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Pan American Silver Reports Rise In 1Q Profit

Kitco News

(Kitco News) - Pan American Silver Corp. (Nasdaq, TSX: PAAS),the world’s second-largest primary silver producer, late Wednesday reported that its first-quarter profit rose on a combination of higher revenues and lower costs.

Net earnings were $48.2 million, or 31 cents per share, up sharply from $20 million, or 13 cents, in the first quarter of 2017. The January-March results included an $8 million gain on the sale of the Minera Aquiline Argentina SA, which owns the Calcatreu project in Argentina.

Excluding special items, adjusted earnings were $30.7 million, or 20 cents per share. This is up from $9 million, or 6 cents, in the year-ago period.

Pan American listed $207 million in revenue, up from $198.7 million a year ago. The average realized price of silver fell to $16.78 from $17.44, but the average gold price climbed to $1,333 from $1,219.

"Higher revenues and lower production and royalty costs resulted in $55.1 million of mine operating earnings in the first quarter of 2018, up 68% from the comparable 2017 period,” said Michael Steinmann, president and chief executive officer. He characterized the company’s operating performance as “strong,” noting that Dolores silver production was up 25% year-on-year.

Company-wide silver production was 6.1 million ounces, down slightly from 6.2 million in the year-ago quarter. However, gold production rose to 46,200 ounces from 37,700 ounces. January-March zinc, lead and copper production were 14,700 tonnes, 5,200 tonnes, and 3,000 tonnes, respectively.

All-in sustaining costs per silver ounce sold were $6.98, while cash costs per ounce, after by-product credits, were $1.18. Pan American said cash costs were the lowest in a decade, reflecting increased throughput, higher by-product credits, and lower treatment and refining charges.

The company maintained full-year guidance of 25 million to 26.5 million ounces of silver production at cash costs of $3.60 to $4.60 per ounce and AISCSOS of $9.30 to $10.80. Projected gold output is 175,000 to 185,000 ounces.
The board of directors approved a cash dividend of $0.035 per common share, payable around June 4 to shareholders of record as of the close on May 22.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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