* Shares down 1.01 percent to C$31.43
* Production falls, company maintains full year targets
* Does not see "intent" by Bolivia to take over mine (In U.S. dollars unless noted)
TORONTO, May 19 (Reuters) - Shares of Pan American Silver PAA.TO fell on Thursday after the miner reported lower than expected silver production, even though its quarterly profit rose more than threefold, beating analyst expectations.
Silver production for the quarter fell 3 percent to 5.3 million ounces, hurt by lower grades and political factors at its Peruvian, Bolivian and Argentine mines. [ID:nL4E7GJ05F]
Pan American was quick to reassure investors that the production shortfall would be made up and that the company was still on track to produce 23 million to 24 million ounces of silver this year.
Pan American shares were down 1.01 percent at C$31.43 on Thursday afternoon on the Toronto Stock Exchange. Producers Coeur D'Alene Mines (CDE.N) and Fresnillo (FRES.MX) also slipped slightly as commodity prices lagged.
Pan American's shares have fallen more than 20 percent since mid-April, when the Bolivian government said it may rescind some mining concessions, including those for the company's San Vicente mine. [ID:nN14168662]
"There was actually no mention of nationalizing San Vicente in President (Evo) Morales' speech on May 1," Chief Operating Officer Steve Busby said on a call with investors. "Nor has the company received any official correspondences discussing any intent by the government to take control of our mine."
Busby added that he expects San Vicente to meet or exceed production targets for the year.
"It has become one of the best performing assets in the company's history," he said.
With an average realized silver price of $31.94 an ounce in the first quarter and cash costs of $7.83 ounce, Pan American reported late Wednesday that its revenues rose 40 percent to $190.5 million. Its profit more than tripled to $92.7 million. [ID:nL4E7GJ05F]
Spot silver was trading close to $35 an ounce on Thursday, having tumbled some 30 percent in recent weeks from a record high of $49.51.
Pan American said that it would pay a second quarter dividend of 2.5 Canadian cents a share on June 15 to shareholders of record as of May 31, but would not commit to set dividends based on rising silver prices.
"We think its appropriate to return some of the cash flow back to our shareholders," said a company executive on the call. "However we do want to build up treasury so that we are in a good position for the financing requirements of the new projects."
Topping that list of new projects is the massive silver deposit at Navidad in the Chubut province of Argentina.
Chubut banned open-pit mining in 2003, but Pan American has repeatedly said it is confident that President Cristina Fernandez's pro-mining government will revise that decision.
"More than ever I am confident that we will see amendments to the legislation in the province that will allow us to develop Navidad," Chief Executive Geoffrey Burns said on the call. "I can't wait until the time we are allowed to dig a first shovel in at Navidad."
Still, Chubut's political future remains uncertain at the moment due to a disputed election to pick the next governor, and voting will be repeated in six polling stations on May 29.
The tight race pits a candidate backed by Fernandez's FPV wing of the Peronist party against a rival supported by the current Governor Mario Das Neves.
Pan American said it is confident that Navidad will be in the permitting stage by 2012, with production expected in mid- to late 2014.
$1=$0.97 Canadian Reporting by Julie Gordon, additional reporting by Helen Popper in Argentina; editing by Rob Wilson