Latest news with #MichaelSteinmann
Yahoo
13-05-2025
- Business
- Yahoo
Pan American Silver to acquire MAG Silver in $2.1bn deal
Pan American Silver has signed a definitive agreement with MAG Silver to acquire all its issued and outstanding common shares via a court-approved plan of arrangement for a total consideration of approximately $2.1bn. Under the transaction, MAG shareholders will receive $500m in cash from Pan American's $923m cash balance and 0.755 Pan American shares for each MAG share. The offer represents a 21–27% premium over the closing and 20-day volume-weighted average price of MAG's shares as of 9 May 2025. Post-transaction, Pan American is expected to issue an aggregate of 60 million common shares to MAG shareholders, while MAG shareholders will hold roughly 14% of Pan American's fully diluted shares, gaining exposure to a more diversified and growth-focused silver and gold producer. The acquisition will integrate MAG's 44% interest in the high-grade Juanicipio silver mine in Zacatecas, Mexico, into Pan American's portfolio. Fresnillo owns the remaining 56% stake in the Juanicipio joint venture. The mine is expected to produce between 14.7 million ounces (moz) and 16.7moz of silver in 2025. The transaction will also bolster Pan American's position as one of the world's leading silver producers and boost the company's free cash flow generation, while delivering significant exploration upside potential. Pan American president and CEO Michael Steinmann said: 'Our acquisition of MAG brings into Pan American's portfolio one of the best silver mines in the world. Juanicipio is a large-scale, high-grade, low-cost silver mine that will meaningfully increase Pan American's exposure to high margin silver ounces. 'Furthermore, we see future growth opportunities through the significant exploration potential at Juanicipio as well as MAG's Deer Trail and Larder properties. This strategic acquisition further solidifies Pan American as a leading Americas-focused silver producer.' For MAG shareholders, the deal offers de-risking benefits, financial strength, increased liquidity and expanded market presence. MAG's directors and executive officers have agreed to vote in favour of the deal, which is expected to close in the second half of 2025, subject to customary conditions and regulatory approvals. MAG president and CEO George Paspalas said: 'Through the acquisition of our interest by Pan American – a respected leader in the global precious metals industry – our shareholders will participate in an exciting future defined by operational excellence, substantial exploration potential and strong financial stewardship with significant portfolio exposure.' In October 2024, Unico Silver completed the acquisition of the Joaquin Silver District in Argentina from Pan American Silver. "Pan American Silver to acquire MAG Silver in $2.1bn deal" was originally created and published by Mining Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Yahoo
12-05-2025
- Business
- Yahoo
Pan American Acquires MAG For $2.1 Billion
Pan American Silver Corp. (NYSE:PAAS) and MAG Silver Corp. (AMEX:MAG) disclosed a definitive deal for Pan American to acquire MAG Silver's shares through a plan of arrangement. As per the deal, MAG shareholders will receive approximately $2.1 billion ($20.54 per MAG share based on PAAS's May 9, 2025 NYSE closing price) in a mix of $500 million cash and 0.755 PAAS shares per MAG share (subject to proration). This represents ~21% and ~27% premiums to MAG's May 9, 2025 NYSEAM closing price and 20-day VWAP, MAG shareholders will own ~14% of the enlarged, diversified Pan American, gaining exposure to a larger silver and gold producer. The acquisition significantly enhances Pan American's value by adding a 44% stake in Juanicipio, a premier, low-cost, high-grade silver mine in Mexico with substantial exploration potential, operated by Fresnillo. This is expected to add forecasted production of 6.5-7.3 Moz of silver to Pan American Silver in 2025 and 58 Moz proven and probable reserves, 19 Moz measured and indicated resources, and 35 Moz inferred resources. Notably, Juanicipio's high-margin ounces, with projected 2025 cash costs of ($1.00)-$1.00/oz and all-in sustaining costs of $6.00-$8.00/oz, are a logical fit within Pan American's Americas-focused silver portfolio. The MAG acquisition should significantly boost Pan American's 2025 free cash flow (+$98 million pro forma) and offer significant exploration upside (Juanicipio, Deer Trail, Larder), strategically deploying $500 million of PAAS's cash for increased silver exposure and growth. Michael Steinmann, President and CEO of Pan American, said, 'Juanicipio is a large-scale, high-grade, low-cost silver mine that will meaningfully increase Pan American's exposure to high-margin silver ounces. Furthermore, we see future growth opportunities through the significant exploration potential at Juanicipio as well as MAG's Deer Trail and Larder properties. This strategic acquisition further solidifies Pan American as a leading Americas-focused silver producer.' As of March 31, PAAS' cash and short-term investments stood at $923.0 million. Price Action: PAAS shares are down 7.24% to $25.24, while MAG shares are up 13% to $19.12 premarket at the last check on Monday. Image via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article Pan American Acquires MAG For $2.1 Billion originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Yahoo
12-05-2025
- Business
- Yahoo
Pan American Silver: A Bright Outlook
