http://finance.yahoo.com/news/pan-american-silver-eliminate-silver-123000255.htmlVANCOUVER, Sept. 10, 2013 /PRNewswire/ - Pan American Silver Corp. (PAAS: NASDAQ; PAA: TSX) ("Pan American" or the "Company") has decided to close out its outstanding silver and gold hedges.
The Company previously announced that it had entered into forward contracts for 5.3 million ounces of silver and 24,000 ounces of gold, at average prices of $20.43 per ounce of silver and $1,323 per ounce of gold, spread relatively equally over a period of 12 months. The amount of silver and gold under contract represented approximately 20% and 18% of the Company's forecasted 12-month silver and gold production, respectively.
Through accelerated physical metal delivery and straight repurchase, Pan American now intends to close all of these forward contracts before the end of the current year.
President and CEO, Geoff Burns commented on the Company's decision; "We decided to put the hedges in place as a short term tactical response, to reduce risk during a time of extreme price volatility. However, our action may have inadvertently sent the wrong message to the market and to our shareholders about our hedging philosophy and our view of the long term prospects for silver and gold." Burns continued, "We have become more comfortable that we will realize the benefits of our cost reduction initiatives and are considerably more optimistic about the short term prospects for both silver and gold, therefore negating the conditions that initially lead us to enter into the hedges. More importantly, we need to unequivocally reassure our shareholders that the Company's fundamental philosophy is still that of not hedging our precious metal production, thereby providing maximum exposure to the price of silver."