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Pan American Silver reports production in line with guidance, posts net loss in 2022

Kitco News

(Kitco News) - Pan American Silver (NASDAQ: PAAS) (TSX: PAAS) yesterday reported that its silver production was 18.5 million ounces in 2022, down 4% compared to 2021 (19.2 million ounces) and within the revised guidance range provided on November 9, 2022.

The company’s gold production was 552.5 thousand ounces in 2022, down 5% compared to 2021 (579.3 thousand ounces) and within the original guidance range provided on February 23, 2022.

The company also reported revenue of $1.5 billion in 2022 (2021 – revenue of $1.6 billion) and net loss of $340.1 million, or $1.62 basic loss per share (2021 – net earnings of $98.6 million). Adjusted earnings were $17.9 million, or $0.09 basic adjusted earnings per share for 2022 (2021 – adjusted earnings of $161.8 million).

PAAS said that a cash dividend of $0.10 per common share has been declared, payable on or about March 17, 2023, to holders of record of Pan American's common shares as of the close on March 6, 2023.

President and CEO Michael Steinmann commented, "As expected, our 2022 production was back-end loaded with strong output in Q4, led by Shahuindo and La Arena. Our 2022 silver production was at the top of the revised range provided in November, while gold production was in line with our original operating outlook.

“World-wide inflationary pressures, and supply chain shortages and delays impacted production costs across our operations. Revenue in Q4 was reduced by approximately $45 million to $50 million from a build-up of finished goods inventory due to the timing of sales at the end of December. Additionally, the build-up of finished good inventories of zinc also contributed to higher costs due to the reduction in by-product credits."

"In January, shareholders of both Pan American and Yamana overwhelmingly approved the arrangement for Pan American to acquire Yamana and its Latin American Assets. Transaction related costs of $157.3 million were expensed in Q4 2022, and are accounted for in our earnings and cash flow statements for the period, while the remainder of Transaction closing costs are expected to be recorded in Q1 2023. Following the completion of the Transaction, expected in Q1 2023, Pan American will be a markedly different company. The integration of Yamana's assets further strengthens and diversifies our portfolio. We see tremendous opportunity to optimize our expanded base of operations in Latin America to capture synergies, increase cash flow generation and focus on high-value growth projects," he added.

Pan American owns and operates silver and gold mines located in Mexico, Peru, Canada, Argentina and Bolivia. The company also owns the Escobal mine in Guatemala that is currently not operating.

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