Ore treatment begins at San Vicente

Wednesday, August 23, 2006

Privately held Bolivian mining company Emusa has begun treating ore at the San Vicente silver-zinc deposit in Potosí department, Emusa president Luis Mercado told BNamericas.

Emusa operates the deposit, a JV between Bolivia's state mining corporation Comibol and Canadian company Pan American Silver (TSX: PAA).

Ore treatment at San Vicente was stalled due to negotiations between Pan American - which holds 55% of the project - and Comibol.

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"Now we are operating normally. The disagreement between Comibol and Pan American has been resolved and we are working as of this month," said Mercado.

The company is currently treating 400t/d of ore, all of which is tagged for export, according to the executive.

A 2000 pre-feasibility study at San Vicente showed the deposit has a measured and indicated mineral resource of 2.4Mt grading 383g/t silver and 4.4% zinc, and an inferred resource of 1.7Mt grading 349g/t silver and 5.3% zinc.

Pan American is progressing with a feasibility study to expand mine output as well as build a new mill on the property, the company previously reported.

San Vicente is located in Potosí department's Sur Lípez province.