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Progress in Argentina bodes well for Pan American Silver, analyst says

Despite Argentina's continuing economic struggles (I, II, III) and the possibility of a technical default on the country's loans after its recent loss in a U.S. Supreme Court case, CIBC analyst Arnold Van Graan sees positive change coming for Pan American Silver (PAAS +5.9%), which operates the Manantial Espejo mine and the more significant Navidad project that has been stalled since 2012.

Van Graan points to recent deals such as Argentina approving $5B in compensation to Repsol for the YPF expropriation and a restructuring deal for $10B in Paris Club debt as evidence of improving trust among international investors.

Both on the improved outlook, CIBC believes PAAS should be in a position to disclose to the market some revised operating parameters for the Navidad project that should still acknowledge the risk of operating in Argentina by aiming at a higher grade, lower capex option.

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