VANCOUVER, BC, May 11, 2022
/PRNewswire/ - Pan American Silver Corp. (NASDAQ: PAAS)
(TSX: PAAS) ("Pan American" or the "Company") today reported
unaudited results for the quarter ended March 31, 2022 ("Q1
2022").
"Pan American reported strong financial performance in the
quarter, enabling us to declare a dividend of $0.12 per common share for Q1, in line with the
new dividend policy announced in February
2022," said Michael
Steinmann, President and Chief Executive Officer. "As we
indicated in our February 23, 2022
news release, our operations experienced high levels of workforce
absenteeism in January and early February due to the Omicron
variant of COVID-19. Workforce deployment is now back to more
normal levels, and we are maintaining our guidance for 2022 with
production weighted to the second half of the year."
Consolidated Q1 2022 Highlights:
- Silver production of 4.6 million ounces and gold production of
131.0 thousand ounces.
- Revenue of $439.9 million
included inventory draw downs of 531.6 thousand ounces of silver
and 17.6 thousand ounces of gold.
- Net earnings of $76.8 million
($0.36 basic income per share).
Adjusted earnings were $32.0 million
($0.15 basic adjusted income per
share), with the most significant adjustment being the exclusion of
the $44.6 million one-time gain for
Pan American's investment in Maverix Metals Inc. ("Maverix").
- Operations generated $68.8
million of cash flow, net of $58.3
million in tax payments.
- Silver Segment Cash Costs and All-in Sustaining Costs ("AISC")
per silver ounce were $10.23 and
$13.41, respectively. Excluding Net
Realizable Value ("NRV") inventory adjustments, Silver Segment AISC
was $13.08 per ounce.
- Gold Segment Cash Costs and AISC per gold ounce were
$1,069 and $1,502, respectively. Excluding NRV inventory
adjustments, Gold Segment AISC was $1,409 per ounce.
- Completed a quarterly-record 25,924 metres drilled on the La
Colorada Skarn project, advanced pre-sinking of the concrete lined
ventilation shaft and began commissioning of the refrigeration
plant. See the news release issued on May 9,
2022, for further details on the recent drill results.
- Management maintains its guidance for 2022 production, costs
and capital expenditures. Production is expected to be weighted to
the second half of 2022, reflecting the impact on production from
reduced workforce deployment levels in Q1 2022 due to the Omicron
variant and mine sequencing. See the "2022 Guidance" section of
this news release for further details, and the Company's
Management's Discussion and Analysis for the three months ended
March 31, 2022.
- As at March 31, 2022, Pan
American had working capital of $620.7
million, inclusive of cash and short-term investment
balances of $326.3 million; a
long-term investment in Maverix with a market value of $124.7 million; and $500.0
million available under our sustainability-linked credit
facility. Total debt of $47.0 million
was related to lease liabilities and construction loans.
- A cash dividend of $0.12 per
common share has been declared, payable on or about June 3, 2022, to holders of record of Pan
American's common shares as of the close on May 24, 2022. The dividend is comprised of a base
dividend of $0.10 per common share
and a variable dividend of $0.02 per
common share. On February 23, 2022,
Pan American introduced a dividend policy that provides for a base
dividend plus a supplemental dividend amount tied to our net cash
balance. The dividends are eligible dividends for Canadian income
tax purposes.
CONSOLIDATED RESULTS
|
Three months
ended
March 31, 2022
|
Twelve months
ended
Dec. 31, 2021
|
Weighted average shares
during period (millions)
|
210.5
|
210.3
|
Shares outstanding end
of period (millions)
|
210.5
|
210.5
|
|
|
|
|
Three months
ended
March 31,
|
|
2022
|
2021
|
FINANCIAL
|
|
|
Revenue
|
$
439,888
|
$
368,099
|
Mine operating
earnings
|
$
66,755
|
$
89,964
|
Net income
(loss)
|
$
76,831
|
$
(7,562)
|
Basic income
(loss) per share(1)
|
$
0.36
|
$
(0.04)
|
Adjusted
income(2)
|
$
31,977
|
$
37,433
|
Basic adjusted
income per share(1)
|
$
0.15
|
$
0.18
|
Net cash generated from
operating activities
|
$
68,758
|
$
29,850
|
Net cash generated from
operating activities before changes in working
capital(2)
|
$
83,816
|
$
77,248
|
Sustaining capital
expenditures(2)
|
$
55,957
|
$
45,210
|
Non-sustaining
capital expenditures(2)
|
$
9,765
|
$
5,743
|
Cash dividend per
share
|
$
0.12
|
$
0.07
|
PRODUCTION
|
|
|
Silver (thousand
ounces)
|
4,619
|
4,583
|
Gold (thousand
ounces)
|
131.0
|
137.6
|
Zinc (thousand
tonnes)
|
10.2
|
13.1
|
Lead (thousand
tonnes)
|
4.7
|
5.0
|
Copper (thousand
tonnes)
|
1.8
|
2.1
|
CASH
COSTS(2) ($/ounce)
|
|
|
Silver
Segment
|
10.23
|
12.30
|
Gold Segment
|
1,069
|
846
|
AISC(2)
($/ounce)
|
|
|
Silver
Segment
|
13.41
|
16.99
|
Gold Segment
|
1,502
|
1,058
|
AVERAGE REALIZED
PRICES(3)
|
|
|
Silver
($/ounce)
|
24.03
|
26.41
|
Gold
($/ounce)
|
1,880
|
1,788
|
Zinc
($/tonne)
|
3,792
|
2,756
|
Lead
($/tonne)
|
2,341
|
2,036
|
Copper
($/tonne)
|
9,767
|
8,515
|
(1)
|
Per share amounts are
based on basic weighted average common shares.
