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Investors continue to like Pan American Silver Corp. (PAAS), driving the company’s stock up from close to $22 three months ago, to more than $28 these days.

Recent news from the miner that it boosted its silver reserves by 20%, or by 35.4 million ounces in 2006, in addition to replacing all of the reserves it mined last year, should continue to fuel this optimism.

Analysts seem to agree.

Merrill Lynch’s Michael Jalonen has a $33 price target on the stock, representing upside of roughly 15%, while Richard Gray at Blackmont Capital sees the shares hitting C$44, a far more bullish expected appreciation of 32%.

They both have “buy” recommendations on the stock.

While Mr. Jalonen thinks the reserve increase was driven primarily by changes in metal price assumptions, he also noted that Pan American’s exploration is also contributing to its reserves.

The company’s Morococha mine in Peru saw proven and probably reserves climb 38%, while silver at the La Colorada mine in Mexico rose 22%.

PAAS 1-yr chart:

PAAS 1-yr chart

Source: Analysts Continue To See Upside For Pan Am Silver