Welcome to the Pan American Silver first quarter 2010 earnings conference call. (Operator instructions) I’d now like to turn the over the conference to Kettina Cordero, Coordinator of Investor Relations. Please go ahead, ma'am.

Thank you, operator and good morning ladies and gentlemen. Joining me here today are President and CEO, Geoff Burns our Chief Operating Officer, Steve Busby; our Executive Vice President of Geology and Exploration, Michael Steinmann; and Chief Financial Officer, Rob Doyle. I would like to start this conference by reminding our listeners that this call cannot be reproduced or retransmitted without our consent. I also point out that certain of these statements and information in this call will constitute forward-looking statements and forward-looking information within the meaning of applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These statements reflect the company’s current views with respect to future events and are not necessarily based upon a number assumption and estimates, that while considered reasonable by the company are inherently subject to significant business, economics, competitive, political and social uncertainties and contingencies. Many known and unknown factors could cause actual results, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements, and the company has made assumptions and estimates based on or related to many of these factors. We encourage investors to refer to the cautionary language included in our most recent news release dated May 10, 2010 as well as those factors identified under the caption "Risks related to Pan American’s business" in the company’s most recent Form 40F and AIF. Investors are cautioned against attributing undue certainty or reliance on forward-looking statements, and the company does not intend or assume any obligation to update these forward-looking statements or information, other than as required by law. With that I will now turn the call to Geoff Burns, President and CEO.

Thank you Kettina. Good morning ladies and gentlemen and welcome to Pan American’s 2010 first quarter earnings conference call. As is become our normal format, I am going to start by making some brief opening comments, and then let Steve, Michael, and Rob provide more fulsome descriptions of our operations, project development activities, exploration programs, and overall financial position as of the end of the first quarter of this year. Overall, I'm pretty pleased with our first-quarter results. Relative to the first quarter of last year, we significantly increased our silver and gold production, reduced our cash cost, increased our bottom-line net income and generated more cash flow from operating activities and absolute free cash flow. Our headline metrics for the first quarter of 2010 are as follows. The silver production increased by 13% to 5.5 ounces. We increased our gold production by 34% to 27,896 ounces. Our cash cost declined 27% to $4.35 per ounce of silver, net of by-product credits. We increased our sales by 88% to 132 million. Our net income rose 189% to 19 million or $0.18 per share. We increased our cash flow before changes in our operating cash flows, before changes in non-cash working capital by 127% to 42.6 million or $0.39 per share. And lastly, our net free cash flow was almost $20 million right into the bank [ph]. While our Huaron mine had a difficult first quarter, all of our operations performed at or above expectations, and we were within 3% of our quarterly silver production forecast. This is clearly the benefit of having a diversified asset base, where in any given quarter production shortfalls at one of our operations can be offset by positive production performance at one of our other mines. This was the story in Q1. While our silver production remains on track to achieve our full year guidance of 23.4 million ounces, our gold production truly provided a positive surprise. Driven by better than anticipated gold grades at Manantial Espejo, we produced almost 7000 ounces more gold in the first quarter than we had expected. As a consequence, we have raised our full year gold production forecast to 95,000 ounces from 85,000 ounces, and have reduced our cash cost guidance to $5.90 per ounce as our by-product credits will benefit from the increased gold production and higher gold prices. We also paid our first dividend in the company's history during the first quarter. It is extremely rewarding to realize that your company has grown and evolved to a point where we can begin to return cash to our shareholders, while maintaining the financial strength to fund their future growth objectives. It will be our intention to continue this dividend on a semi-annual basis, and we will announce future dividends and payout dates as they are approved by the board. Now, I would like to turn things over to Steve, who will talk about our operating mines and development projects. Steve.

Thank you Geoff and good morning ladies and gentlemen. It is my pleasure to provide you a report on our first quarter 2010 mine operating performance and project development advances. We are focused this year on sustaining solid production performances at our seven operating mines, while bolstering our future growth potential with outstanding mine development projects, including our world-class Navidad deposit in Argentina. I'm going to start off my comments by discussing our one operation that had a challenging quarter. At Huaron in Peru our production was impacted by about 25%, after we made a decision to temporarily shut down an area of the mine that we had been trying to develop into a more productive mechanized mining area over the last couple of years. The ground conditions in this area were worse than we had expected, and we made the decisions to temporarily shut down the area, so we could step back, redesign and enhance both the ground control systems and the mining method. Despite this setback, we remain committed to successfully deploying mechanized mining methods that stand to significantly improve productivities and reduce cost at our long life Huaron mine. We are expecting continued reduced productivity and higher costs at Huaron for the next 4 to 6 months, as we redesign and restart the mechanized mining method. Meanwhile, our Quiruvilca and Morococha operations in Peru delivered solid production results as expected during the quarter. Overall, our Peruvian operations produced 1.7 million ounces of silver at a cash cost of $6.92 per ounce, which was below our planned production of 1.9 million ounces, but the mines did deliver better than our forecasted cash cost of $7.50 per ounce, thanks primarily to better than planned by-product base metal prices. We are also currently addressing labor related challenges in Peru, where…