|
(2)
|
Non-GAAP measure;
please refer to the "Alternative Performance (non-GAAP) Measures"
section of this news release for further information on these
measures.
|
(3)
|
Metal prices stated are
inclusive of final settlement adjustments on concentrate
sales.
|
Cash Costs, AISC, adjusted earnings, basic adjusted earnings per
share, sustaining and non-sustaining capital, working capital,
total debt and net cash are not generally accepted accounting
principle ("non-GAAP") financial measures. Please refer to the
"Alternative Performance (non-GAAP) Measures" section of this news
release for further information on these measures. This news
release should be read in conjunction with Pan American's unaudited
Condensed Interim Consolidated Financial Statements and our
Management's Discussion and Analysis for the three months ended
March 31, 2022. This material is available on Pan American's
website at panamericansilver.com, on SEDAR
at www.sedar.com and on EDGAR at www.sec.gov.
2022 GUIDANCE
There are no changes to the guidance for 2022 provided on
February 23, 2022, as detailed below.
We are currently experiencing higher than expected overall
inflationary pressures, particularly for diesel and certain
consumables, as well as disruptions in the supply chain. Management
is monitoring this situation and will adjust its cost estimates if
required.
These estimates are forward-looking statements and information
that are subject to the cautionary note associated with
forward-looking statements and information at the end of this news
release.
Annual Production
Silver – Moz
|
19.0 - 20.5
|
Gold – koz
|
550.0 -
605.0
|
Zinc – kt
|
35.0 - 40.0
|
Lead – kt
|
15.0 - 17.0
|
Copper – kt
|
5.5 - 6.5
|
Cash Costs and AISC
|
Cash
Costs(1)(2)
($ per
ounce)
|
AISC(1)(2)
($ per
ounce)
|
Silver Segment
Total
|
10.70 -
12.20
|
14.50 -
16.00
|
Gold Segment
Total
|
970 - 1,070
|
1,240 -
1,365
|
(1)
|
Cash Costs and AISC are
non-GAAP measures. Please refer to the "Alternative Performance
(non-GAAP) Measures" section of this news release for further
information on these measures.
|
(2)
|
The Cash Costs and AISC
forecasts assume average metal prices of $22.50/oz for silver,
$1,750/oz for gold, $3,000/tonne ($1.36/lb) for zinc, $2,200/tonne
($1.00/lb) for lead, and $9,200/tonne ($4.17/lb) for copper; and
average annual exchange rates relative to 1 USD of 20.00 for the
Mexican peso ("MXN"), 4.10 for the Peruvian sol ("PEN"), 122.17 for
the Argentine peso ("ARS"), 7.00 for the Bolivian boliviano
("BOB"), and $1.25 for the Canadian dollar ("CAD").
|
Capital Expenditures
|
(in millions of
USD)
|
Sustaining
Capital(1)
|
200.0 -
210.0
|
Project
Capital
|
80.0 - 95.0
|
Total
Capital
|
280.0 -
305.0
|
(1)
|
Sustaining Capital
includes $24.0 million for forecast lease and other payments, which
include debt repayments on construction loan facilities classified
as "Debt" as per Note 17 of the Company's audited financial
statements for the year ended December 31, 2021. These facilities
are for constructions of pads and other infrastructure in which the
Company only makes cash payments upon completion of construction
activities and on a scheduled basis.
|
Conference Call and Webcast
Date:
|
May 12, 2022
|
Time:
|
11:00 am ET (8:00 am
PT)
|
Dial-in numbers:
|
1-800-319-4610
(toll-free in Canada and the U.S.)
|
|
+1-604-638-5340
(international participants)
|
Webcast:
|
panamericansilver.com
|
The live webcast, presentation slides and the Q1 2022 report will
be available at panamericansilver.com. An archive of the webcast
will also be available for three months.