Pan American Silver (NYSE:PAAS) reported its first-quarter results on May 7, 2025. This article updates my Gurufocus article from April 15, 2024, in which I analyzed the fourth quarter of 2023. Warning! GuruFocus has detected 8 Warning Signs with PAAS. Pan American Silver is a reliable mining company specializing in gold and silver. It stands out as a strong option for savvy investors, though there are some general considerations to keep in mind, which will be discussed in this article. As a result, I have included Pan American Silver among my top recommendations for secure investments in gold and silver, alongside Newmont Corporation (NYSE:NEM), Barrick Gold (GOLD), Agnico Eagle Mines (NYSE:AEM), and Kinross Gold (NYSE:KGC). This article on Pan American Silver is the final piece in this selection. As previously mentioned, Pan American Silver is not a pure gold miner like the other four companies. Although silver production is significant, it is not the primary source of revenue. As shown in the chart below, silver accounts for only 21% of the total revenue in 1Q25. However, the company can generate much greater revenue from silver if it restarts its mine, Escobal, near San Rafael Las Flores in southern Guatemala. The mine began commercial production in January 2014 and operated until 2017, producing approximately 20 million ounces of silver annually. The mine has been suspended (on care and maintenance status) due to a ruling by Guatemala's Constitutional Court, which found that the Xinka Indigenous people were not properly consulted before its development. Unfortunately for Pan American Silver, the deadline for reopening the mine is not established until the Xinka community grants its approval, which remains elusive. The elevated arsenic levels in nearby water sources are the primary issue causing the Indigenous population to oppose the mine's reopening despite pressures and death threats. Here we are in May 2025, and nothing has changed. Therefore, I no longer have as much faith in Escobal reopening anytime soon. There is an inexpensive way to gamble for those confident in the mine's reopening. It is called the PAASF, or Pan American Silver Warrants, issued as part of the acquisition of Tahoe Resources Inc. If the mine reopens, you may hit the jackpot. The gold and silver production in 1Q25 was solid, driven by two significant recent acquisitions: Tahoe Resources in 2019 and large parts of Yamana Gold in March 2023. After an initial jump in 2Q22, production has been mainly constant until now, as shown in the graph below: Michael Steinmann, President and Chief Executive Officer, said: We are on track to achieve our guidance for 2025, with production levels expected to increase over the coming quarters from a back-end loaded production profile. We remain focused on progressing our initiatives to further increase shareholder value, including the optimization study for Jacobina, development of the La Colorada Skarn, and the consultation process for Escobal. Below is the graph detailing production per mine in 1Q25: Note: Pan American Silver completed the sale of its interest in La Arena S.A. on December 2, costs (AISC) are also kept below $1,500 per ounce and have decreased slightly over the last three quarters, which is encouraging. However, inflation pressure may rise as a result of the ongoing tariff war between the United States and China. According to its first quarter 2025 results, the company owns 10 producing mines in the Americas and declared a mineral reserve of 468 million ounces of silver and 6.70 million ounces of gold. Reserves decreased significantly year over year. Source: PAAS 4Q24 presentation. In 2024, Pan American Silver recorded its highest-ever yearly revenue of $2.819 billion, a 21.71% increase over 2023. The graph below shows the progress in metal production and revenue for the last six years. Gold production accounted for roughly 75% of the total revenue in 2024. Silver accounted for approximately 21% of the revenue, while the rest was generated from other metals, including zinc, lead, and copper. 2025 may be even better. Even though oil stocks face the same technical challengessuch as growing production costs, operational issues, and debt levelsthe correlation is noticeably stronger than oil stocks. This may be because oil is merely a commodity and offers no protection from a currency collapse. Since gold and silver stocks are not truly independent from the global economy and do not provide the same degree of fundamental security (refuge), investors clearly do not view PAAS and other gold stocks at the same level as the metal. Furthermore, Pan American Silver's silver revenue is roughly 21%, which weakens PAAS's appeal. In 2025, silver vastly underperformed gold (please look at the chart above). Furthermore, according to John Hathaway of Sprott Asset Management, there is doubt regarding the long-term viability of the gold price, which pushes investors to be cautious and focus on more physical gold investments. Finally, the dividend paid by PAAS is quite small. At a yield of 1.57%, the quarterly dividend is $0.10 per share. Nevertheless, a 25% tax deduction will be applied since PAAS is a Canadian stock, resulting in a 1.16% net yield. On the plus side, depending on PAAS's net cash position, the yield could increase to about 2.1% net if variable dividends start to kick in - they could add $0.04 to $0.32 annually, depending on PAAS's net cash position. The company bought back 909,012 shares in 1Q25 at a cost of $22 per share, which is quite low considering 362.41 million shares outstanding diluted in 1Q25. In March 2025, the company announced the renewal of its Normal Course Issuer Bid (NCIB) to repurchase up to 18,232,990 shares, representing approximately 5% of its issued and outstanding shares. In 1Q25, Pan American reported approximately $118.6 million in net cash, down from $178.5 million in 4Q24. The company had $923.0 million in cash, cash equivalents, and marketable securities, while its long-term debt, including current liabilities, totaled $884.4 million. Overall, the total available liquidity amounted to $1.637 billion. The company's debt situation is now strong, and it successfully demonstrated a net cash position during the last reported quarter. First, the prices of gold and silver have surged to new highs, as shown in the chart below, which illustrates the prices of gold and silver realized by PAAS. This trend will continue in 2Q25, with an average now around $3,200-$3,400 per troy ounce. Second, higher metal prices have led to an increase in free cash flow. In the first quarter of 2025, the company reported a free cash flow of $106.7 million. With cash flow from operations at $174.80 million and capital expenditures (CapEx) at $67.90 million. For 2Q25, I anticipate a free cash flow of about $235 million. The business is thriving, and the stock price should reflect this positive financial situation. However, this is not guaranteed, and PAAS shareholders have often faced disappointment. Note: The chart has been adjusted for dividends. Pan American Silver forms an ascending channel pattern, with resistance at $28.5 and support at $24.5. At 48, the relative strength index (RSI) shows that things are moving in a