Good day ladies and gentlemen, thank you for standing by. Welcome to the Pan American Silver second quarter 2009 earnings conference call. During today’s presentation, all parties will be in a listen-only mode. Following the conference will be open for questions. (Operator Instructions) I would now like to turn the conference over to our host, Mr. Geoff Burns, President and CEO. Please go ahead.

Thank you, operator; good morning, ladies and gentlemen and welcome to Pan American Silver’s second quarter earnings release conference call. Joining me today here in Vancouver, are Steve Busby, our Chief Operating Officer; Michael Steinmann, our Executive Vice President of Exploration and Mine Geology; Rob Doyle, our Chief Financial Officer; and Kettina Cordero, our Coordinator of Investor Relations. During our last conference call in mid May, I described the first quarter of 2009 as being a turnaround quarter for Pan American Silver. As we successfully reduced our consolidated cost by 28% and moved back into the block on all financial metrics. On that call, I also openly expressed my optimism that our results would only get better over the balance of 2009, as our two newest mines, Manantial Espejo in Argentina and San Vicente in Bolivia ramped up to full production capacities. It’s indeed rewarding to have delivered on that optimism during the second quarter. Here’s our headlines. In the second quarter, we produced a new quarterly company record, $5.8 million ounce of silver, up 28% from the same period a year ago and up 19% as compared to our first quarter of this year, our quarterly goal production also climbed by 20% from the first quarter of our quarterly company record of 25,000 ounces. Gold is now clearly our most significant byproduct, accounting for 18% of our total revenues. Our consolidated cash cost remains stable at $5.99 per ounce, just slightly below our full year forecast of $6 per ounce. This is extremely gratifying as we’ve been able to hang on to the massive cost decline we reported during the previous quarter. We generated mine operating income of $23.5 million, more than double of what we generated in Q1. Cash flow from operating activities was a very healthy $32…

After last five years of intensive project development and mine construction work, it is a pleasure to report our record breaking second quarter results to you today, which highlight our company’s now proven talents in bringing dreams into reliable producing mines that generate a solid economic base locally, while providing returns to our trusting shareholders. Let me start by jumping right into great news, with our outstanding performance of Manantial Espejo in Argentina. We reproduced just over 1 million ounce of the silver at a cash cost of negative $0.93 per ounce, net of an excellent byproduct credit from nearly 18,500 ounces of gold production, which more than covered all of our operating cost just by itself. Our start up hasn’t been without its own challenges, as we had lost one of our critical grinding mill motors during the quarter, which fortunately was replaced in early July without incurring the material impact to our 2009 forecasted production or cost. Despite this disruption, I believe the production and cost results speak for themselves. In particular, the plant processed over 144,000 tons of ore in the second quarter, which is almost 80% of the plant design capacity, in spite of the failed mill motor issue. The silver feed grade for the quarter was 232 grams per tons, with 88.5% recovery, just shy of our expectations. Whereas the Gold Mill feed grade was 3.8 grams per ton and 94.4% recovery, which is ahead of our expectations. We feel confident, we’ll be able to achieve our targets for both production and certainly for cost for 2009 at Manantial Espejo given we have completed the necessary plant winterization projects in time to prevent any weather related disruptions. I’d like to give a special recognition to our Argentine workforce, who has recently been named the Argentine…

Good morning ladies and gentlemen. Our financial results in Q2 2009, clearly, reflected much improved operating results; mine operating earnings of $23.5 million for the quarter, an increase of 124% from Q1 mine operating earnings. Current operating results were driven by record quarterly sales of $111.4 million as record production of silver and gold conciliated into significant increase in the quantities of precious metals sold. These quantity increases resulted in 7% higher sales than the comparable quarter of 2008. Despite 40% plus decline in realized base metal of prices and a 22% decline in realized total prices from a year ago. The addition of high margin tonnage from Manantial Espejo and San Vicente combined with the continuation and a recovery of metal prices resulted in a fairly expansion of our margin per ton in Q2. Our average margin per ton of ore milled has gone from about $10 in Q4 2008 to $28 in Q1 2009 to $40 in Q2 2009. Our consolidated total number of tons milled has increased by 27% over that same period. Healthier margins and more tonnage, that is at the heart of our improving operating and financial results. As Steve has discussed our San Vicente Mine in Bolivia enjoyed an exceptional startup buying as to clear commercial production as of April 1, 2009, just like the Manantial Espejo the quarter before commercial production at San Vicente was achieved in the first quarter after the completion of construction activities. Mine produced over 600,000 ounces of silver and almost 700 tons of zinc for Pan American, contributed $1.7 million of income to our bottom line and positive operating cash flow all in this first quarter production. San Vicente and Manantial Espejo non-full production, we are seeing higher cost of sales and deprecation charges. However, we continue to…

