Pan American Silver Reports 3Q:22 Results

(Pan American Silver, 9.Nov.2022) — Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) reported unaudited results for the quarter ended 30 September 2022 (“Q3 2022”).

“Our Q3 results reflect the industry-wide challenge of softening precious metal prices combined with inflationary cost pressures,” said Michael Steinmann, President and Chief Executive Officer.

Added Mr. Steinmann: “On 4 November 2022, we announced a proposed acquisition of Yamana Gold by Pan American and Agnico Eagle. This accretive and transformational transaction would increase our silver production by approximately 50% and double our gold production through the addition of long-life, low-cost assets in Latin America, our core operating region. These assets generate strong cash flow, which would further strengthen our financial position and help establish an exciting future for growth and value creation for our stakeholders.”

Consolidated Q3 2022 Highlights:

  • Silver production of 4.5 mn ounces and gold production of 128.8 thousand ounces.
  • Revenue of $338.9mn, inclusive of a negative $4.8mn adjustment on open concentrate shipments, largely related to the decline in metal prices towards the end of Q3 2022.
  • Net loss of $71.2mn ($0.34 basic loss per share), impacted by: $15.1mn in net realizable value (“NRV”) inventory adjustments, primarily at Dolores; $12.6mn in investment losses on our short-term investments; and mine closure severance provisions of $9.4mn recorded for Manantial Espejo.
  • Adjusted loss of $2.8mn ($0.01 basic adjusted loss per share) excludes the impact from the NRV inventory adjustments related to the Dolores heap inventory, investment losses and the Manantial Espejo severance provisions, among other adjustments.
  • Operations generated $54.4mn of cash flow, net of $20.4mn in tax payments.
  • Silver Segment Cash Costs and All-in Sustaining Costs (“AISC”) per silver ounce were $14.62 and $17.97, respectively. Excluding NRV inventory adjustments, Silver Segment AISC was $18.46 per ounce.
  • Gold Segment Cash Costs and AISC per gold ounce were $1,184 and $1,614, respectively. Excluding NRV inventory adjustments, Gold Segment AISC was $1,482 per ounce.
  • As at 30 September 2022, Pan American’s financial position remains strong with working capital of $422.1mn, inclusive of cash and short-term investment balances of $187.2mn; a long-term investment in Maverix Metals Inc. with a fair value of $87.0mn; and $500mn available under our sustainability-linked credit facility. Total debt of $68.5mn was related to lease liabilities and construction loans.
  • A cash dividend of $0.10 per common share has been declared, payable on or about 2 December, 2022, to holders of record of Pan American’s common shares as of the close on 21 November 2022. The dividends are eligible dividends for Canadian income tax purposes.
  • Management is revising its estimate for full-year 2022 silver production to be between 18 and 18.5 mn ounces from the 19 to 20.5 mn ounces provided in the 2022 Original Operating Outlook. We expect the estimate for Silver Segment Cash Costs and AISC could be marginally above the high-end of the range in our 2022 Original Operating Outlook. Management reaffirms the 2022 Original Operating Outlook for gold production, and reaffirms the revised estimates for Gold Segment AISC provided in the Company’s MD&A for the period ended 30 June 2022. Gold Segment Cash Costs are now expected to be above the high end of the of the 2022 Original Operating Outlook. Please see the “2022 Guidance” section of this news release for further details.
  • The ILO 169 consultation process for the Escobal mine continues to progress with two meetings completed in October 2022. At this time, no date has been set for a potential restart of operations at Escobal.
  • At the La Colorada Skarn project, we updated our estimate for the mineral resource, with 95.9 mn tonnes now in the indicated category containing 94.4 mn ounces of silver, 2.7 mn tonnes of zinc and 1.2 mn tonnes of lead. In addition, the estimated inferred mineral resource totals 147.8 mn tonnes containing 132.9 mn ounces of silver, 3.4 mn tonnes of zinc and 1.5 mn tonnes of lead. This mineral resource estimate does not include drill results released on 1 November 2022 and 21 July 2022 that indicate a high-grade silver zone of mineralisation.


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