.

Significant payments related to the acquisition of 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 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. In countries where the company has paid Value Added Tax (“VAT”) and where there is uncertainty of its recoverability, the VAT payments have either been deferred with mineral property costs relating to the property or expensed if it relates to mineral exploration. If the company ultimately make recoveries of the VAT, the amount received will be applied to reduce mineral property costs or taken as a credit against current expenses depending on the prior treatment.

d.	Significant Changes in Accounting Policy

The Company continues to evaluate three new Handbook Sections the Canadian Institute of Chartered Accountants’ (“CICA”) issued in December 2008: Section 1582, “Business Combinations”, Section 1601, “Consolidated Financial Statements”, and Section 1602, “Non-controlling Interests”. These new standards are harmonized with International Financial Reporting Standards (IFRS). Section 1582 specifies a number of changes, including: an expanded definition of a business, a requirement to measure all business acquisitions at fair value, a requirement to measure non-controlling interests at fair value, and a requirement to recognize acquisition-related costs as expenses. Section 1601 establishes the standards for preparing consolidated financial statements. Section 1602 specifies that non-controlling interests be treated as a separate component of equity, not as a liability or other item outside of equity. The new standards will become effective on January 1, 2011 but early adoption is permitted. The Company did not adopt these new standards but continues to evaluate the attributes of early adoption of these standards and their potential effects.

Multiple Deliverable Revenue Arrangements: In December, 2009, the EIC issued EIC Abstract 175, “Multiple Deliverable Revenue Arrangements”. This EIC addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and how such a multiple deliverable revenue arrangement consideration should be measured and allocated to the separate units of accounting. This EIC should be applied prospectively and should be applied to revenue arrangements with multiple deliverables entered into or materially modified in the first annual fiscal period beginning on or after January 1, 2011. Early adoption is permitted. The Company did not early adopt this EIC and upon adoption does not expect it to have a material impact on the Company’s financial position or results of operations.

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

3.	Acquisitions of Mineral Interests

Aquiline Resource Inc. (Navidad Project, Chubut, Argentina)

During January 2010, Pan American completed the acquisition of a 100% interest in Aquiline Resources Inc. (“Aquiline”), a Canadian publicly traded company that controls the Navidad Project in Chubut, Argentina, a silver development project, as well as several other early stage development projects in Argentina and Peru. The acquisition was made on the basis of issuing 0.2495 of a Pan American common share, plus 0.1 of a Five Year Pan American Warrant (“Consideration Warrant”) for each Aquiline Share tendered. Each whole Consideration Warrant will entitle the holder to acquire one Pan American common share at a price of $35.00 per Pan American common share for a period of five years after the date on which Pan American first paid for Aquiline Shares tendered, December 7, 2009. The acquisition was completed in three significant steps. On December 7, 2009 the Company completed the acquisition of 84.5% of the outstanding shares of Aquiline and extended the offer to December 22, 2009 at which time the Company had taken up 93% of the outstanding shares of Aquiline. Through a Compulsory Acquisition, on January 22, 2010 the Company acquired the remaining shares of Aquiline achieving 100% ownership. The acquisition of Aquiline was accounted for as an asset acquisition.

The purchase price of the transaction totaled $588.6 million, comprised of approximately 19.6 million Pan American common shares, 7.9 million Consideration Warrants, 0.5 million Replacement Warrants, 0.5 million Replacement Options, 1.7 million common shares and 1.5 million warrants of Aquiline, respectively, held by Pan American prior to the offer and considered disposed of into the transaction, a replacement convertible debenture as discussed below and transaction costs of $8.4 million.

Pan American exchanged and replaced all outstanding options, warrants and the convertible debenture at an exchange ratio of 0.2495 and at strike prices equivalent to the original strike prices divided by 0.2495.

Pan American share values utilized for valuing the consideration of shares issued were closing prices on the actual dates of the Pan American shares being issued, with a range of prices used from $23.54 to $25.40 for the December 2009 acquisition dates and $24.57 to $24.96 during January.

Consideration warrants were valued using observable market pricing with a range of prices from $4.50 to $5.73 assigned to the consideration warrants issued on the issue dates.