bearish direction, which could accelerate if gold starts to retrace. An ascending channel can be viewed as bullish; however, it may result in either a bullish or bearish breakout as a continuation pattern. Volatility is extreme, with the Trump administration's decision-making bordering on the irrational. Unpredictability is draining confidence, leading to quick and profound stock fluctuations. You can capitalize on this situation by adopting the right strategy and avoiding victimization. Gold is now just above $3,400, and it could go even higher. However, if tariff negotiations start to take center stage, I see gold retracing below $3,100. An important consideration here is the possibility of a gray swan brought on by the Trump administration's unpredictable actions on the world economy. I suggest you click this link to read my article about it. When or if the stock price rises above $28-$28.75, it might be prudent to sell some shares. Since the chart shows that the downside can be severe and swift, 20% to 30% is reasonable, assuming you have a short-term gain. Importantly, avoid selling at a loss under any circumstances. Please look at the chart above for more insight. Selling part of your position using the LIFO (Last In, First Out) method is essential, particularly if the stock experiences a false bullish/bearish breakout followed by a quick retracement. On the other hand, I advise beginning to accumulate once more below the 50MA at about $24.65, all the way down to $23$22.50 (200 MA). Note: It is important to update the technical analysis chart on a regular basis. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
12-05-2025
- Business
- Business Wire
Pan American Silver Announces Agreement to Acquire MAG Silver Corp.
VANCOUVER, British Columbia--(BUSINESS WIRE)-- Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) (" Pan American") and MAG Silver Corp. (NYSEAM:MAG) (TSX:MAG) (" MAG") are pleased to announce that they have entered into a definitive agreement whereby Pan American will acquire all of the issued and outstanding common shares of MAG pursuant to a plan of arrangement (the " Transaction"). MAG is a tier-one primary silver mining company through its 44% joint venture interest in the large-scale, high-grade Juanicipio mine, operated by Fresnillo plc (" Fresnillo"), who holds the remaining 56% interest in the Juanicipio joint venture. Under the terms of the Transaction, MAG shareholders will receive total consideration of approximately $2.1 billion representing $20.54 per MAG share, based on the closing price of Pan American's common shares on the New York Stock Exchange (" NYSE") on May 9, 2025. Consideration will be comprised of a mix of cash totaling $500 million and 0.755 Pan American shares per MAG share, subject to proration as detailed below. The consideration represents premiums of approximately 21% and 27%, respectively, on a prorated basis to the closing price and the 20-day volume weighted average price (" VWAP") of MAG's common shares on the NYSE American (" NYSEAM") ending May 9, 2025. Following completion of the Transaction, existing MAG shareholders will own approximately 14% of Pan American shares on a fully diluted basis, benefiting from participation in a larger, diversified, and growth-oriented silver and gold producer. Michael Steinmann, President and CEO of Pan American, commented: ' Our acquisition of MAG brings into Pan American's portfolio one of the best silver mines in the world. Juanicipio is a large-scale, high-grade, low-cost silver mine that will meaningfully increase Pan American's exposure to high margin silver ounces. Furthermore, we see future growth opportunities through the significant exploration potential at Juanicipio as well as MAG's Deer Trail and Larder properties. This strategic acquisition further solidifies Pan American as a leading Americas-focused silver producer. We would like to thank the Fresnillo and the Juanicipio management teams for the constructive interactions and impressive site visit. Together, we bring many decades of operator experience in Mexico and Latin America to the Joint Venture and we are looking forward to a collaborative future and value generation for all shareholders involved.' George Paspalas, President and CEO of MAG, commented, 'This transaction represents a compelling opportunity for our shareholders, providing an immediate premium and meaningful exposure to Pan American's world-class assets and proven growth strategy. We are proud of what we've accomplished at MAG, particularly our partnership with Fresnillo which has created extraordinary value at the exceptional Juanicipio mine. Through the acquisition of our interest by Pan American - a respected leader in the global precious metals industry - our shareholders will participate in an exciting future defined by operational excellence, substantial exploration potential, and strong financial stewardship with significant portfolio exposure.' BENEFITS TO MAG SHAREHOLDERS The Transaction creates significant value and delivers multiple benefits to MAG's shareholders: Attractive immediate premium: Immediate value uplift of approximately 21% and 27%, respectively, on a prorated basis to the closing price and the 20-day VWAP of MAG's common shares on the NYSEAM ending May 9, 2025. Diversified exposure and growth opportunities: Exposure to Pan American's diversified portfolio of ten silver and gold mines across seven countries and a proven track record of success in exploration, project-development and mining operations. Portfolio participation: Enlarged growth pipeline with exposure to Pan American's La Colorada Skarn project in Mexico and the potential reopening of Pan American's 100%-owned Escobal mine, one of the world's best silver mines with past production of 20 Moz of silver per year. Continued Exposure to Juanicipio: The Transaction provides MAG shareholders with the opportunity to maintain exposure to the interest in Juanicipio, which continues to demonstrate strong operational performance and resource potential. Derisking: Significantly de-risks MAG shareholders' exposure by converting a concentrated interest in Juanicipio into equity ownership of Pan American, a diversified, leading silver producer with meaningful, long-term upside. Financial strength and robust returns: Equity participation in a well-capitalized, value driven, large-cap silver producer