Thank you Rob, and good morning everybody. Q2 was a very active quarter for our exploration on both Greenfield and Brownfield projects. We drilled over 26,000 meters of diamond and RC drilling as part of our 53,000 meter annual drill budget. In addition, we executed over 4,200 meters of diamond drilling with our La Preciosa JV with Orko Silver in Mexico. The JV was announced on April 14, for the large 32,000 hector land package, including an indicated resource of $72 million ounces of silver on an inferred resource and then inferred resource of $97 million ounces. Pan American will spend this year $5.7 million for exploration metallurgical studies, site improvements and development. This budget includes over 30,000 meters drilling for diamond drilling, for a cost of about $3 million. I’d like to have first a more detailed look at the Brownfield programs for each of our operations. Although, we encountered very good results from all our Brownfield programs, La Colorada return by far the highest grade Intersects. Exploration has been very successful at La Colorada for several quarters now. You may recall the high gold, silver discovery from the last year, is nearly single handed responsible for the overall higher gold grades in the current La Colorada production. This year we started into program to explore the depth extension of the major NC2 vein, which has returned many holes with multi kilograms silver intersections containing also a higher lead and zinc grades and in some cases substantial gold credits. Building on this zone will continue for the remainder of the year and so there is an important resource for the future of La Colorada production. Both Morococha and Huaron exploration focused during the first six month of this year on high-grade targets and the results did not disappoint. The…

Thanks Michael. Okay, you have now heard in detail where we were. Let’s take a moment and look at where Pan America is headed and why I remain optimistic as ever about our prospects for the balance of 2009 and beyond. We are maintaining our production forecast for 2009, and are planning to produce 21.5 million ounces of silver, not including the production from our Quiruvilca mine, which is still moving towards care and maintenance. We are maintaining our cash cost forecast at $6 per ounce for the year, which you may recall was already reduced from 628 per ounce at the end of the first quarter based on better than expected results we achieved. We should be more than double, actually almost triple our gold production this year, and like silver are maintaining our 2009 production guidance for gold at 85,000 ounces. Although frankly, given the fact that we have already produced our 46,000 ounces of gold so far this year, I think we’ll do a little better here. We will continue with the ramp up of San Vicente and I trust you guys sensed from Michael as to how excited we are about what we are encountering now that we’ve started exposing and mining from Litoral vein. I think San Vicente is going to positively surprise even us over the balance of this year and beyond. We are going to restart significant exploration efforts at Manantial and San Vicente now that these operations are up and running. Some of the most prospective ground in all of Pan America surrounds these two operations, and neither property has really been touched with a diamond drill for the past three to almost four years. Now, that we are organized, have our permits and with drill rigs in place, we’re going to…

(Operator Instructions) Your first question comes from John Bridges - J.P. Morgan.

Just wondered, if you could give us a little bit more clarification on how you are handling Quiruvilca. You still mentioned it in your prepared remarks, but just wondered whether everything was being expensed in the income statement?

Indeed, every dollar that we’re spending at Quiruvilca, is going through and into our cash cost, we’re not deferring anything. So that certainly are, some mine development, we’re still doing limited mine development and other things that would normally have been capital that are now coming through as direct operating cost. So, especially a little over $10 reported in the second quarter is the fully loaded cash cost. In terms of plans, we’re still, as Steve mentioned, we’re still preparing Quiruvilca for care and maintenance at this price level with $14 prices and $10 cash cost, it may well keep going longer than we probably initially anticipated at the start of this year, because it is still making both $4 an ounce of production. So it may go further into 2010, but the longer term plan is still care and maintenance for Quiruvilca.

Then in early to this presentation, you could have got remarkable chart of trebling your productions since 2002. Just wondered whether the expressions especially you have been talking about is enough to show any growth next year, or will you just put, a recessed any study state absent deals?

I think John that we can look forward to some additional growth next year as we see full year’s production coming at San Vicente and relatively steady state from our other operations. We are looking very carefully at the discoveries we’ve made at our own projects. Do you see where there are opportunities for internally generated growth, probably the most prospective is at our Huaron operations, which is our largest proven and probable reserve. Where we could look at internally increasing capacity although it’s a little bit premature to talk much more than in those general terms on that. Then beyond that, yes, we are going to have to push along with La Preciosa, which we are very excited about, the more we get into it, the more we’re liking it, and yes, followed by acquisition activity to keep that growth profile going in 2011 and beyond.

Any part of the world, that you particularly like?

Well, simple, we are going to continue to focus in the areas where we are. There are opportunities in Mexico, I think there are some opportunities in Argentina, and certainly Peru still has some significant polymetallic systems that would fit into our portfolio.

Your next question comes from Haytham Hodaly - Salman Partners.

Couple of questions, just for in terms of forecast production guidance of 21 plus million ounces, can you just give us just a rough breakdown? Is there anything unusual that’s changed from last quarter? Is everything still in line?

Actually pretty much everything is still in line. I mean we’ve had although a few pluses and minuses with respect to our Peruvian operations and doing a little better in Mexico. Steve just said Manantial, we are expecting it to be pretty much bang on target for the year. So, I don’t think the pluses or minuses are worth going into Haytham. We’re pretty much right where we thought it would be.

What about CapEx? What’s your forecast CapEx , you have for the second half of the year?

It’s about $19 million, just under $20 million.

Can you give a breakdown of that roughly?