Replacement warrants and options were valued using the Black-Scholes option pricing model. Assumptions used were as follows:


Dividend yield		0	%
Expected volatility		52% - 63	%
Risk free interest rate		1.5	%
Expected life	0 – 2 years

Warrants owned by Pan American prior to the offer and considered disposed into the transaction were valued using the Black-Scholes option pricing model. Assumptions used were as follows:


Dividend yield		0	%
Expected volatility		50	%
Risk free interest rate		1.3	%
Expected life	1.9 years

The Company issued a convertible debenture that allowed the holder to convert the debenture into either 363,854 Pan American shares or a Silver Stream contract related to certain production from the Navidad

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

project. The Company concluded that the most appropriate guidance regarding treatment of the replacement convertible debenture at the time of acquisition was provided under Canadian GAAP by making reference to the principles in EIC 70 – “Presentation of a Financial Instrument Labeled as a Share when a Future Event or Circumstance may affect the Issuer’s Obligations”. In consideration of EIC-70 and the economic substance of the contract, it was concluded that a liability presentation was the most appropriate and best representation of the economics underlying the contract as of the date the Company assumed the obligation as part of the Aquiline acquisition. Upon analysis of the relative fair values of the conversion options there was an extremely high probability that the holder of the option would convert to a Silver Stream (the fair value of the Silver Stream option was significantly higher than that of the equity option which was deeply “out-of-the-money”).

The purchase price allocation for 100% of Aquiline was calculated as follows:

Fair value of Pan American shares issued	$	495,643
Fair value of Pan American consideration warrants issued		36,824
Fair value of Pan American replacement warrants issued		8,106
Fair value of Pan American replacement options issued		1,027
Fair value of Aquiline units tendered into the transaction		17,771
Fair value of replacement debenture issued		20,788
Transaction costs		8,423
Purchase Consideration	$	588,582

The purchase price allocation is as follows:
Net working capital acquired (including cash of $4.3 million)		(4,299	)
Mineral property, plant and equipment		870,436
Asset retirement obligation		(1,235	)
Future income tax liability		(276,320	)
	$	588,582

On February 25, 2010, subsequent to the acquisition transaction, the counterparty to the replacement debenture indicated its intention to elect the Silver Stream alternative. The final contract for this alternative is being discussed and is expected to be finalized later in 2010. Pending the final resolution to this alternative, the Company continues to classify the fair value calculated at the acquisition of this alternative as a liability.

The current draft of the Silver Stream alternative allows the counterparty the right to purchase 12.5% of the payable silver produced from the Loma de La Plata zone of the Navidad project for the life of the zone, such right including the right to purchase a minimum of one million ounces of payable silver per year from the zone, or if unavailable, from other production on the Navidad Project, for a minimum of a 12.5 year period. The silver under the Silver Stream contract will be purchased by the counterparty for the sum of: (a) an upfront payment of $50 million (the ‘‘Upfront Payment’’); and (b) the lesser of $4.00 per ounce of payable silver and the prevailing market price per ounce of payable silver on the London Metals Exchange. The Upfront Payment shall be made by the counterparty as follows: (a) Cdn.$17.5 million represented by the purchase price of the convertible debenture, which has already been paid; (b) $14.9 million on the Maturity Date; and (c) $17.5 million to be paid in four equal installments over one year, payable starting three months after commencement of construction. The Maturity Date is defined as the date that is the later of: (a) the completion of a feasibility study on the Loma de La Plata zone; (b) the decision and public announcement by the Company to proceed with the construction of a mine; and (c) the receipt of all necessary permits to proceed with the construction of a mine.

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

Joint Venture with Orko Silver Inc. (La Preciosa Project, Durango, Mexico)

In April, 2009, Pan American and Orko Silver Corp. (‘‘Orko’’) entered into an agreement (the ‘‘Joint Venture Letter Agreement’’), pursuant to which Pan American and Orko agreed to form a joint venture (the ‘‘Joint Venture’’) to develop the La Preciosa silver project located in the State of Durango, Mexico (the ‘‘La Preciosa Project’’). Under the terms of the Joint Venture Letter Agreement, in order to retain its 55% interest in the Joint Venture: (a) the Company must, in addition to contributing its mine development expertise, spend a minimum of $5 million in the first 12 months (condition achieved as at March 31, 2010 as indicated below) from the date of the Joint Venture Letter Agreement and conduct resource definition drilling, acquire necessary surface rights, obtain permits, and prepare a feasibility study over the following 24 month period; and (b) following a positive construction decision, the Company must contribute 100% of the funds necessary for practical completion of an operating mine. In exchange for its 45% interest in the Joint Venture, Orko agreed to contribute its exploration expertise and the La Preciosa Project and related concessions.