Thank you Steve. Good morning. We have ambitious exploration plans for 2010, advancing several products at the same time and increasing our ground field exploration at Manantial Espejo and San Vicente. The activities at our sites and projects have been impressive. Including the infill in metallurgical drilling at Navidad, we completed a total of nearly 60,500 meters of drilling during the first quarter of 2010. This is a company record and more than on track to finalize our 183,000 meter program for this year. Including our 8300 meters of drilling at Manantial Espejo, and over 2600 meters of San Vicente of exploration programs initiated at both sites in October 2009 gained momentum. Let us have a detailed look at some of the exciting results. I'm sure you will remember the exceptional exploration results enjoyed last year at La Colorada. We added more than 16 million ounces of silver to our proven and probable reserves, extending the mine life of La Colorada by at least three more years. Drilling continues at the San Vicente [ph], which is returning similar results to what we published at the end of last year. Exploration also returned exceptional results from the (inaudible) exploration. Although no final resource estimate has been done yet, it seems that we already added more than one year of additional production to La Colorada mine life during the first quarter. Exploring this wide and high grade range is a real pleasure, and I'm confident that we will see more impressive results from La Colorada during the rest of the year. In the past, I mentioned many times Manantial Espejo’s excellent exploration potential. At the beginning of the southern hemisphere summer, we started the first exploration program at Manantial since the construction of the mine. Most of the drilling is currently focused…

Thank you. Good morning ladies and gentlemen. On a financial perspective, it has been another busy quarter at Pan American. Some of the significant events were the successful completion of the comprehensive acquisition process for Aquiline common shares, which allowed us to buy the remaining 7% of the company that we did not acquire in 2009. This resulted in issuance of 1.7 million Pan American shares, and some significant movements on our balance sheet, including increases in property, plant and equipment; future income tax liabilities; and a reduction in the noncontrolling interest account. As Geoff mentioned, we also declared our first-ever dividend of $0.025 in late February, and expect this to become a biannual event. Silver Wheaton elected to convert the convertible debenture that we inherited through the Aquiline transaction into a silver stream contract. Since we're still in the process of negotiating the definitive agreement with Silver Wheaton, we have not changed the accounting treatment in the quarter, and still reflect the fair value of the debentures as other liabilities on the long-term portion of our balance sheet. From an earnings and cash flow perspective, our results in Q1 2010 were dramatically better than the comparable period of 2009, when metal prices were vastly lower. Of course, we have also ramped up operations at Manantial Espejo and commissioned San Vicente since Q1 2009, which also helped us to achieve nearly a threefold increase in net income, and more than double operating cash flow from a year ago. However, relative to our strong financial results in Q4 2009, we were a little disappointed that our Q1 2010 results were not even better. The following factors are relevant when comparing Q1 2010 results with the results of the last quarter of 2009. The biggest difference was the quantity of metals sold.…

Thank you Rob. Yesterday we held our annual general meeting here in Vancouver, and I had the pleasure of being able to give a presentation to our shareholders who attended in person. I like to use this opportunity to share with those of you who have joined us on the call this morning the key messages in that presentation. Our mission is straightforward. We are going to focus on optimizing our current operations, and maximize our cash flow generating capacity and profitability. We are going to continue to aggressively explore around our current assets to extend their respective mine lives. There is no question that the best exploration potential we see is within the shadow of our own head frames. As Michael has just described, La Colorada, San Vicente, and Manantial Espejo have tremendous exploration potential that we are just starting to tap into. Lastly, we are going to put our project development teams to the test, as we ramp up development work at both La Preciosa silver project in Mexico, and the Navidad silver project in Argentina. These two projects are Pan American’s future, and have the potential to take our silver to a completely new level. I just returned from a trip to our Navidad project, and I'm having difficulty finding the word to properly convey how excited I am about this project. I stood at the top of the (inaudible) deposit, which is the topographic high, some 150 meters above the valley floor and I looked off to the east. What I saw was a miner’s dream, and like nothing I have been involved with in the tough 25 years I've been in the precious metals business. Calcite Hill, Navidad Hill, Connector Zone, Galena Hill, Barite Hill and Valle Esperanza, almost 6 continuous kilometers of the Navidad…

(Operator instructions) First question comes from Haytham Hodaly with Salman Partners. Please go ahead.

