After an eight-day strike, unionized workers at Pan American's Morococha silver mine in Peru reached a settlement with the Vancouver-based silver miner and resumed work on Friday, Pan American officials announced.
Pan American did not expect the short-term production disruption at Morococha to significantly impact its 2009 silver production forecast and the company still expects to mine 21.5 million ounces of gold this year.
The union workers had sought an increase in base pay and benefits. Pan American did not make public details of the settlement.
To make the best of the down time during reduced mining production during the strike, the company said repairs to a crack in the primary rod mill, discovered during the course of maintenance activities carried out during the strike, should be repaired in two days.
Meanwhile Pan American Silver also announced Tuesday that it has reached an agreement for the joint development of Orko Silver's La Preciosa silver project in the state of Durango, Mexico. The indicated resource is believed to contain 71.7 million ounces of silver and 97,000 ounces of gold.
Pan American and Orko have agreed to form a joint venture to develop Las Preciosa with Pan American providing 100% of the funds needed to develop and construct an operating mine in consideration for a 55% interest in joint venture, while Orko will continue its exploration expertise, the La Preciosa project and related concessions to remain a 45% interest.
The silver mine will spend US$16 million at La Preciosa over the next three years to conduct definition drilling, acquire surface rights, obtain permits, and prepare and deliver a feasibility study. Furthermore Pan American will spend $5 million in the first year of the development program.
Pan American will be the operator of the joint venture, and will form a management committee with representation from both Orko and Pan American.