The Company has assessed the operating company of the La Preciosa project to be a variable interest entity as contemplated under AcG-15 and as such it is consolidated in the financial statements of the Company. Until such time as an economic analysis is completed and proven and probable reserves are established, costs incurred through the joint venture company will be expensed and no value has been attributed to the property contributed by the joint venture party. For the three months ended March 31, 2010, the exploration expense recognized arising from the Orko joint venture is $2.1 million and exploration spending since the start of the joint venture through to March 31, 2010 is $6.1 million.

4.	Management of Capital

The Company’s objective when managing its capital is to maintain its ability to continue as a going concern while at the same time maximizing growth of its business and provide returns to its shareholders. The Company’s capital structure consists of shareholders’ equity, comprising issued share capital plus contributed surplus plus retained earnings, less accumulated other comprehensive income (loss). Since October 2008, the Company has had a $70 million credit facility with a syndicate of international banks which has not been drawn.

The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged from the year ended December 31, 2009.

5.	Financial Instruments

Overview

The Company has exposure to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The principal financial risks to which the Company is exposed are metal price risk, credit risk, foreign exchange rate risk, and liquidity risk. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.

Metal Price Risk

Metal price risk is the risk that changes in metal prices will affect the Company’s income or the value of its related financial instruments.

The Company derives its revenue from the sale of silver, zinc, lead, copper, and gold. The Company’s sales are directly dependent on metal prices that have shown extreme volatility and are beyond the Company’s control.

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

Consistent with the Company’s mission to provide equity investors with exposure to changes in silver prices, Company policy is not to hedge the price of silver.

The Company mitigates the price risk associated with its base metal production by committing some of its forecasted base metal production from time to time under forward sales and option contracts. The Board of Directors continually assesses the Company’s strategy towards its base metal exposure, depending on market conditions. At March 31, 2010, the Company had 3,150 tonnes of zinc and 1,125 tonnes of lead under contract, respectively, with a negative mark to market valuation of $0.6 million which is presented in current liabilities.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meets its contractual obligations, and arises principally from the Company’s trade receivables. The carrying value of financial assets represents the maximum credit exposure.

The Company has long-term concentrate contracts to sell the zinc, lead and copper concentrates produced by the Quiruvilca, Huaron, Morococha, San Vicente and La Colorada mines. Concentrate contracts are common business practice in the mining industry. At March 31, 2010 the Company had receivable balances associated with buyers of our concentrates of $38.9 million (December 31, 2009 - $54.0 million). The vast majority of our concentrate is sold to three well known concentrate buyers.

Silver doré production from La Colorada, Alamo Dorado and Manantial Espejo is refined under long term agreements with fixed refining terms at five separate refineries worldwide. The Company generally retains the risk and title to the precious metals throughout the process of refining and therefore is exposed to the risk that the refineries will not be able to perform in accordance with the refining contract and that the Company may not be able to fully recover precious metals in such circumstances. At March 31, 2010 the Company had approximately $15.6 million (December 31, 2009 - $15.1 million) of value contained in precious metal inventory at refineries. The Company maintains insurance coverage against the loss of precious metals at our mine sites, in-transit to refineries and whilst at the refineries.

The Company maintains trading facilities with several banks and bullion dealers for the purposes of transacting the Company’s trading activities. None of these facilities are subject to margin arrangements. The Company’s trading activities can expose us to the credit risk of our counterparties to the extent that our trading positions have a positive mark-to-market value. However, the Company minimizes this risk by ensuring there is no excessive concentration of credit risk with any single counterparty, by active credit management, and monitoring.

Refined silver and gold is sold in the spot market to various bullion traders and banks. Credit risk may arise from these activities if we are not paid for metal at the time it is delivered, as required by spot sale contracts.

Management constantly monitors and assesses the credit risk resulting from its refining arrangements, concentrate sales and commodity contracts with its refiners, trading counterparties and customers. Furthermore, management carefully considers credit risk when allocating prospective sales and refining business to counterparties. In making allocation decisions, Management attempts to avoid unacceptable concentration of credit risk to any single counterparty.

As at March 31, 2010, Doe Run Peru (“DRP”), one of the buyers of concentrates from the Company’s Peruvian operations, owed to the Company approximately $8.8 million for deliveries of concentrates that occurred in early 2009. The Company established a doubtful accounts receivable provision of $4.4 million of the amount receivable in Q2 2009 and, in addition, reclassified the remaining receivable balance of $4.4 million from current assets into long term assets on its consolidated balance sheet. This reclassification reflects the Company’s current expectation that the remaining receivable balance of $4.4

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

million owed by DRP may not be recovered within the next twelve months, and in recognition of that expectation, the Company recorded an additional charge of $0.6 million in Q2 2009 related to the negative present value impact of the expected delay in the recovery of the DRP receivable. The Company believes that the circumstances surrounding DRP do not warrant any further changes to the accounting treatment established in Q2 2009 and the Company remains optimistic that the La Oroya smelter will resume operations in 2010. No interest income has been accrued. Other than this receivable with DRP, at March 31, 2010 and December 31, 2009, the Company had no material past due trade receivables. With the DRP receivable presented in long term other assets, the accounts receivable on the Consolidated Balance Sheets is presented with $ NIL provision for doubtful accounts (March 31, 2009 - $ NIL).