known for returning capital to shareholders, with over $1.0 billion returned to shareholders via dividends and buybacks since 2010. Increased liquidity and market presence: Greater scale, lower risk and peer leading cash flows driving improved trading liquidity on U.S. and Canadian markets. Attractive consideration: An elective tax rollover for taxable MAG shareholders resident in Canada who receive Pan American shares. Low Execution Risk: The Transaction would not require review and approvals under the Investment Canada Act. Pan American shareholder approval of the Transaction will not be required. STRATEGIC RATIONALE AND BENEFITS TO PAN AMERICAN SHAREHOLDERS The Transaction creates significant value and delivers multiple benefits to Pan American's shareholders: Adds 44% ownership interest in Juanicipio, one of the best silver mines globally: Juanicipio is a large-scale, high-grade, low-cost silver mine located in Zacatecas, Mexico, with significant exploration upside and operated by Fresnillo, a world class precious metals producer. Strengthens Pan American's position as one of the world's premier silver producers: Juanicipio is forecasted to produce between 14.7 Moz and 16.7 Moz of silver in 2025 (6.5 Moz to 7.3 Moz on a 44% basis). 1 Further solidifies Pan American's position as holding the largest silver reserves and resources amongst silver mining companies: Adds 58 Moz of silver to Pan American's proven and probable mineral reserves, 19 Moz of silver to Pan American's measured and indicated mineral resources, and 35 Moz of silver to Pan American's inferred mineral resources. 2 Contributes high-margin ounces: Juanicipio's cash costs and all-in sustaining costs are forecasted to range between ($1.00) to $1.00 and $6.00 to $8.00 per silver ounce sold, respectively, for 2025. 1 Highly logical fit with Pan American's silver dominant Americas-based portfolio: Leverages Pan American's experience operating in the Americas for over 30 years. Significantly bolsters Pan American's free cash flow generation: Juanicipio is expected to generate free cash flow of approximately $200 million in 2025 ($98 million on a pro forma basis). 3,4 Provides significant exploration upside potential: Exposure to growth opportunities through exploration at Juanicipio (only 10% explored) and the acquisition of 100% of the rights to the Deer Trail and Larder exploration projects as part of the Transaction. Investing in growth: Deploys $500M of Pan American's record $923M cash and investments balance 5 in a measured and strategic manner to enhance silver exposure and provide future growth. 1 As per the news release issued by MAG on March 24, 2025. 2 As per Fresnillo's Mineral Resources and Ore Reserve Statements as at June 30, 2024. Figures are calculated from Fresnillo's Mineral resources as of June 30, 2024 to display mineral resources exclusive of mineral reserves. Figures reflect MAG's attributable 44% ownership. 3 Free cash flow is a non-GAAP measure. For further information regarding such measure please refer to each companies' respective separate public disclosure. MAG defines free cash flow as cash flow from operating activities less cash used in investing activities and sustaining lease payments. Pan American defines free cash flow as cash flow from operating activities less sustaining capital expenditures. 4 Figures are based on street consensus estimate for 2025; mid-point of 2025 expansionary capex guidance added back to Juanicipio free cash flow to align with Pan American definition of free cash flow. 5 As per Pan American's Management's Discussion and Analysis dated May 7, 2025. Expand TRANSACTION SUMMARY Under the terms of the Transaction, MAG shareholders will be able to elect to receive the consideration as either (i) $20.54 in cash per MAG share or (ii) 0.755 common shares of Pan American per MAG share, or a combination of cash and shares, subject to proration such that the aggregate consideration paid to all MAG shareholders consists of $500 million in cash and the remaining consideration paid in Pan American Shares. At closing, Pan American expects to issue an aggregate of approximately 60 million common shares to MAG shareholders, and following completion of the Transaction, existing MAG shareholders will own approximately 14% of the issued and outstanding common shares of Pan American on a fully diluted basis. The Transaction will be carried out by way of a court-approved Plan of Arrangement under the Business Corporations Act (British Columbia) and will require approval by 66 2/3% of the votes cast by MAG shareholders at a special meeting expected to be held in July 2025. All directors and executive officers of MAG have entered into voting support agreements with Pan American pursuant to which they have agreed, subject to the terms of such agreements, to vote their MAG shares in favour of the Transaction. The Transaction is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions, including clearance under Mexican anti-trust laws, and approval of the listing of the Pan American common shares to be issued under the Transaction on both the Toronto Stock Exchange and the NYSE. Full details of the Transaction will be included in the management information circular of MAG, expected to be mailed to its shareholders in June 2025. None of the securities to be issued pursuant to the Transaction have been or will be registered under the United States Securities Act of 1933, as amended (the 'U.S. Securities Act'), or any state securities laws, and any securities issuable in the Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. RECOMMENDATIONS BY THE BOARD OF DIRECTORS AND SPECIAL COMMITTEE The definitive agreement and the Transaction have been unanimously approved by the board of directors of each of Pan American and MAG, and in the case of MAG, on the unanimous recommendation of a special committee of independent directors of MAG. MAG's board of directors unanimously recommends that MAG shareholders vote in favour of the Transaction. BMO Capital Markets and GenCap Mining Advisory Ltd. have each provided a fairness opinion to the Board of Directors of MAG and Raymond James Ltd. has provided a fairness opinion to the MAG Special Committee, each stating that, as of the date of such opinion, and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, that the consideration to be received by MAG shareholders pursuant