Welcome to the Pan American Silver Fourth Quarter and Year End 2008 Earnings Call. During today's presentation all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions) This conference is being recorded today, Thursday, February 19, 2009. I would now like to turn the conference over to Mr. Geoff Burns, President and CEO. Please go ahead sir.

Thanks, operator. Good morning ladies and gentlemen and welcome to Pan American Silver's fourth quarter and year end 2008 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. Before I ask Steve, Michael, and Rob, to update you on our mining operations, our development projects, our exploration programs and our financial conditions, I would like to start by making some brief comments about our performance during the fourth quarter and some observations about the current environment. When we last spoke at our third quarter earnings release call, on November 13th last year, I talked about how the precipitated fall in base metal and silver prices would impact Pan American's fourth quarter. I also outlined for you a number of steps we had implemented to combat the declining prices we were seeing. As a reminder, here is what we did last November. To insure we were well positioned to weather these volatile times, we immediately reduced our workforce company-wide by over 500 employees in contract. All of our senior executives took a 10% wage roll back. We deferred almost all of our Greenfield exploration programs and significantly reduced our Brownfield explorations. We revised our mining plants to increase mined ore grades across all operations. We canceled discretionary capital expenditures. We reduced or eliminated these external consultants and contractors and where elimination was not an option, we requested that charge out rates be reduced. We reviewed all our major supply and service contracts and requested price adjustments. In addition, we updated yield in early January with a release describing what we were seeing. So I trust this comes as…

Thank you, Geoff and good morning ladies and gentlemen. As we discussed in our third quarter conference call last November the fourth quarter started with the realization that the collapse of the metal prices had undermined our operating plans and immediate reaction was needed. We immediately gathered our top managers via teleconferences, site visits and meetings conducting a detailed examination of our mine plans under the new price environment for metals, and debated each of our primary costs and productivity drivers. The results plainly demonstrated to each of us that we needed to drastically change the way we approach our business and as such we launched the 15 point action plan that Geoff has summarized including: reductions in workforce, reductions in salaries, aggressive pursuit of supplier and contractor cost reductions, implementing a hiring wage freeze, showing up our mine cut off grades against the new metal prices and operating costs, reducing our mine developments to only those areas for no more than 2 years in advance of mining and reducing discretionary spending to absolute minimum levels. Our fourth quarter was a time to challenge our management skills to successfully implement the 15 point cost saving initiative we had to develop. I am pleased to be able to tell you that we are indeed succeeding in these efforts. However, before I tell you about the successes we are seeing I must report our operating performance results during the difficult transition period of the fourth quarter. During the fourth quarter our operations produced 4.64 million ounces of silver at a cash cost of $8.24 per ounce, which was heavily impacted by the declines in the price of our base metal by-product credits; lingering severe cost escalation in labor, energy and materials, as well as production disruptions from a few unexpected mechanical failures…

Thank you, Steve and good morning everybody. During each quarterly conference call in 2008, I updated you on the results and the advances of the exploration programs in our greenfield and brownfield projects. These efforts and results are reflected in the 2008 reserve and resource statement, which we finalized as of December 31, 2008. Details for each operation have been published in our press release on February 17th and are available on our corporate web site. Although we made some important changes, especially to our greenfield programs during the last quarter, we essentially completed our 2008 planned, 100,000 meter Diamond Drill program. As with previous years we have been very successful with the exploration of our operations. It is covered and defined during 2008 a total of 26.9 million ounces of silver, more than replacing the 22.2 million ounces mined. However, lower base metal price assumptions, coupled with higher cut-off grades, downgrades of 8.8 million ounces from reserves to resources, resulting in a corporate proven and probable reserve of 223.7 million ounces as of December 31, 2008, only 1.8% lower than the year before while ore reserves increased by 1% to 701,000 ounces. I am extremely pleased with this result. It confirms again the tremendous exploration potential we have in some of our assets. As mentioned before, detailed results from each of our operations and for all reserve and resource categories are available on our web site, and I would like to discuss here some of the highlights in further detail. At Huaron, proven and copper reserves increased 5% or 3.2 million ounces; after subtracting ore mines during 2008 were a total of over 62 million ounces, larger than indicated resources spent at 11 million ounces and incurred resources contained over 30 million ounces making Huaron one of our largest…