The Company invests its cash with the objective of maintaining safety of principal and providing adequate liquidity to meet all current payment obligations.

Foreign Exchange Rate Risk

The Company reports its financial statements in U.S. dollars (“USD”); however, the Company operates in jurisdictions that utilize other currencies. As a consequence, the financial results of the Company’s operations as reported in USD are subject to changes in the value of the USD relative to local currencies. Since the Company’s sales are denominated in USD and a portion of the Company’s operating costs and capital spending are in local currencies, the Company is negatively impacted by strengthening local currencies relative to the USD and positively impacted by the inverse.

In order to mitigate this exposure, from time to time the Company has purchased Peruvian New soles (“PEN”), Mexican pesos (“MXN”) and Canadian dollars (“CAD”) to match anticipated spending. At March 31, 2010, the Company had no forward contracts to purchase foreign currencies. The Company’s net income is also affected by the revaluation of its monetary assets and monetary liabilities at each balance sheet date. The most significant monetary item affected by such movements in foreign currencies is the future income tax liability arising from the Aquiline acquisition with a March 31, 2010 balance of $271.0 million. This liability reflects the difference between the tax values and the accounting book values of the assets purchased. As this balance is deemed to be denominated primarily in Argentine pesos, the Company will be required to adjust this liability for any movements in the exchange rate of that currency against the USD. At March 31, 2010 the Company was also holding $52.6 million in CAD in cash and short term investments.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk by continuously monitoring forecasted and actual cash flows. The Company has in place a rigorous planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its expansion plans. The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations, its holdings of cash and short-term investments, and its committed loan facilities.

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

The Company’s commitments have contractual maturities which are summarized below:

PAYMENTS DUE BY PERIOD
			Less than			1 – 3		4 – 5	After
	Total		1 year		years		years		5 years
Capital Lease Obligations	$	450	$	411	$	39		-		-
Current Liabilities		71,077		71,077		-		-		-
Contribution Plan (1)		7,763		2,587		5,176		-		-
Total contractual obligations(2)	$	79,290	$	74,075	$	5,215		-		-

(1)	In June 2008 the Company initiated a 4 year contractual retention plan for key officers and management, further discussed in Note 11. Contract commitments for the plan, payable in CAD, represent minimum payments expected to be paid out, presented above in USD at the period-end rate.

(2)	Amounts above do not include payments related to the Company’s anticipated asset retirement obligation.

Fair Value of Financial Instruments

The carrying value of cash is at fair value, while accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the relatively short periods to maturity and terms of these financial instruments. The methodology and assessment of inputs for determining the fair value of financial assets and liabilities as well as the levels of hierarchy for the Company’s financial assets and liabilities measured at fair value remains unchanged from that at December 31, 2009.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

6.	Short term investments and other investments

	March 31, 2010						December 31, 2009
Available for Sale	Fair Value		Cost		Accumulated unrealized holding gains (losses)		Fair Value		Cost		Accumulated unrealized holding gains (losses)
Short term investments	$	95,691	$	92,818		2,873	$	92,623	$	92,153		470
Investments (1)		1,009		405		604		1,553		405		1,148
	$	96,700	$	93,223		3,477	$	94,176	$	92,558		1,618

(1)	Investments in certain equity securities are presented in other assets on the balance sheet (Note 9).

7.	Inventories

Inventories consist of:

	March 31, 2010			December 31, 2009
Concentrate inventory	$	12,863		$	15,379
Stockpile ore		21,156			21,892
Direct smelting ore		1,462			1,462
Doré and finished inventory		27,055			27,577
Materials and supplies		28,296			28,147
		90,832			94,457
Less: non-current direct smelting ore (Note 9)		(1,011	)		(1,011	)
	$	89,821		$	93,446

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

8.	Mineral Property, Plant and Equipment

Acquisition costs of investment and non-producing properties together with costs directly related to mine development expenditures are capitalized. Exploration expenditures on investment and non-producing properties are charged to operations in the period they are incurred.