to the Transaction is fair, from a financial point of view, to MAG shareholders. ADVISORS AND COUNSEL National Bank Financial acted as exclusive financial advisor to Pan American. Borden Ladner Gervais LLP (BLG) acted as Canadian legal advisors to Pan American. BMO Capital Markets and GenCap Mining Advisory Ltd. acted as co-financial advisors to MAG. Blake, Cassels & Graydon LLP acted as MAG's Canadian legal advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as MAG's U.S. legal advisors. Raymond James Ltd. provided an independent fairness opinion to the MAG Special Committee and the MAG Board of Directors. CONFERENCE CALL DETAILS Pan American and MAG will host a joint conference call and webcast to discuss the Transaction. Date: Time: 10:00 am ET (7:00 am PT) Webcast: Conference Call: Participants can register for the conference call at: [ Upon registration, you will receive the dial-in details and a unique PIN to access the call. This process will bypass the live operator and avoid the queue. Registration will remain open until the end of the live conference call. Those without internet access or who prefer to speak with an operator may dial: Canada & USA Toll-Free: 1-833-752-3507 (toll-free in Canada and the U.S.) Canada & USA Toll-Free: 1-647-846-7282 (International Participants) Participants should dial-in at least 10 minutes prior to the start of the call and request to join the Pan American Silver call. A live webcast of the call will be accessible at: and on MAG's website at A webcast archive will be available approximately one hour after the end of the event and will be accessible for three months through the same link as the live event. The telephone audio replay will be available for seven days following the end of the event. Qualified Person: All scientific or technical information related to MAG Silver in this press release is based upon information prepared by or under the supervision of, or has been approved by Gary Methven, who is a 'Qualified Person' for purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects ('National Instrument 43-101' or 'NI 43-101'). Mr. Methven is not independent as he is Vice President, Technical Services of MAG. About Pan American Pan American is a leading producer of silver and gold in the Americas, operating mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile and Argentina. We also own the Escobal mine in Guatemala that is currently not operating, and we hold interests in exploration and development projects. We have been operating in the Americas for over three decades, 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 the New York Stock Exchange and the Toronto Stock Exchange under the symbol "PAAS". Learn more at Follow us on LinkedIn. About MAG MAG is a growth-oriented Canadian mining and exploration company focused on advancing high-grade, district scale precious metals projects in the Americas. MAG is a top-tier primary silver mining company through its (44%) joint venture interest in the 4,000 tonnes per day Juanicipio Mine, operated by Fresnillo (56%). The mine is located in the Fresnillo Silver Trend in Mexico, the world's premier silver mining camp, where in addition to mining and processing operations, an expanded exploration program is in place targeting multiple highly prospective targets. MAG is also executing multi-phase exploration programs at the 100% earn-in Deer Trail Project in Utah and the 100% owned Larder Project, located in the historically prolific Abitibi region of Canada. Juanicipio Silver Mineral Reserve and Resource Details as at June 30, 2024 (100% basis) Notes: 1 JORC Code was used for reporting of Ore Reserves. 2 See Fresnillo's Ore Reserve Statement and Mineral Resources Statement as at June 30, 2024 for details as to cut-off grades, assumptions, costs, NSR values, dilution, recovery factors and exchange rates. 3 Mineral Resources are reported inclusive of Ore Reserves. Expand Cautionary Note Regarding Forward-Looking Statements and Information Certain of the statements and information in this news release, including any information relating to Pan American's future oriented financial information, 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 2025, future returns of capital to shareholders, forecasted ranges for cash costs and all-in sustaining costs, and our sustaining and project capital expenditures in 2025; availability of Navidad as an undeveloped silver deposit; our ability to complete or advance the optimization study for Jacobina, the development of the La Colorada Skarn, or the consultation process for Escobal, and any anticipated benefits to shareholder value or financial or operational performance that may be derived therefrom; expectations regarding the ILO 169 consultation process with respect to Escobal; and Pan American's plans and expectations for its properties and operations; the timing, satisfaction of closing conditions, consummation and terms of the Transaction, including the consideration thereunder and benefits derived therefrom; and the timing and occurrence of a joint conference call discussing the Transaction; the operation of the Juanicipio mine and exploration of its surrounding regions, the Juanicipio mine's generation of free cash flow, and any anticipated benefits to shareholder value or financial or operational performance that may be derived therefrom. Future-oriented financial information and financial outlook are presented in this release for the purpose of assisting investors and others in understanding certain key elements of the Pan American's financial results and business plan, as well as the objectives, strategic priorities and business outlook of Pan American, and in obtaining a better understanding of Pan American's anticipated operating environment. Readers are cautioned that such future-oriented financial information or financial outlook may not be appropriate for other purposes. 