Pan American Silver Corp., today reports that the illegal strike which began on April 10th at its Huaron mine in Peru was settled on April 15th and that normal operations have resumed. In addition, the Company is pleased to take this opportunity to provide an update on its first quarter 2010 silver and gold production.

First Quarter 2010 Production

- Silver production was 5.5 million ounces, an increase of 13% as compared to the 1st quarter of last year.
- Gold production was 27,896 ounces, an increase of 34% as compared to the 1st quarter of 2009.
- Cash costs declined to approximately $4.50 per ounce, net of by-product credits, 27% lower than the cash costs in the first three months of 2009.

Consolidated silver production was 3% behind 2010's forecast for the first quarter, whereas gold production was almost 8,000 ounces above plan. Cash costs for the first three months of 2010 were approximately $4.50 per ounce, well below the Company's forecast of $6.40 per ounce(1) for the full year. Better than expected gold production primarily from the Manantial Espejo mine in Argentina and higher than predicted gold prices were the key contributors to the lower cash costs.

Silver production from the Morococha and Quiruvilca mines in Peru and the La Colorada mine in Mexico was in line with the Company's forecast, while silver production at the Huaron mine was well below expectations due to adverse ground conditions in several key production areas. Alamo Dorado and San Vicente both had excellent first quarters and were able to largely overcome Huaron's production shortfall for the quarter. Manantial Espejo's silver production was also below forecast; however, the mine's higher than expected gold production more than compensated for this fact.

Based on the first quarter's performance, Pan American still expects to achieve its full year silver production forecast of 23.4 million ounces(1). It is expected that production from Huaron will continue to be adversely affected by the difficult ground conditions until the third quarter of the year and thus the mine will likely fall short of its full year silver production target. However, better than anticipated silver ore grades at Alamo Dorado and San Vicente are also likely to continue and should entirely offset Huaron's shortfall for the year.

In addition, the Company anticipates that the positive gold production trend at Manantial Espejo will continue throughout the year and is therefore revising its anticipated 2010 consolidated gold production forecast upwards to 95,000 ounces(1) and its consolidated cash costs downwards to $5.90 per silver ounce net of the by-product credits(1).

"We've had a very solid start to 2010 and precious metals prices have remained robust," said Geoff Burns, President and CEO. "Silver averaged $16.93 per ounce in the first three months of 2010 and should provide very healthy operating margins for Pan American, even though the price was not quite as high as the consensus analyst expectations of US$18.40 per ounce."