Capitalization of evaluation expenditures commences when there is a high degree of confidence in the project’s viability and hence it is probable that future economic benefits will flow to the Company. Evaluation expenditures, other than that acquired from the purchase of another mining company, are carried forward as an asset provided that such costs are expected to be recouped in full through successful development and exploration of the area of interest or alternatively, by its sale. Evaluation expenditures include delineation drilling, metallurgical evaluations, and geotechnical evaluations amongst others.

Mineral property, plant and equipment consist of:

	March 31, 2010							December 31, 2009
	Cost		Accumulated Amortization			Net Book Value		Cost		Accumulated Amortization			Net Book Value

Huaron mine, Peru	$	93,482	$	(34,749	)	$	58,733	$	92,768	$	(33,966	)	$	58,802
Morococha mine, Peru		100,904		(26,874	)		74,030		97,568		(25,140	)		72,428
Alamo Dorado mine, Mexico		181,832		(73,063	)		108,769		181,903		(68,320	)		113,583
La Colorada mine, Mexico		55,528		(34,052	)		21,476		53,951		(33,239	)		20,712
Manantial Espejo mine, Argentina		312,838		(46,298	)		266,540		311,357		(37,993	)		273,364
San Vicente mine, Bolivia		106,103		(15,524	)		90,579		105,445		(12,543	)		92,902
Other		6,284		(2,020	)		4,264		2,229		(1,222	)		1,007

TOTAL	$	856,971	$	(232,580	)	$	624,391	$	845,221	$	(212,423	)	$	632,798

Non-producing properties:
Morococha, Peru						$	17,766						$	19,012
Aquiline Group (Navidad project – Note 3)							863,278							804,308
Other							1,607							1,606
TOTAL Non-producing properties						$	882,651						$	824,926

TOTAL Mineral Property, Plant and Equipment						$	1,507,042						$	1,457,724

Navidad Project, Argentina

During the quarter ended March 31, 2010, the Company capitalized $4.7 million of evaluation costs at the Navidad Project in Argentina (NIL million in 3 months ended March 31, 2009).

9.	Other Assets

Other assets consist of:

	March 31, 2010		December 31, 2009
Long-term refundable tax, net	$	15,029	$	11,909
Long-term receivable, net (Note 5)		3,825		3,825
Reclamation bonds		184		132
Investments (Note 6)		1,009		1,553
Non-current direct smelting ore (Note 7)		1,011		1,011
Future income tax asset		446		-
	$	21,504	$	18,430

10.	Accounts Payable and Accrued Liabilities

Account payable and accrued liabilities consist of:

	March 31, 2010		December 31, 2009
Trade accounts payable	$	20,844	$	29,836
Other accounts payable and trade related accruals		16,966		18,108
Acquisition costs payable (Note 3)		2,749		7,582
Payroll and related benefits		12,369		12,848
Severance accruals		5,454		4,781
Payment due for mineral property acquired (Note 3)		-		5,799
Capital leases		450		646
Advances on concentrate		22		5,668
Other		11,359		10,891
	$	70,213	$	96,159

11.	Share Capital and Stock Compensation Plan

The Company has a comprehensive stock compensation plan for its employees, directors and officers. The plan provides for the issuance of common shares and stock options, as incentives. The maximum number of Shares which may be issued pursuant to options granted or bonus Shares issued under the 2008 Plan may be equal to, but will not exceed 6,461,470 Shares. The exercise price of each option shall be the weighted average trading price of the Company’s stock for the five days prior to the award date. The options can be granted for a maximum term of 10 years with vesting provisions determined by the Company’s Board of Directors. Any modifications to the stock Compensation Plan require shareholders’ approval.

The Board has developed long term incentive plan (“LTIP”) guidelines, which provides annual compensation to the senior managers of the Company based on the long term performance of both the Company and the individuals that participate in the plan. The LTIP consists of an annual grant of options to senior management to buy shares of the Company and a grant of the Company’s common shares with a two year no trading legend. The options are five year options which vest in three installments, one third on the first anniversary of the grant date and one third on each of the second and third anniversary dates of the award. Options and common shares granted under the LTIP plan are based on employee salary levels, individual performance and their future potential. The Compensation Committee oversees the LTIP on behalf of the Board of Directors. The LTIP plan guidelines can be modified or suspended, at the discretion of the Compensation Committee and the Board of Directors.