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; 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, 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; capital, decommissioning and reclamation estimates; our mineral reserve and mineral 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 mineral properties and the surface rights necessary for our operations; whether Pan American is able to maintain a strong financial condition and have sufficient capital, or have access to capital through our corporate Credit Facility or otherwise, to sustain our business and operations; and our ability to comply with environmental, health and safety laws. The foregoing list of assumptions is not exhaustive. Pan American cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in this news release and Pan American has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: the duration and effect of local and world-wide inflationary pressures and the potential for economic recessions; fluctuations in silver, gold and base metal prices; fluctuations in prices for energy inputs, labour, materials, supplies and services (including transportation); fluctuations in currency markets (such as the PEN, MXN, ARS, BOB, GTQ, CAD, CLP and BRL versus the USD); operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom Pan American does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with, and claims by, local communities and indigenous populations; our ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in laws, regulations and government practices in the jurisdictions where we operate, including environmental, export and import laws and regulations; changes in national and local government, legislation, taxation, controls or regulations and political, legal or economic developments in Canada, the United States, Mexico, Peru, Argentina, Bolivia, Guatemala, Chile, Brazil or other countries where Pan American may carry on business, including legal restrictions relating to mining, risks relating to expropriation and risks relating to the constitutional court-mandated ILO 169 consultation process in Guatemala; unanticipated or excessive tax assessments or reassessments in our operating jurisdictions; diminishing quantities or grades of mineral reserves as properties are mined; increased competition in the mining industry for equipment and qualified personnel; and those factors identified under the caption "Risks Related to Pan American's Business" in Pan American's most recent form 40-F and Annual Information Form filed with the United States Securities and Exchange Commission and Canadian provincial securities regulatory authorities, respectively. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Investors are cautioned against attributing undue certainty or reliance on forward-looking statements or information. Forward-looking statements and information are designed to help readers understand management's current views of our near- and longer-term prospects and may not be appropriate for other purposes. The Company does not intend, nor does it assume any obligation, to update or revise forward-looking statements or information to reflect changes in assumptions or in circumstances or any other events affecting such statements or information, other than as required by applicable law.
National Post
07-05-2025
- Business
- National Post
Pan American Silver Reports Unaudited First Quarter 2025 Results
Article content Article content All amounts expressed in U.S. dollars unless otherwise indicated. Unaudited tabular amounts are in millions of U.S. dollars and thousands of shares, options, and warrants except per share amounts and per ounce amounts, unless otherwise noted. Article content VANCOUVER, British Columbia — Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) ('Pan American' or the 'Company') reports unaudited results for the quarter ended March 31, 2025 ('Q1 2025'). Article content 'Pan American has had a strong start to 2025, delivering another quarter of solid operating results. Lower costs and higher metal prices resulted in a record $250.8 million of mine operating earnings and $112.6 million in free cash flow,' said Michael Steinmann, President and Chief Executive Officer. 'We are on track to achieve our guidance for 2025, with production levels expected to increase over the coming quarters from a back-end loaded production profile. We remain focused on progressing our initiatives to further increase shareholder value, including the optimization study for Jacobina, development of the La Colorada Skarn, and the consultation process for Escobal.' Article content The following highlights for Q1 2025 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. Article content Consolidated Q1 2025 Results: Article content Silver production of 5.0 million ounces. Gold production of 182.2 thousand ounces. Revenue of $773.2 million. Net earnings of $169.3 million, or $0.47 basic earnings per share. Adjusted earnings of $153.0 million, or $0.42 adjusted earnings per share. Cash flow from operations before non-cash working capital changes of $240.1 million, net of $95.1 million in cash taxes paid ($174.8 million after changes in non-cash working capital). Silver Segment All-in Sustaining Costs ('AISC') (1) per silver ounce of $13.94. Gold Segment AISC (2), excluding net realizable value ('NRV') inventory adjustments, per gold ounce of $1,485. Cash and short-term investments increased by $35.7 million from December 31, 2024 to $923.0 million. As at March 31, 2025, the Company had working capital of $1,161.8 million and $750.0 million available under its undrawn credit facility ('Credit Facility'). Total debt of $804.4 million is primarily related to two senior notes, as well as certain lease liabilities and construction loans payable. The Company maintains its 2025 Operating Outlook, as previously provided in its Management's Discussion & Analysis ('MD&A') dated February 19, 2025. See the '2025 Operating Outlook' section of this news release for further detail. A cash dividend of $0.10 per common share with respect to Q1 2025 was declared on May 7, 2025, payable on or about June 2, 2025, to holders of record of Pan American's common shares as of the close of markets on May 20, 2025. During Q1 2025, the Company paid cash dividends to its shareholders totaling $36.2 million. The dividends are eligible dividends for Canadian income tax purposes. The Company repurchased for cancellation 909,012 common shares in Q1 2025 at an average price of $22.00 per share for a total consideration of $20.0 million under its Normal Course Issuer Bid, which was renewed on March 6, 2025. Article content (1) Silver Segment AISC is calculated net of credits for realized revenues from all metals other than silver and is calculated per ounce of silver sold. Article content (2) Gold Segment AISC is calculated