Pan American Silver (PAAS) Q2 2024 earnings summary

Executive summary

• Record Q2 2024 revenue of $686.3M and cash flow before working capital changes of $203.3M, with free cash flow of $102.1M, driven by cost performance below expected ranges for both silver and gold segments.

• Adjusted earnings reached $40M ($0.11/share), while net loss was $21.4M ($0.06/share loss), impacted by $93.1M income tax and $26.7M NRV inventory expense.

• Cash and short-term investments increased to $369M, with liquidity of $1.1B and a cash balance of $337.2M at June 30, 2024.

• Silver production of 4.57M oz and gold production of 220.4k oz, both below guidance due to ventilation and weather issues.

• La Colorada ventilation infrastructure completed on schedule, improving mine conditions and expected to boost production in H2 2024.

Financial highlights

• Record revenues and cash flow achieved in Q2 2024, with revenue at $686.3M.

• All-in Sustaining Costs (AISC) for silver segment: $18.12/oz (excluding $0.95/oz NRV adjustment); gold segment: $1,465/oz (excluding $119/oz NRV adjustment).

• Cash and short-term investments rose by $37.2M to $369M; net debt declined to $472.3M.

• Total available liquidity of $1,119M, with total debt at $809.5M.

• Dividend of $0.10/share paid; share buybacks ongoing under NCIB.

Outlook and guidance

• 2024 operating outlook for production, cash costs, AISC, and capex maintained; annual silver production expected at low end of guidance.

• Silver and gold production expected to be more heavily weighted to Q4 2024.

• Ongoing capital projects at Jacobina, La Colorada, Huaron, and Timmins.

• Sale of La Arena expected to close in Q3 2024.

• Anticipates increased free cash flow from back-half-weighted production.