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Home > News > Pan American Silver says...

Pan American Silver says $2.8M paste plant for Timmins on schedule for Q3

May 9, 2024


Pan American Silver Corp. reports unaudited results for the quarter ended March 31, 2024.

"Cash flow from operations before working capital changes of $133.2 million in the first quarter reflects strong performance on production and costs, with silver and gold production in line with our expectations, and costs for both metals lower than expected," said Michael Steinmann, President and Chief Executive Officer. "We progressed our major projects, notably the new ventilation infrastructure at La Colorada and the plant upgrades at Jacobina, while returning $58.0 million of capital to shareholders through $36.5 million in total cash dividends paid and $21.5 million in shares repurchased."

Added Mr. Steinmann: "The sale of our La Arena asset in Peru, announced on May 1, 2024, will further improve our financial position with an upfront cash payment of $245 million on closing, and is aligned with our strategy of continued portfolio optimization."

The following highlights for Q1 2024 include certain measures that are not generally accepted accounting principles ("non-GAAP") financial measures. Please refer to the section titled “Alternative Performance (Non-GAAP) Measures” at the end of this news release for further information on these measures.

Consolidated Q1 2024 Highlights:

  • Silver production of 5.01 million ounces and gold production of 222.9 thousand ounces were in line with management's expectations for Q1 2024.
  • Revenue of $601.4 million.
  • Net loss of $30.8 million ($0.08 basic loss per share), including: an inflation adjustment in Argentina that increased income tax expense by $15.2 million; a $14.4 million net realizable value ("NRV") inventory expense; and a $10.8 million non-cash investment loss, largely due to the decrease of the New Pacific Metals Corp. share price.
  • Adjusted earnings of $4.7 million, or $0.01 adjusted earnings per share.
  • Cash flow from operations of $133.2 million before working capital changes, including $41.1 million in cash taxes paid.
  • Silver Segment Cash Costs and All-in Sustaining Costs ("AISC"), excluding NRV inventory adjustments, per silver ounce of $12.67 and $16.63, respectively, were lower than management's expectations for Q1 2024.
  • Gold Segment Cash Costs and AISC, excluding NRV inventory adjustments, per gold ounce of $1,207 and $1,499, respectively, were lower than management's expectations for Q1 2024.
  • The Company reaffirms its 2024 Guidance, as provided in the Company's Q4 2023 Management's Discussion and Analysis ("MD&A") dated February 21, 2024.
  • As at March 31, 2024, the Company had working capital of $693.5 million, inclusive of cash and investments of $331.4 million, and $750.0 million available under its revolving Sustainability-Linked Credit Facility ("SL-Credit Facility"). Total debt of $806.6 million is related to two senior notes, lease obligations, and construction and other loans.
  • Following approval of the Company's Normal Course Issuer Bid on March 4, 2024, Pan American repurchased, for cancellation, approximately 1.7 million shares at an average price of $14.16 per share for total consideration of $24.3 million (of which $2.8 million was payable as at March 31, 2024).
  • A cash dividend of $0.10 per common share with respect to Q1 2024 was declared on May 8, 2024, payable on or about June 3, 2024, to holders of record of Pan American’s common shares as of the close of markets on May 21, 2024. In March 2024, the Company paid cash dividends totaling $36.5 million. The dividends are eligible dividends for Canadian income tax purposes.

Q1 2024 Project Updates:

  • At the Timmins mine, Pan American invested $2.8 million on project capital related to the construction of the paste plant project and its associated infrastructure, which is expected to provide an engineered backfill that will enhance orebody extraction and mine stability. The project is on schedule and is expected to be commissioned in Q3 2024.

Pan American agrees to sell La Arena

On May 1, 2024, the Company announced that it has agreed to sell the La Arena gold mine as well as the La Arena II project in Peru, to Jinteng (Singapore) Mining Pte. Ltd., a subsidiary of Zijin Mining Group Co., Ltd. (collectively, "Zijin"). Under the terms of the agreement, at closing Zijin will pay $245 million in cash and will grant Pan American a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project. Additionally, upon commencement of commercial production from the La Arena II project, the agreement provides for an additional payment from Zijin of $50 million in cash. The closing of the transaction is subject to customary conditions and receipt of regulatory approvals. The Company expects the transaction to be completed in the third quarter of 2024.



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