Pan American silver production increases, profit down 61%

Despite reporting a 14% increase in silver production and record quarterly gold output, Pan American Silver Corp.'s (TSX:PAA) second-quarter earnings slid 61%, as the miner was hit by a double-digit decline in the precious metal prices.

The Canadian company, which operates silver and gold mines and projects in Mexico, Peru, Bolivia and Argentina, also raised its quarterly dividend by 33% to 5 cents a share.

The miner spent in June about $1.5 billion to acquire Minefinders Corp., operator of the multimillion-ounce Dolores gold and silver mine in northern Mexico, aiming to increase its near-term production.

Pan American also reported drill results from this year's ongoing exploration programs at the La Colorada mine in Zacatecas, Mexico, as well as from its development projects, the Waterloo silver project in San Bernardino County, California.

At La Colorada, Pan American said Wednesday drill results "have been exceptional" from both oxide and sulphide mineralization.

At Waterloo, the company said first phase drill results are also "exceptional," with several holes returning consistently high grades and wide intersects. It is increasing its exploration efforts there, including metallurgical test work.

In addition to gold and silver, Pan American produces lead, zinc and copper as by-products.

Silver prices are  down 27%, compared to August least year.

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