Aquiline is also exploring its Calcatreu gold project in Argentina and its Pico Machay gold project in Peru.

Pan American expected to mail its share offer to Aquiline shareholders before the end of October 2009 and anticipated that take-up of the offer would be complete by the end of the year. The agreement includes a minimum tender condition of two-thirds of Aquiline shares. Assuming a full take-over, Aquiline shareholders would own about 19% of the enlarged Pan American.

Pan American President and CEO Geoffrey Burns acknowledged that existing laws in Chubut province prohibit open-pit mining and the use of cyanide in mineral processing. However, he expressed confidence that these laws can be modified to permit development at Navidad, because “there is the political will to allow for responsible development of Navidad.” Processing at Navidad would not necessarily require the use of cyanide, but mining would only be viable as an open-pit operation.

Pan American Silver poured the first doré its Manantial Espejo silver and gold mine in the Patagonia region of southern Argentina on December 29, 2008. “We have an excellent track record of working with both the government and local communities in Argentina,” Burns said. “Our successful development of Manantial Espejo resulted in us being recognized as the 2009 Mining Company of the Year in Argentina. That award was a testament to the dedication and professionalism of our Argentinean operating group. We are looking forward to working productively and proactively with the provincial government in Chubut and local communities that surround Navidad and are committed to developing Navidad into a flagship silver mine that both Pan American and the people of Argentina can be proud of. Pan American is confident that it can demonstrate to all interested parties in the provinces of Chubut and Rio Negro the benefits of responsible mining.”