Pan American Silver Resolves Dukat Suspension.

Business Editors

VANCOUVER, B.C.--(BUSINESS WIRE)--Sept. 18, 2000

Pan American Silver Corp. (Nasdaq:PAAS)(TSE:PAA.)

A conference call to discuss this news and other Pan American Silver projects will be held on Monday September 18 at 8:00 a.m. Pacific Standard Time.

To access the call, dial 1-800-736-2760 and refer to call number 562258. To listen to a playback of the conference call by phone, dial 1-800-408-3053 (or 1-416-695-5800) and refer to call number 562258. The conference call will be broadcast live on the Internet via the website www.q1234.com, where it will also be archived for later playback.

(All amounts in U.S. dollars)

Pan American Silver Corp. announces a resolution to the suspension at the Dukat silver project in Magadan, Russia, through an agreement with Russian mining company Polymetal to form a new company that will combine the mining license and assets of the Dukat project. Pan American will hold a carried 20 percent interest in the new company with no future management or capital obligations. Polymetal will hold an 80 percent interest, fund all on-going expenditures and operate the project. The new company plans to begin construction of a new mine at Dukat as soon as possible.

This agreement resolves a protracted project suspension that began in December 1999, when Russian company Kaskol won at auction the Dukat mill building and related infrastructure, which Pan American planned to use to process the Dukat ore. In April 2000 Kaskol transferred its interests in these assets to Polymetal. Since the auction, Pan American has pursued a number of alternatives to resolve the dispute, including studies on building a new mill, negotiations with outside parties and litigation in Russian courts.

Although Pan American will retain a material interest in the Dukat project, the Company will neither operate nor exercise control over the mine development. Management is unable to determine the amount or timing of future cash flows from the project and has consequently decided to follow the most conservative accounting treatment possible and write off its $38 million carrying value for Dukat in the quarter ending September 30, 2000. The Company's ongoing interest in the mine will be accounted for as cash flow is realized.

Mr. Ross Beaty, Chairman and CEO of Pan American stated, "This agreement represents the best resolution possible under the circumstances. While we are disappointed that we will not be the operator at Dukat, we still hold a significant project interest and look forward to the new mine being developed in such a way that its value is optimized for all shareholders. I am pleased to have this matter behind us so we can fully focus our resources on increasing our Latin American silver production. In Peru our Quiruvilca mine is performing very well and we are building a new silver mine at Huaron, which should start production in the first quarter 2001. We are financing the re-opening of the La Colorada silver mine in Mexico, and hope to begin production there in late 2001. We are also advancing the San Vicente project in Bolivia. These projects should increase our silver production by more than 300 percent in the next two years."

The statements that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties that could cause actual results to vary materially from the targeted results. Such risks and uncertainties include those described in the Company's Form 40-F as amended. All amounts are expressed in U.S. dollars.