About Pan American Silver
Pan American owns and operates silver and gold mines located in
Mexico, Peru, Canada,
Argentina and Bolivia. We also own the Escobal mine in
Guatemala that is currently not
operating. Pan American provides enhanced exposure to silver
through a large base of silver reserves and resources, as well as
major catalysts to grow silver production. We have a 28-year
history of operating in Latin
America, earning an industry-leading reputation for
sustainability performance, operational excellence and prudent
financial management. We are headquartered in Vancouver, B.C. and our shares trade on NASDAQ
and the Toronto Stock Exchange under the symbol "PAAS".
Learn more at panamericansilver.com.
Technical Information
Scientific and technical information contained in this news
release have been reviewed and approved by Martin Wafforn, P.Eng.,
Senior Vice President Technical Services and Process Optimization,
and Christopher Emerson, FAusIMM,
Vice President Business Development and Geology, each of whom are
Qualified Persons, as the term is defined in Canadian National
Instrument 43-101 - Standards of Disclosure for Mineral
Projects.
For additional information about Pan American's material mineral
properties, please refer to Pan American's Annual Information Form
dated February 23, 2022, filed at
www.sedar.com, or the Company's most recent Form 40-F filed with
the Securities and Exchange Commission.
Alternative Performance (Non-GAAP) Measures
In this news release, we refer to measures that are not
generally accepted accounting principle ("non-GAAP") financial
measures. These measures are widely used in the mining
industry as a benchmark for performance, but do not have a
standardized meaning as prescribed by IFRS as an indicator of
performance, and may differ from methods used by other companies
with similar descriptions. These non-GAAP financial measures
include:
- Cash Costs. Pan American's method of calculating cash costs may
differ from the methods used by other entities and, accordingly,
Pan American's Cash Costs may not be comparable to similarly titled
measures used by other entities. Investors are cautioned that Cash
Costs should not be construed as an alternative to production
costs, depreciation and amortization, and royalties determined in
accordance with IFRS as an indicator of performance.
- Adjusted earnings and basic adjusted earnings per share. Pan
American believes that these measures better reflect normalized
earnings as they eliminate items that in management's judgment are
subject to volatility as a result of factors, which are unrelated
to operations in the period, and/or relate to items that will
settle in future periods.
- All-in Sustaining Costs per silver or gold ounce sold, net of
by-product credits ("AISC"). Pan American has adopted AISC as a
measure of its consolidated operating performance and its ability
to generate cash from all operations collectively, and Pan American
believes it is a more comprehensive measure of the cost of
operating our consolidated business than traditional cash costs per
payable ounce, as it includes the cost of replacing ounces through
exploration, the cost of ongoing capital investments (sustaining
capital), general and administrative expenses, as well as other
items that affect Pan American's consolidated earnings and cash
flow.
- Total debt is calculated as the total current and non-current
portions of: long-term debt, finance lease liabilities and loans
payable. Total debt does not have any standardized meaning
prescribed by GAAP and is therefore unlikely to be comparable to
similar measures presented by other companies. Pan American and
certain investors use this information to evaluate the financial
debt leverage of Pan American.
- Net cash is calculated as cash and cash equivalents plus
short-term investments, other than equity securities less total
debt.
- Working capital is calculated as current assets less current
liabilities. Working capital does not have any standardized meaning
prescribed by GAAP and is therefore unlikely to be comparable to
similar measures presented by other companies. Pan American and
certain investors use this information to evaluate whether Pan
American is able to meet its current obligations using its current
assets.
- Total available liquidity is calculated as the sum of Cash and
cash equivalents, Short-term Investments, and the amount available
on the Credit Facility. Total available liquidity does not have any
standardized meaning prescribed by GAAP and is therefore unlikely
to be comparable to similar measures presented by other companies.
Pan American and certain investors use this information to evaluate
the liquid assets available to Pan American.
Readers should refer to the "Alternative Performance (non-GAAP)
Measures" section of Pan American's Management's Discussion and
Analysis for the period ended December 31, 2021, for a more
detailed discussion of these and other non-GAAP measures and their
calculation.
