Pan American Silver Comments on Changes to Mining Legislation in Rio Negro, Argentina

Thursday, January 19th

"Pan American Silver Corp. (TSX: PAA.TO)(NASDAQ: PAAS) ("Pan American" or the "Company") owns 100% of the Calcatreu gold development project ("Calcatreu" or the "Project"), located in the Province of Rio Negro, in Argentina. Since acquiring the Project in early 2010 as part of the purchase of Aquiline Resources, the Company has performed only a modest amount of new work due to the fact that Rio Negro had banned the use of sodium cyanide, which is critical to the recovery of gold from Calcatreu's mineral resource.

On December 29, 2011, Rio Negro's provincial legislature passed law Nr. 4738, which among other things, allows for the use of chemical substances, including sodium cyanide, in mineral processing. The new law replaced law 3981 that limited mining activity. The new legislation was signed, published and enacted into law on January 9, 2012 and it also established the evaluation process for the filing and approval of an Environmental Impact Assessment ("EIA"), which is necessary to mine and process minerals in the province."