The biggest part of that is a part of this power line development at Manantial Espejo. We have about $5.7 million set aside to joint venture with the government on a power line. That’s still in the air, we may not spend that. The other big components are at Huaron and Morococha, where we are spending about $3 million each for the rest of the year.

That 5.7, that was in the 19 to 20, correct?

That’s correct.

Maybe one last question, just from a housekeeping perspective, the effective tax rate for this last quarter seemed a lot lower than the one before I believe, somewhere in the low 20s, what are your forecasting for effective tax rate for the full year?

Haytham, just coming right around 30%, that’s the sort of weighted average of our tax rate that we operate under, in a subject to any unusual items that should converge somewhere around 30%.

In what proportion that roughly would be deferred? Roughly, a third I’m guessing.

That’s right.

Your next question comes from Chris Lichtenheld - UBS. Chris Lichtenheld – UBS: Just a couple of questions, actually, just quickly first on, you just mentioned that you may spend $5.7 million at Manantial, but you may not, if you do spend that, should there be a distinct positive impact on cash out there?

Absolutely, yes. That investment, which would bring in power line, it’d probably be a 12 to 18 month period to construct the power line. We expect the cost savings with that power line to be on the neighborhood of $8 million per year of cost savings against our diesel fuel power generation today. Most substantial reduction in cash costs there.

Secondly on La Preciosa, I know that you said within 36 months you may be preparing a feasibility, but you mentioned, you’re really pushing on that given the attractiveness, is there a possibility, it will take all the three years or could that be done earlier based on your aggressiveness?

I’ll take that one Chris. Provided my partners at Orko aren’t listening too closely. Yes, there is a distinct possibility. I don’t want to be too aggressive and give you an earlier time line. We typically are conservative in our projections and conservative in our timelines, but I think there is a reasonable probability that we could get things done faster, depending on, the work that Michael’s doing on the exploration side, the work that Steven and his team are doing on the metallurgical side of things, and frankly the work Joe Phillips is leading on permitting an organizational structure and water and land acquisition. So, we are pushing on all those things very strongly and I would venture to say, I’d like to get them done as soon as we can. Chris Lichtenheld – UBS: So, you may spent more than the $5 million minimum in the first year, is that safe to say?

Well, I think, our budget this year is, as Michael said, is actually 5.7 to the end of December. So, we really didn’t get going on the ground until May. frankly, kind of mid-May. So we’re going to push pretty hard and easily cover that number and we’re just going to keep ramping forward as the result comes through.

Just a quick question on the Huaron, I noticed grades are down about 10% from the first quarter. Is that sort of the level we should expect for the next several quarters going forward or is that transient?

We’re expecting that grade to come back, what happened there is, we have a long haul stop in a fairly high grade areas, that we had poor ground conditions and we lost that stop and it has forced us to go elsewhere that we don’t have the grade. We’re now recovering that stop and we expect to get back into the grades, probably the latter part of third quarter and certainly into the fourth quarter.

Your next question comes from Shey Ylonen - TD Newcrest.

Yes, I just wanted to confirm the La Preciosa budget for $5.7 million, is that part of your $19 million CapEx budget?

Okay, that’s just being expensed. Geoffrey Burns Yes, it will be, that will be expensed.

(Operator Instructions) Your next question comes from Chris Lichtenheld - UBS.

You mentioned there’s sort of obviously a $4 margin or so at Quiruvilca, if prices stayed up here, sort of indefinitely, $13 to $15 silver that are based on the prices, I mean you said early 2010 potentially, but do you have a sense of how many quarters exactly you could run it?

There is certainly material that could take it easily to the end of 2010 at these price levels. After that there really is a major decision point, even assuming our cash cost stay where they are and silver stays at 14, because there are couple of capital expenditures that then we would have to look very carefully at with respect to tailings management in particular. So the easy answer today is, we are going to keep running it as long as it makes money, and that could be till the end of 2010, and you’ll have to ask me again as next year develops how our plans modify or change?

Your next question comes from Haytham Hodaly - Salman Partners.

I would just add a quick question on the income statement. The net gains on commodity and foreign currency contracts. That was the closeout of the zinc and lead hedges was that what that was?

Actually, no, because that gain was crystallized in the fourth quarter and the first quarter respectively, so that gain is really because of the weakening of the US dollar against Mexican Peso and Peruvian Sol. So, again, it’s almost all attributable to our ex-contracts.

When you actually made that announcement of $7.6 million, was for example, from the zinc hedge. You said that a portion will be settled monthly until December 2009, did that change?

All of those contracts are settling as scheduled, but the P&L effect of that sort of those contracts was crystallized in the first quarter and there’s no more income statement effect.

Thank you. There are no further questions in the queue. Management I would like to turn the conference back to you for any closing remarks.

Thanks, Lou. Ladies and gentlemen thank you for joining us again this morning for our second quarter conference call. Again, I’m very optimistic about how we’re going to continue to perform over the balance of 2009. I very much look forward to talking to you in November to discuss our third quarter results. Thank you.

Ladies and gentlemen, this concludes the Pan American Silver’s second quarter 2009 earnings conference call. This conference will be available for replay on the company’s website at www.panamericansilver.com. Thank you for your participation. You may now disconnect.