net of credits for realized revenues from all metals other than gold and is calculated per ounce of gold sold. Article content Q1 2025 Project Updates: Article content At the La Colorada mine, project capital of $4.9 million was directed largely to the current vein mining operation for exploration and mine equipment leases to access, mine, and expand mineral resource extensions in the eastern and southeastern higher-grade Candelaria zone. With respect to the La Colorada Skarn, project capital of $3.0 million was largely for exploration and in-fill drilling and advancing engineering work. Pan American is currently discussing potential partnerships for development of the project. At Huaron, $3.0 million of project capital was related to residual accounts payable settlements for the drystack tailings storage facility, which was completed in the fourth quarter of 2024, and is now fully commissioned and operating. At Jacobina, project capital of $4.8 million was allocated to mine and plant optimization studies aimed at maximizing long-term economic performance. At Timmins, project capital of $2.9 million was related to underground development advances to provide access for exploration drilling of adjacent prospective deposits. At Escobal, Pan American had four working meetings with the Guatemalan government during Q1 2025 as part of the ILO 169 consultation process. Currently, there is no date for the completion of the consultation process or the potential restart of operations at Escobal. Article content Three months ended March 31, 2025 Three months ended March 31, 2024 Weighted average shares during period 362,408 364,486 Shares outstanding end of period 362,190 362,940 Three months ended M arch 31, 2025 2024 FINANCIAL Revenue $ 773.2 $ 601.4 Cost of Sales (1) $ 522.4 $ 530.4 Mine operating earnings $ 250.8 $ 71.0 Net earnings (loss) $ 169.3 $ (30.8 ) Basic earnings (loss) per share (2) $ 0.47 $ (0.08 ) Adjusted earnings (3) $ 153.0 $ 4.7 Basic adjusted earnings per share (2)(3) $ 0.42 $ 0.01 Net cash generated from operating activities $ 174.8 $ 61.1 Net cash generated from operating activities before changes in working capital (3) $ 240.1 $ 127.1 Sustaining capital expenditures (3) $ 62.2 $ 65.7 Project capital expenditures (3)(4) $ 18.6 $ 30.9 Cash dividend paid per share $ 0.10 $ 0.10 PRODUCTION Silver (thousand ounces) 5,003 5,009 Gold (thousand ounces) 182.2 222.9 Zinc (thousand tonnes) 14.0 9.8 Lead (thousand tonnes) 6.7 4.6 Copper (thousand tonnes) 0.6 1.7 AISC (3) ($/ounce) Silver Segment 13.94 16.63 Gold Segment 1,485 1,499 AVERAGE REALIZED PRICES (5) Silver ($/ounce) 31.25 22.61 Gold ($/ounce) 2,868 2,078 Zinc ($/tonne) 2,819 2,424 Lead ($/tonne) 1,974 2,063 Copper ($/tonne) 9,287 8,373 Article content Q1 2025 OPERATING PERFORMANCE Silver Production (thousand ounces) Gold Production (thousand ounces) AISC ($ per ounce) (1) Silver Segment La Colorada (Mexico) 1,389 1.2 19.72 Cerro Moro (Argentina) 545 20.6 (4.40) Huaron (Peru) 951 — 13.09 San Vicente (Bolivia) (2) 643 — 19.70 Total Silver Segment (3) 3,528 21.7 13.94 Gold Segment Jacobina (Brazil) 1 45.1 1,243 El Peñon (Chile) 945 28.2 1,214 Timmins (Canada) 4 28.5 2,124 Shahuindo (Peru) 65 29.5 1,440 Minera Florida (Chile) 112 15.2 2,445 Dolores (Mexico) 349 14.0 569 Total Gold Segment (3) 1,476 160.5 1,485 Total Consolidated (3) 5,003 182.2 Article content (1) Non-GAAP measure; please refer to the 'Alternative Performance (non-GAAP) Measures' section of this news release for further information on these measures. The AISC are excluding NRV inventory adjustments. (2) San Vicente data represents Pan American's 95.0% interest in the mine's production. (3) Totals may not add due to rounding. Article content 2025 OPERATING OUTLOOK Article content The Company reaffirms its 2025 Operating Outlook for annual production, AISC, and capital expenditures, as summarized in the table below. Please see Pan American's MD&A dated February 19, 2025, for further detail on the Company's 2025 Operating Outlook, including the quarterly outlook for production and AISC. Please also refer to the Cautionary Note Regarding Forward-Looking Statements and Information at the end of this news release. Article content (1) AISC is a non-GAAP measure. Please refer to the 'Alternative Performance (Non-GAAP) Measures' section of this news release for further information on these measures. The AISC forecast assumes average metal prices of $30.00/oz for silver, $2,650/oz for gold, $3,000/tonne ($1.36/lb) for zinc, $2,000/tonne ($0.91/lb) for lead, and $9,500/tonne ($4.31/lb) for copper; and average annual exchange rates relative to 1 USD of 20.00 for the Mexican peso ('MXN'), 3.75 for the Peruvian sol ('PEN'), 1,177.00 for the Argentine peso ('ARS'), 7.00 for the Bolivian boliviano ('BOB'), 1.38 for the Canadian dollar ('CAD'), 950.00 for the Chilean peso ('CLP') and 5.75 for the Brazilian real ('BRL'). Article content AISC, adjusted earnings, basic adjusted earnings per share, sustaining and project capital, free cash flow, working capital, and total debt are non-GAAP financial measures. Please refer to the 'Alternative Performance (non-GAAP) Measures' section of this news release for further information on these measures. Article content This news release should be read in conjunction with Pan American's Unaudited Condensed Interim Consolidated Financial Statements and our MD&A for the three months ended March 31, 2025. This material is available on Pan American's website at on SEDAR+ at and on EDGAR at Article content Date: May 8, 2025 Article content Upon registration, you will receive the dial-in details and a unique PIN to access the call. This process will bypass the live operator and avoid the queue. Registration will remain open until the end of the live conference call. Those without internet access or who prefer to speak with an operator may dial: Article content 1-833-752-3507 (toll-free in Canada and the U.S.) 1-647-846-7282 (International Participants) Article content Visit to access the webcast, presentation slides and the MD&A for the period ended March 31, 2025. An archive of the webcast will also be available for three months at Article content About Pan American Article content Pan American is a leading producer of silver and gold in the Americas, operating mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile and Argentina. We also own the Escobal mine