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

Transactions concerning stock options and share purchase warrants are summarized as follows in Canadian dollars (“CAD”):

	Incentive Stock Option Plan					Share Purchase Warrants
	Shares			Price CAD$		Shares		Price CAD$		Total Shares
As at December 31, 2008		614,640		$	21.88		-	$	-		614,640

Granted		442,008		$	17.73		-	$	-		442,008
Issued on acquisition		517,709		$	46.11		7,702,698	$	33.56		8,220,407
Exercised		(32,000	)	$	14.85		-	$	-		(32,000	)
Expired		(37,000	)	$	24.87		-	$	-		(37,000	)
Forfeited		(36,231	)	$	20.67		-	$	-		(36,231	)
As at December 31, 2009		1,469,126		$	29.66		7,702,698	$	33.56		9,171,824

Granted		438,633		$	24.13		-	$	-		438,633
Issued on acquisition		-		$	-		702,540	$	35.00		702,540
Exercised		(7,308	)	$	18.50		-	$	-		(7,308	)
Expired		-		$	-		-	$	-		-
Forfeited		(22,672	)	$	24.25		-	$	-		(22,672	)
As at March 31, 2010		1,877,779		$	28.48		8,405,238	$	33.68		10,283,017

Long Term Incentive Plan

In January, 2010 the Company awarded 31,824 shares of common stock with a two year holding period and granted 281,921 options under this plan. The Company used as its assumptions for calculating fair value a risk free interest rate of 2.0 per cent, weighted average volatility of 57 per cent, expected lives ranging from 1.5 to 3 years based on historical experience dividend yield of zero, and an exercise price of CAD $25.19 per share. The weighted average fair value of each option was determined to be CAD $8.53.

During the quarter ended March 31, 2010, 7,308 common shares were issued for proceeds of $0.1 million in connection with the exercise of options under the plan (March 31, 2009 – 22,000 and $0.3 million, respectively).

In February, 2010 the Company granted a further 156,712 options under the guidelines of this plan as a transactional award to certain employees arising from the Aquiline acquisition described in Note 3. The Company used as its assumptions for calculating fair value a risk free interest rate of 1.5 per cent, weighted average volatility of 55 per cent, expected lives ranging from 1.5 to 3 years based on historical experience dividend yield of zero, and an exercise price of CAD $22.23 per share. The weighted average fair value of each option was determined to be CAD $8.04. The options are unvested at the grant date and will vest only when a positive construction decision is made by the Board with regards to the Navidad project and only if that decision is made no later than 3 years from the grant date of the options.

Share Option Plan

The following table summarizes information concerning stock options outstanding and options exercisable as at March 31, 2010. The underlying options agreements are specified in Canadian dollar amounts and includes 517,709 options issued as part of the acquisition of Aquiline Resources Inc. (Replacement Options as discussed in Note 3):

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

		Options Outstanding						Options Exercisable
Range of Exercise Prices CAD$		Number Outstanding as at March 31, 2010		Weighted Average Remaining Contractual Life (months)		Weighted Average Exercise Price CAD$		Number Exercisable as at March 31, 2010		Weighted Average Exercise Price CAD$
$	5.00		155,000		7.50	$	5.00		155,000	$	5.00
$	17.73 - $ 22.23		678,609		43.07	$	19.37		250,828	$	19.35
$	25.19 - $ 28.41		397,688		47.02	$	26.16		124,404	$	28.30
$	33.00 - $ 36.66		159,960		29.71	$	35.96		117,046	$	35.70
$	48.10		486,522		10.92	$	48.10		486,522	$	48.10
			1,877,779		31.50	$	28.48		1,133,800	$	32.39

For the three months ended March 31, 2010, the total employee stock-based compensation expense recognized in the statement of operations was $0.8 million (March 31, 2009 - $0.8 million).

Share Purchase Warrants

As part of the acquisition described in Note 3, the Company issued share purchase warrants (Consideration and Replacement Warrants) in connection with the acquisition of Aquiline Resources Inc.

		Warrants Outstanding						Warrants Exercisable
Range of Exercise Prices CAD$		Number Outstanding as at March 31, 2010		Weighted Average Remaining Contractual Life (months)		Weighted Average Exercise Price CAD$		Number Exercisable as at March 31, 2010		Weighted Average Exercise Price CAD$
$	10.02		480,287		18.74	$	10.02		480,287	$	10.02
$	35.00		7,873,463		56.43	$	35.00		7,873,463	$	35.00
$	52.10		51,488		4.24	$	52.10		51,488	$	52.10
			8,405,238		53.95	$	33.68		8,405,238	$	33.68

Key Employee Long Term Contribution Plan

An additional element of the Company’s compensation structure is a retention program known as the Key Employee Long Term Contribution Plan (the “Contribution Plan”). The Contribution Plan was approved by the directors of the Company on June 2, 2008 in response to a heated labour market situation in the mining sector, and is intended to reward certain key employees of the Company over a fixed time period for remaining with the Company.

