Off The Wire
Pan American Silver temporarily suspends operations at Mexican mines
(Kitco News) - Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAAS) is suspending operations at two mines in Mexico as a result of the world’s war against the COVID-19 pandemic and is also voluntarily scaling back its Timmins operation in Canada, the company announced Thursday.
The La Colorada and Dolores mines in Mexico will be suspended in response to the Mexican Ministry of Health’s executive order to halt all non-essential activities until April 30, the company said. Pan American also said it will voluntarily reduce throughput by 10% to 20% at Timmins in order to allow workers to maintain an adequate physical distance.
The company said it currently has no confirmed cases of COVID-19 at any of its operations. But with a number of mines already shuttered and uncertainty about the future, Pan American cannot yet quantify the ultimate impact on its 2020 operating guidance but will update this when practical, officials said.
In the meantime, Pan American deferred some capital expenditures and exploration spending. Senior management has agreed to a salary reduction until the situation normalizes, including a 20% cut for the executive management team, the company said.
"We are carefully monitoring new developments regarding the pandemic, implementing the preventative measures recommended by health authorities and adapting our operations to government or company-led directives,” said Michael Steinmann, president and chief executive officer.
The company previously announced temporary suspensions of normal operations at mines in Peru, Argentina and Bolivia in order to comply with national quarantine rules. Quarantine periods have been extended to April 12 in Peru, April 13 in Argentina and April 15 in Bolivia.
Pan American said the company is “in a strong financial position” to manage the crisis, with cash and cash equivalents of $120.6 million at the end of 2019. The company also has a credit facility of $500 million that matures in early 2023. As of the end of last year, $275 million was drawn down, of which $15 million was repaid in early 2020, Pan American said.
Pan American is the world’s second-largest primary silver producer.