A million dollar acquisition puts Argentina again on the sight of mining worldwide since one of the largest silver reservoirs could be put in motion. The company in the center of the story chooses one more time to invest in Argentina.

In October, Pan American Silver Corp., a Canadian silver producer with base in Vancouver, made an offer to purchase all issued and available shares from its Canadian fellow Aquiline Resources Inc. for 607 million dollars. The deal, a friendly takeover, would be closed after completing all regulatory controls. Aquiline's shareholders must have the final say by mid December.

The company is a mid-cap producer, with operations in Argentina, Bolivia, Peru, the US and Mexico, and has seven mines. One of them is Manantial Espejo, a silver-gold mine located in the Argentinean province of Santa Cruz, and inaugurated last March. Manantial Espejo, the second in production in PAAS portfolio, was partly responsible for the company’s record results in the 3Q08, along with an expansion in their San Vicente mine in Bolivia.

It is no surprise that the mining mogul Ross Beaty is behind this initiative. His trajectory of successes in 37 years of expertise in the mining business took him to found, among other companies, Lumina, Global Copper and Pan American Silver –of which he is currently its chairman-. Raising the bet in Argentina? Its firm decision gives new impulse to a project considered one of the largest silver projects of the world, with an estimated production of 15 million ounces a year: Navidad (Christmas in Spanish).

The Navidad silver Project is located in Gastre, in the center of Chubut province, in the Argentinean Patagonia. The advanced exploration was a critical factor for its remarkable results in 2007, when the resources were doubled. New discoveries such as Loma de la Plata (Silver Hill) and Barite Hill changed the outlook for the deposit. In Loma de la Plata the silver mineralization is located at 150m from the surface, especially favorable for an open pit mine design.

Navidad was won in court by Aquiline from another Canadian miner, IMA Exploration –part of the Grosso Group- after a two-year battle due to confidentiality breaches. Aquiline took over the project in 2007.

Without a doubt, Pan American Silver and the local team from its Argentinean subsidiary Minera Triton have done an impeccable work in their relations with the government and the local communities, all of which made them be recognized as the mining company of the year in 2009 but also enjoy a total acceptance in the town of Gregores, the closest to the mine.

The challenge is now in 2010. Provided the acquisition agreement is accepted, the company will have to disembark in a province where there is a prohibition on open pit mining and the use of cyanide. In spite of this, they are quite positive on the future: the government has expressed its interest to allow mining to take place –and specifically this project-, to later use the funds it will provide to aid in the transformation of the production matrix in the region. Although cyanide is not mandatory for the success of this project, it would provide more alternatives. Pan American’s CEO, Geoff Burns, said the company is confident that when they explain to the community that they are all for balanced and environmentally responsible mining, people will give their blessing. The plans include completed feasibility by mid 2010 and the start of construction in 2011.

Still, Argentina continues receiving world-class investments. As most of the countries in Latin America, the region needs better legal stability, support from the governments, and the definition of state policies to favour the development of value creation alternatives such as mining, capable of mobilizing the economy significantly.