The Contribution Plan is a four year plan with a percentage of the retention bonus payable at the end of each year of the program. The Contribution Plan design consists of three bonus levels that are commensurate with various levels of responsibility, and provides for a specified annual payment for four years starting in June 2009. Each year, the annual contribution award will be paid in the form of either cash or shares of the Company. The minimum aggregate value that will be paid in cash or issued in shares over the 4 year period of the Plan is CAD $10.8 million with CAD $7.9 million remaining to be paid as of March 31, 2010 as described in Note 5. Currently, it is planned that any such payments will be made by way of cash. No shares will be issued from the treasury pursuant to the Contribution Plan without the prior approval of the plan by the shareholders of the Company and any applicable securities regulatory authorities.

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

12.	Earnings Per Share (Basic and Diluted)

For the three months ended March 31,	2010						2009
	Income (Numerator)		Shares (Denominator)		Per-Share Amount		Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net Income	$	19,113					$	6,610

Basic EPS	$	19,113		106,686	$	0.18	$	6,610		84,140	$	0.08
Effect of Dilutive Securities:
Stock Options		-		264				-		285
Warrants		-		278				-		-

Diluted EPS	$	19,113		107,228	$	0.18	$	6,610		84,425	$	0.08

Potentially dilutive securities excluded in the Diluted EPS calculation for the quarter ended March 31, 2010 were 8,969,121 out-of-money options and warrants (March 31, 2009 – 258,691).

13.	Changes in Non-Cash Operating Working Capital Items

The following table summarizes the changes in operating working capital items:

	Three months ended March 31,
Changes in non-cash working capital items	2010			2009
Accounts receivable and other current assets	$	14,286		$	(10,174	)
Inventories		3,455			(6,828	)
Prepaid expenses		(1,413	)		483
Accounts payable and other current liabilities		(17,642	)		(3,037	)
Income taxes payable		2,376			(4,817	)
	$	1,062		$	(24,373	)

14.	Segmented Information

All of the Company’s operations are within the mining sector, conducted through operations in six countries. Due to geographic and political diversity, the Company’s mining operations are decentralized whereby Mine General Managers are responsible for achieving specified business results within a framework of global policies and standards. Country corporate offices provide support infrastructure to the mines in addressing local and country issues including financial, human resources, and exploration support. The Company has a separate budgeting process and measures the results of operations and exploration activities independently. The Corporate office provides support to the mining and exploration activities with respect to financial, human resources and technical support. Major products are Silver, Zinc, Lead and Copper produced from mines located in Mexico, Peru, Argentina and Bolivia. Segments have been aggregated where operations in specific regions have similar products, production processes, type of customers and economic environment.

Pan American Silver Corp.

Notes to Consolidated Financial Statements (Unaudited)

As at March 31, 2010 and December 31, 2009 and for the three month periods ended March 31, 2010 and 2009

(Tabular amounts are in thousands of U.S. dollars except number of options and per share amounts)

	For three months ended March 31, 2010
	Peru												Mexico						Argentina			Bolivia			Other(1)
	Huaron			Morococha			Quiruvilca			Peru Office			Alamo Dorado			La Colorada			Manantial Espejo			San Vicente			Other(1)			Total
Sales to external customers	$	16,049		$	20,624		$	13,381		$	-		$	18,245		$	15,497		$	35,023		$	13,556		$	-		$	132,375
Depreciation and amortization	$	(817	)	$	(1,609	)	$	-		$	(39	)	$	(4,456	)	$	(1,579	)	$	(7,970	)	$	(3,256	)	$	(94	)	$	(19,820	)
Exploration and project development	$	-		$	(589	)	$	-		$	(77	)	$	(89	)	$	(176	)	$	(802	)	$	-		$	(3,719	)	$	(5,452	)
Accretion of asset retirement obligation	$	(144	)	$	(56	)	$	(99	)	$	-		$	(111	)	$	(81	)	$	(176	)	$	(65	)	$	-		$	(732	)
Interest and financing expenses	$	(44	)	$	(69	)	$	(27	)	$	-		$	-		$	-		$	-		$	(56	)	$	(580	)	$	(776	)
Gain (loss) on sale of assets	$	8		$	-		$	-		$	2		$	(24	)	$	-		$	-		$	-		$	-		$	(14	)
Investment and other (expenses) income	$	851		$	399		$	(37	)	$	3		$	13		$	(16	)	$	3		$	-		$	135		$	1,351
Foreign exchange gains (losses)	$	1,377		$	(494	)	$	(2,614	)	$	(24	)	$	(1,419	)	$	90		$	65		$	129		$	5,908		$	3,018
Gain (loss) on commodity and foreign currency contracts	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	(703	)	$	(703	)
Income (loss) before income taxes	$	2,687		$	3,938		$	2,367		$	127		$	2,878		$	4,505		$	9,192		$	3,927		$	908		$	30,529
Net income (loss) for the period	$	2,651		$	2,972		$	861		$	(230	)	$	1,115		$	2,661		$	7,722		$	458		$	903		$	19,113
Capital expenditures	$	849		$	1,851		$	-		$	251		$	134		$	1,577		$	1,480		$	1,012		$	4,877		$	12,031
Segment assets	$	60,512		$	120,617		$	52,540		$	1,218		$	149,526		$	46,418		$	343,366		$	123,748		$	1,007,666		$	1,905,611
Long-lived assets	$	58,733		$	91,846		$	-		$	260		$	108,769		$	21,476		$	266,539		$	90,579		$	868,840		$	1,507,042