Cautionary Note Regarding Forward-Looking Statements and
Information
Certain of the statements and information in this news release
constitute "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
"forward-looking information" within the meaning of applicable
Canadian provincial securities laws. All statements, other than
statements of historical fact, are forward-looking statements or
information. Forward-looking statements or information in this news
release relate to, among other things: future financial or
operational performance, including our estimated production of
silver, gold and other metals forecasted for 2022, our estimated
Cash Costs and AISC, and our sustaining and project capital
expenditures in 2022; the anticipated timing for metals production;
the impact of inflationary pressures on our operations and
business, particularly for diesel and certain consumables, as well
as the impacts related to disruptions in the supply chain; future
anticipated prices for gold, silver and other metals and assumed
foreign exchange rates; expectations with respect to the future
anticipated impact of COVID-19 on our operations and the
assumptions that the impact of COVID-19, including the Omicron
variant, will be such that we will be able to maintain our
workforce at near normal levels in 2022; the ability to continue
making progress at any of our exploration projects, including the
Wetmore and Whitney projects, and the results of any exploration
programs undertaken; whether Pan American is able to maintain a
strong financial condition and have sufficient capital, or have
access to capital through our corporate sustainability-linked
credit facility or otherwise, to sustain our business and
operations; and the ability of Pan American to successfully
complete any capital projects, including, but not limited to, the
La Colorada Skarn project, the expected economic or operational
results derived from those projects, and the impacts of any such
projects on Pan American and Pan American's plans and expectations
for its properties and operations.
These forward-looking statements and information reflect Pan
American's current views with respect to future events and are
necessarily based upon a number of assumptions that, while
considered reasonable by Pan American, are inherently subject to
significant operational, business, economic and regulatory
uncertainties and contingencies. These assumptions include: the
world-wide economic and social impact of COVID-19 and the duration
and extent of the COVID-19 pandemic and related restrictions, and
the presence and impact of COVID-19 and COVID-19 related
restrictions on our workforce, suppliers and other essential
resources and what effect those impacts, if they change, would have
on our business; the effect that the COVID-19 pandemic may
have on our financial and operational results; the ability of Pan
American to continue with its operations, or to successfully
maintain our operations on care and maintenance, should the
situation related to COVID-19 not be as anticipated; continuation
of operations following shutdowns or reductions in production, our
ability to manage reduced operations efficiently and economically,
including to maintain necessary staffing; tonnage of ore to be
mined and processed; future anticipated prices for gold, silver and
other metals and assumed foreign exchange rates; the timing and
impact of planned capital expenditure projects at La Colorada and our other operations,
including anticipated sustaining, project, and exploration
expenditures; the ongoing impact and timing of the court-mandated
ILO 169 consultation process in Guatemala; ore grades and recoveries; prices
for silver, gold and base metals remaining as estimated; currency
exchange rates remaining as estimated; capital, decommissioning and
reclamation estimates; our mineral reserve and resource estimates
and the assumptions upon which they are based; prices for energy
inputs, labour, materials, supplies and services (including
transportation); no labour-related disruptions at any of our
operations; no unplanned delays or interruptions in scheduled
production; all necessary permits, licenses and regulatory
approvals for our operations are received in a timely manner; our
ability to secure and maintain title and ownership to properties
and the surface rights necessary for our operations; and our
ability to comply with environmental, health and safety laws. The
foregoing list of assumptions is not exhaustive.
These forward-looking statements and information reflect Pan
American's current views with respect to future events and are
necessarily based upon a number of assumptions that, while
considered reasonable by Pan American, are inherently subject to
significant operational, business, economic and regulatory
uncertainties and contingencies. These assumptions include: the
impact of inflation and disruptions to the global, regional and
local supply chains; the world-wide economic and social impact of
COVID-19 and the duration and extent of the COVID-19 pandemic and
related restrictions; the presence and impact of COVID-19 and
COVID-19 related restrictions on our workforce, suppliers and other
essential resources and what effect those impacts, if they change,
would have on our business; the effect that the COVID-19
pandemic may have on our financial and operational results; the
ability of Pan American to continue with its operations, or to
successfully maintain our operations on care and maintenance,
should the situation related to COVID-19 not be as anticipated;
continuation of operations following shutdowns or reductions in
production, if applicable, and our ability to manage reduced
operations efficiently and economically, including to maintain
necessary staffing; tonnage of ore to be mined and processed;
future anticipated prices for gold, silver and other metals and
assumed foreign exchange rates; the timing and impact of planned
capital expenditure projects at La
Colorada and our other operations, including anticipated
sustaining, project, and exploration expenditures; the ongoing
impact and timing of the court-mandated ILO 169 consultation
process in Guatemala; ore grades
and recoveries; prices for silver, gold and base metals remaining
as estimated; currency exchange rates remaining as estimated;
capital, decommissioning and reclamation estimates; our mineral
reserve and resource estimates and the assumptions upon which they
are based; prices for energy inputs, labour, materials, supplies
and services (including transportation); no labour-related
disruptions at any of our operations; no unplanned delays or
interruptions in scheduled production; all necessary permits,
licenses and regulatory approvals for our operations are received
in a timely manner; our ability to secure and maintain title and
ownership to properties and the surface rights necessary for our
operations; and our ability to comply with environmental, health
and safety laws. The foregoing list of assumptions is not
exhaustive.
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SOURCE Pan American Silver Corp.