Good morning Geoff. Good morning everybody.

Good morning Haytham.

Just a couple of simple questions. Maybe I will start with Manantial Espejo, like the grades like you said, the gold grades are looking pretty good, what is your actual gold forecast for that operation for this year?

Just one second Haytham.

We will be just over -- our forecast right now Haytham, this is Steve, will be just over 70,000 ounces.

Steve, is that contained or is that payable?

It is virtually all payable. I think we get 99% payable on that.

Okay. So pretty close. Perfect, 99% and then with regards to your forecast for cash costs companywide of 590, are you using local price in that assumption?

I think it is still…

975 Haytham.

975, perfect. Thank you Ron. And then your G&A forecast for 2010, it looks like obviously if you were to take out the stock-based compensation, you would be somewhere south of $10 million. But from what I recall when we spoke last, I think it was supposed to be $11 million to $12 million, what is your actual forecast for the stock-based compensation this year?

Yes, I think we're going to be right around the $11 million to $12 million Haytham.

Okay, still at 11 to 12. Perfect. That hasn’t changed yet?

That has not.

And then maybe just a question for Rob, your effective tax rate for the year, I know you talked about 38% in the first quarter, 37.5% the tax implications are, would you expect 30% for the remainder of this year?

It really depends on how we treat the exploration expenditures in Mexico and Argentina, Haytham, I would say that if we continue along the conservative route of assuming there is no tax benefit on those expenditures, then the tax rate will be a little higher maybe in the sort of 35, the same range, but as we make progress we may be able to change our outlook on that treatment.

Okay. Can you keep us updated on what you decide to do there?

Absolutely.

Perfect. That is it gentlemen. Thank you very much.

Thank you.

Your next question is from Chris Lichtenheldt of UBS. Please go ahead Chris.

Hi, good morning everyone. First just Rob, can you remind or just repeat again maybe what you said about the inventory, you sold most of the metal, but then there is a small build in inventory of gold. Is that right?

That is correct. I mean, we built up 2000 ounces of gold in inventory but that was offset by an equivalent amount of value draw down in our basement of concentrate inventory. So for the quarter net-net we sold the same amount of value as we produced.

I see, okay. Great, thanks. And just a quick question on the situation in Argentina if I can, you said you anticipate that once you’re able to convey that a responsible mine can be constructed that that may sway them to change things so that open pit mining would be allowed. Do you expect that conveying to occur in the form of a feasibility study. Is that the type of conclusion they would need or maybe the PEA or would that just be ongoing discussions in their site visits, if you don’t mind commenting on that?

Yes, I think that we are probably crossing about three or four different thresholds or three different things we’re working on at the same time. One is as Steve mentioned, we are very active in our social programs working with the communities, the local communities of Gastre and Gan Good afternoon, where we’ve done most of our hiring for our current team on the site, where we’re working with those communities on water, power, and a number of other initiatives. That’s one aspect. Certainly, as we move forward with our development ideas, we’re going to be sharing those with the government in terms of the size of the plant, the location, what it is we’re going to building, how much we’re going to be spending to do that build. We’re also working with the government very much in looking at what the potential benefits are financially in terms of taxes to their region and yes, we’ve already had a number of the senior officials visit our Manantial Espejo mine site that actually happened last year, or excuse me first quarter of this year, and which very clearly demonstrates how we’ve developed that project. So, as we, you know, we have all these initiatives going on at the same time and we are aware that they are indeed working on the law right now, and drafting the law and we think with these initiatives and with their own political impetus that we are going to see that change in the near future.

Okay, that’s great. Thanks a lot. I think that’s it from me then. Thanks.

Okay, thanks Chris.

Take care.

The next question is from Steven Butler of Canaccord Genuity [ph]. Please go ahead.

Good morning guys. Rob, you had addressed the group here with respect to revenues in the quarter, and in fact sales volumes that was one of my questions, sales volume is you were saying or suggesting that we’re very close to production volumes. Is that correct?

That is correct, Steve. The only thing is that we did -- as I mentioned we did the incur $2.8 million negative sales adjustment in the quarter. So --

Okay, and that’s excluded from your realized pricing table. Is that correct?

That is correct.

Okay, and guys as you’re evaluating things, Rob, as you are evaluating then the Navidad’s future, Geoff, any comments is it really going to still be based on Loma de La Plata as a starting point for the preliminary economic assessment or the PEA now?

Steve, I can’t go too far, let’s say certainly Loma de La Plata is going to be a very, very important component of the PEA. What I will say is our metallurgical testing to date is starting to suggest that there is a lot more material available within Calcite Hill, within Navidad Hill itself, within Galena Hill that had previously been excluded from the PEA that was put together, I believe by Snowdens [ph] for Aquiline. So, yes, Loma de La Plata is important but we are finding that there is a much more of the deposit that may find itself in that PEA.

