Is Bitcoin Mining Better than Silver Mining? An Interview with Geoff Burns, President and CEO of Pan American Silver Corp. (PAAS)

Wall Street Transcript

67 WALL STREET, New York - January 27, 2014 - The Wall Street Transcript has recently published its Gold and Precious Metals Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Precious Metals - Lower Gold Price Environment - Precious Metals Exploration and Production - Increasing Capital Expenditures - Emerging Markets Silver Consumption - Mining Safety and Environmental Concerns - Gold Production Cost Structures - Gold Price Stabilization

Companies include: Precious Metal Mining Companies

In the following excerpt from the Gold and Precious Metals Report, the CEO of Pan American Silver discusses the outlook for his company for investors:

TWST: Can you share some highlights from your own career and that of any of your core management team, and update us on changes to your key management?

Mr. Burns: I guess I'd start with the last part of your question. We have been very fortunate at Pan American. I joined the company about 11 years ago when we were on the cusp of a very major growth leg in our history. I teamed up with Ross, and he gave me the freedom to bring together a team of mining professionals. At that time prices of silver and gold were very low, as were many of the commodity prices, and I was fortunate enough to able to convince some of the best people that I have worked with in my 25-plus years in the industry to join Ross and me here at Pan American.

We formed an incredibly strong team with a straightforward mission. The mission was to take this very small but growing silver company and make it into a real mining company. And as I started to say, we have been very fortunate - this senior management team has remained together; the same team that was responsible for the growth in Pan American has remained basically intact over the last 11 years. There have been almost no departures of any of our senior operating, geological or financial personnel. So that part has been, for me, a wonderful experience, because the team not only works together well, but we socialize together well, and that has created a strength that I don't think I have ever witnessed in my 30-plus years in this business.

Myself, I started in gold mining in 1983 and spent the first almost 15 years of my career working for gold mining companies; all of them operating companies, predominantly with activity in Canada and the United States. I moved for a brief period of time to Coeur d'Alene Mines, where I was the Senior Financial Executive at Coeur, and it was my first taste of the silver business. I left Coeur in early 2003 and joined up with Ross at Pan American later that same year, and have been here as President and CEO since 2004. It has been a wonderful, wonderful ride, even though there are times like these when the ride gets a little bumpy.

When I joined Pan American, we had essentially two operations and a lot of dreams. We were doing about 6 million ounces of silver a year, and over the last 11 years we have brought five new mines into production, either acquiring them and expanding them or building them from the ground up. And we have taken our production from 6 million ounces to what we are intending to do this year, which is close to 25 to 26 million ounces. So over the last 11 years we have grown the company fourfold in terms of production and at the same time added a pretty healthy gold component, expecting to do somewhere in the neighborhood of 150,000 to 160,000 ounces of gold as well this year.

Last year our revenues topped out at just about $1 billion, and I can remember when I first started with the company, looking at our annual income statement and looking at a revenue line that was under $100 million. So it's sort of four times the amount of production and 10 times the amount of revenue, and it has been a tremendous ride.

TWST: That's a stellar performance, and it looks like Pan American has done very well despite the fact that the underlying spot price in silver has weakened pretty significantly. How has this drop affected your strategies and goals for the company? I know it must be a tremendous headwind for you. What do you see going forward?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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