Thank you Michael and good morning everyone. Our financial results in Q4 2008, is really impacted by the turmoil in the metros and FX market. Soft decline in base metals was the primary factor behind the decision to prepare Quiruvilca for care and maintenance in 2009 and as consequence of that decision, to write down the carrying value of the mine to zero and to fully accrue all cost related to the impending decision of mining activities. As a result an impairment charge of $15.1 million was recognized along with an increase of $3.3 million for the provision of severance payments, which was charged to other expenses. Also included in other expenses for the quarter, were expenses related to reducing our workforce across the entire company of $1.1 million. Declining metals prices in Q4 also led to negative price adjustment of $8.8 million; as provision of concentrate sales recorded in Q3 were adjusted downward to reflect the lower prices. This negative adjustment to the sales line in our statement of operations was one of the factors behind the mine operating loss generated in the quarter of $9.9 million; the first such loss since the first quarter of 2003. Soaring US dollar caused us to recognize significant losses against our forward purchased of Mexican pesos and American dollars. In total, we recorded losses on these currency books of $12.3 million in the quarter of which $2.8 million was recognized. These losses were partially offset by gains of 6.4 million, which came from our zinc and lead forward sales position, leaving us with a net loss on commodity and currency contracts for the quarter of $5.8 million. In addition, the strengthening US dollar caused us to revaluate our non-US dollar cash and other working capital balances lower, creating a loss of $8.3…

Thanks, Rob. Okay, you have now heard in detail where we were. Let's look at where Pan American is headed, and why I am exceedingly optimistic about our prospects for 2009 and beyond. We are forecasting our 14th consecutive year growth in 2009 and are planning to produce 21.5 million ounce of silver at an average cash cost of $6.28 per ounce. We plan to more than double, actually almost triple our gold production and are planning on producing 85,000 ounces of gold in 2009. With the start up of Manantial Espejo and the expansion of San Vicente fuelling our growth, we will also see a significant reduction in our overall exposure to base metals. We estimate that in 2009, silver will account for 58% of our revenues, while gold sales should account for another 16%. 74% of our revenues are now exposed to precious metals. We have swallowed the bitter pill and taken a tough step to reposition our mining operation and the results are now showing. I think it is worth repeating what Steve mentioned in his review. In January, we produced 1.7 million ounces of silver at a cash cost of $5.97 per ounce; that is a 28% reduction in our cash cost, as compared to the fourth quarter of last year. We are preparing the highest cost of operation at Quiruvilca for a period of care and maintenance. Probably the toughest decision given the care growth was Pan American's founding operations when it was first acquired back in 1995, but its cost of production was rising and silver production was declining as it became more and more dependent on zinc. And Pan America can better expend its people resources on creating more value at our other assets. This has been wonderful mine for us this time.…

Thank you Sir. We will now begin the question and answer session. (Operator Instructions). One moment please for our first question. And Mr. Burns, it appears there are no questions at this time.

Right. Thank you operator. Again I would like to thank everyone for joining us here this morning and I am very much looking forward to reporting back to you with our results through the first quarter, probably in mid-May and to update you on our startups at San Vicente and how we are progressing and Manantial Espejo. Until then thanks very much.

Thank you, ladies and gentlemen. This concludes the Pan American Silver fourth quarter and year-end earnings conference call. This conference will be available for replay after 10 am, Pacific Standard Time, today through, through February 26, 2009 at midnight Pacific. You may access the replay system at any time by dialing 1800-406-7325 and entering the access code of 3984271. Thank you for your participation. You may now disconnect.