And simply because the met testing Geoff, not because of drilling new less refractory resources?

I think that (inaudible) doing all this work, I mean, typically you come up with a measured and indicated and then a referred resource and you do your infill drilling and then you keep your fingers crossed that most of that is upgraded and maintained when you close out or tighten your spacing. I think finding that at this stage that most of what we had classified is actually being retained, and measured and indicated and inferred category. So that’s really positive news. Having said that are we drilling less refractory material, no, what we are finding is that there is some very distinct zonation to the mineralization in the zones that were previously thought to be completely refractory, and --

Okay.

Our view is that -- again I don’t want to go too far. We are working that equation right now, but I will say I’m very optimistic about the results that I’ve seen today.

Okay, Geoff, and then with the timing of permits I guess really has come sometime after full fees or are there preliminary permits may be granted on a PEA, or is it full fees after which you would expect permits to come through thereafter?

Yes, this is Steve Steven. Our view is it will be almost simultaneous, we will be working the full feasibility study simultaneously with the permit and EIA. So you know, we are preparing ourselves to submit the EIA immediately after the law is passed, and at the same time finishing off our feasibility study and hopefully the permit to construct would occur simultaneously with the issuance of the full feasibility study.

Okay, and lastly guys sorry, the laws that are envisioned to be revised drafting changes to law, is it primarily the ban on open tip mining that could be hopefully no longer a ban?

That’s correct Steve. There is a provision within the current legislation to zone different pieces of the province in different manners as it relates to open cut mining and the use of cyanide frankly. And we believe that with the drafting of the amendments that they are going to identify those zones and we fully believe that Navidad end up being in one of the zones where open cut mining is allowed. At the same time there are going to be other zones within the province, where open cut mining will continue to be banned.

Right, okay, and then how long is the current ban in place Geoff?

The law was renewed actually in June of last year for an additional three years.

June of ’09. Okay. Thanks guys.

Thanks Steve.

(Operator instructions) The next question is the follow up question from Haytham Hodaly. Please go ahead.

Thanks operator. Sorry guys. Just got one quick housekeeping issue, just with regards to depreciation levels, a question for Rob, are the depreciation levels presented on if you look at them on a unit to production basis, is that a good indicator of the level of depreciation we should use on a go forward basis for this year?

Yes, I would say that’s a good indication.

Okay, and then with regards to your tax, there’s just one other question. What’s a good deferred percentage proportion for this year?

Well, the current -- in the first quarter our current taxes were $7.9 million versus a total of $11.4 million. So there is about $3.5 million of deferred.

So 30% or 35% sort of thing?

Yes, somewhere in that range.

Okay, perfect. Thank you.

The next question is from Shey Ylonen of TD Newcrest. Please go ahead.

Thanks very much. Just a quick question on Navidad and your spending plans, you are looking at about $40 million over the next 10 months to get you towards the full feasibility construction decision. I presume that points whether you are conceiving, or you capitalizing that and also just second part of that was the -- can you give any guidance as to how that’s going to be weighted over the next three, four quarters, thanks?

Okay. Shey, the $40 million actually takes it’s a little bit longer than 10 months. It’s going to take us to a completion of feasibility study, which we’re envisioning in I’m going to say February of next year. In terms of the flow, we’ll probably see both 65% to 70% of that value capitalize as project development expenditures, whereas about 30% to 35% of that, that’s our current estimate volume flowing through the income statement, and I think in general terms, you can balance that on fairly much an even basis over the next 10 to 12 months.

Okay, great. That wasn’t included in your prior guidance with respect to any of this sustained capital et cetera?

No, it was not Shey. We actually just approved an expanded budget at our board meeting yesterday. I think it’s in our MD&A disclosure, where we went from about $16.5 million up to the $40 million and it’s just really reflecting the confidence we have in the deposit, and secondly quite frankly the size of the deposit is bigger than anything we’ve seen, and if you just think about the amount of drilling you need to do off-hand to tighten up the drill patterns when you’re going across 5 km of mineralized trend, you start to generate a pretty significant number, and as Michael said pretty significant meterage of drilling. So yes, that is a new disclosure Shey.

Okay. Thanks so much, guys.

There are no more questions at this time. I will turn the call back over for closing comments.

Well, thank you ladies and gentlemen for joining us here again to listen to our quarterly conference call. I very much look forward to our second-quarter and look forward to sharing some more exciting developments at Navidad and La Preciosa, and also with Michael continuing to drill holes all our assets. I fully expect to have some positive exploration news as well. Thanks very much.

Ladies and gentlemen, this concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.