(1) Included in Other is the Aquiline group segment as described in Note 3.

	For three months ended March 31, 2009
	Peru												Mexico						Argentina			Bolivia			Other
	Huaron/ Pyrite			Morococha			Quiruvilca			Peru Office			Alamo Dorado			La Colorada			Manantial Espejo			San Vicente			Corporate Office & USA			Total
Sales to external customers	$	12,378		$	13,441		$	6,037		$	-		$	21,975		$	7,549		$	6,204		$	2,822		$	-		$	70,406
Depreciation and amortization	$	(949	)	$	(1,875	)	$	(661	)	$	(52	)	$	(6,675	)	$	(1,859	)	$	(2,393	)	$	(318	)	$	(33	)	$	(14,815	)
Accretion of Asset retirement and reclamation	$	(151	)	$	(60	)	$	(197	)	$	-		$	(100	)	$	(81	)	$	(104	)	$	-		$	-		$	(693	)
Exploration and project development	$	-		$	-		$	-		$	(111	)	$	(82	)	$	(190	)	$	(94	)	$	-		$	(164	)	$	(641	)
Interest and financing expense	$	(23	)	$	(17	)	$	(29	)	$	-		$	-		$	-		$	-		$	(1	)	$	(356	)	$	(426	)
Gain on sale of assets	$	-		$	-		$	-		$	2		$	(5	)	$	(19	)	$	-		$	38		$	-		$	16
Investment and other income and expense	$	581		$	(304	)	$	1		$	60		$	(612	)	$	(10	)	$	(2,282	)	$	1		$	3,976		$	1,411
Foreign exchange gain (loss)	$	(1,205	)	$	(2,017	)	$	2,111		$	4		$	2,224		$	376		$	633		$	(64	)	$	(1,228	)	$	834
Net gains (loss) on commodity and foreign currency contracts	$	25		$	93		$	68		$	-		$	-		$	-		$	-		$	-		$	97		$	283
Income (loss) before income taxes	$	1,583		$	(1,089	)	$	1,386		$	96		$	6,393		$	526		$	(1,238	)	$	1,276		$	27		$	8,960
Net income for the period	$	697		$	(829	)	$	1,540		$	106		$	4,230		$	(79	)	$	(1,000	)	$	1,918		$	27		$	6,610
Capital expenditures	$	1,899		$	2,261		$	-		$	111		$	26		$	867		$	3,486		$	9,930		$	72		$	18,652
Segment assets	$	66,737		$	111,372		$	32,080		$	1,413		$	163,983		$	49,757		$	328,318		$	108,270		$	111,150		$	973,080
Long-lived assets	$	56,520		$	90,250		$	-		$	524		$	130,260		$	28,130		$	292,787		$	96,941		$	1,986		$	697,398

(1) Included in Other is the acquired Aquiline group segment as described in Note 3.

	Three Months period ending March 31
Product Revenue	2010			2009
Silver / doré	$	64,088		$	32,982
Zinc concentrate		19,562			6,390
Lead concentrate		20,731			12,357
Copper concentrate		31,438			19,137
Silver pyrites		-			262
Royalties		(3,444	)		(722	)
Total	$	132,375		$	70,406

625 Howe Street, Suite 1500

Vancouver, BC

Canada V6C 2T6

Tel: 604 684-1175

Fax: 604 684-0147