in Guatemala that is currently not operating, and we hold interests in exploration and development projects. We have been operating in the Americas for over three decades, 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 the New York Stock Exchange and the Toronto Stock Exchange under the symbol 'PAAS'. Article content In this news release, we refer to measures that are 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: Article content 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 ('AISC') per silver or gold ounce sold, net of by-product credits. Pan American believes that AISC, calculated net of by-products, is a comprehensive measure of the full cost of operating our consolidated business, given it includes the cost of replacing silver and gold ounces through exploration, the cost of ongoing capital investments at current operations ('sustaining capital'), as well as other items that affect the Company's consolidated cash flow. AISC excludes capital investments that are expected to increase production levels or mine life beyond those contemplated in the base case life of mine plan ('project capital'). Total debt is calculated as the total current and non-current portions of: debt, including senior notes and amounts drawn on the Credit Facility, and lease obligations. 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. 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. Project capital relates to expenditures at the La Colorada mine, the La Colorada Skarn, and the Huaron, Timmins and Jacobina mines. Project 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 capital investments that are directed at increasing production levels or mine life beyond those contemplated in the base case life of mine plan. Free cash flow is calculated as net cash generated from operating activities less sustaining capital expenditures. Free cash flow 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 profitability of Pan American and identify capital that may be available for investment or return to shareholders. Article content Readers should refer to the 'Alternative Performance (non-GAAP) Measures' section of Pan American's Q1 2025 MD&A for a more detailed discussion of these and other non-GAAP measures and their calculation. Article content 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 2025, our estimated AISC, and our sustaining and project capital expenditures in 2025; the anticipated dividend payment date of June 2, 2025; our ability to complete or advance the optimization study for Jacobina, the development of the La Colorada Skarn, or the consultation process for Escobal, and any anticipated benefits to shareholder value or financial or operational performance that may be derived therefrom; expectations regarding the ILO 169 consultation process with respect to Escobal; and Pan American's plans and expectations for its properties and operations. Article content 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; 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, 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; capital, decommissioning and reclamation estimates; our mineral reserve and mineral 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 mineral properties and the surface rights necessary for our operations; whether Pan American is able to maintain a strong financial condition and have sufficient capital, or have access to capital through our corporate Credit Facility or otherwise, to sustain our business and operations; and our ability to comply with environmental, health and safety laws. The foregoing list of assumptions is not exhaustive. Article content Pan American cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in this news release and Pan American has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: the duration and effect of local and world-wide inflationary pressures and the potential for economic recessions; fluctuations in silver, gold and base metal prices; fluctuations in prices for energy inputs, labour, materials, supplies and services (including transportation); fluctuations in currency markets (such as the PEN, MXN, ARS, BOB, GTQ, CAD, CLP and BRL versus the USD); operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom Pan American does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with, and claims by, local communities and indigenous populations; our ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in laws, regulations and government practices in the jurisdictions where we operate, including environmental, export and import laws and regulations; changes in national and local government, legislation, taxation, controls or regulations and political, legal or economic developments in Canada, the United States, Mexico, Peru, Argentina, Bolivia, Guatemala, Chile, Brazil or other countries where Pan American may carry on business, including legal restrictions relating to mining, risks relating to expropriation and risks relating to the constitutional court-mandated ILO 169 consultation process in Guatemala; unanticipated or excessive tax assessments or reassessments in our operating jurisdictions; diminishing quantities or grades of mineral reserves as properties are mined; increased competition in the mining industry for equipment and qualified personnel; and those factors identified under the caption 'Risks Related to Pan American's Business' in Pan American's most recent form 40-F and Annual Information Form filed with the United States Securities and Exchange Commission and Canadian provincial securities regulatory authorities, respectively. Article content Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Investors are cautioned against attributing undue certainty or reliance on forward-looking statements or information. Forward-looking statements and information are designed to help readers understand management's current views of our near- and longer-term prospects and may not be appropriate for other purposes. The Company does not intend, nor does it assume any obligation, to update or revise forward-looking statements or information to reflect changes in assumptions or in circumstances or any other events affecting such statements or information, other than as required by applicable law. Article content Article content Article content Article content Article content Contacts Article content Article content
