(Kitco News) - Pan American Silver (NASDAQ:PAAS, TSX: PAAS) today reported Q3 2022 silver production of 4.5 million ounces (Q3 2021: 4.8 million ounces) and gold production of 128.8 thousand ounces (Q3 2021: 142.6 thousand ounces).
In Q3 2022, the company also produced 8.9 thousand tonnes of zinc (Q3 2021: 12.7 thousand tonnes), 4.4 thousand tonnes of lead (Q3 2021: 4.2 thousand tonnes) and 0.9 thousand tonnes of copper (Q3 2021: 2.1 thousand tones).
PAAS also reported net loss of $71.2 million ($0.34 basic loss per share) in Q3 2022 (Q3 2021: net earnings of $20.2 million).
The company said that its quarterly net earnings were impacted by $15.1 million in net realizable value inventory adjustments, primarily at Dolores; $12.6 million in investment losses on its short-term investments; and mine closure severance provisions of $9.4 million recorded for Manantial Espejo.
Importantly, based on YTD results and the expected results for the remainder of the year, the company reaffirmed the 2022 original operating outlook for gold production.
However, PAAS noted it is revising its estimate for full-year 2022 silver production to be between 18.0 and 18.5 million ounces from the 19.0 to 20.5 million ounces provided in the 2022 original operating outlook.
The revision is largely due to lower production at Dolores and mine sequencing at La Colorada during the second half of 2022 into lower silver grade ore zones, it said.
The company also reaffirmed the 2022 original operating outlook for silver segment cash costs and AISC.
"However, we are continuing to assess the adverse impact supply chain disruptions and market distortions are having on the company's input costs, which could result in silver segment costs being marginally above the high-end of the range in our 2022 original operating outlook," PAAS noted in a statement.
"Our Q3 results reflect the industry-wide challenge of softening precious metal prices combined with inflationary cost pressures," commented President and CEO Michael Steinmann.
"On November 4, 2022, we announced a proposed acquisition of Yamana Gold by Pan American and Agnico Eagle. This accretive and transformational transaction would increase our silver production by approximately 50% and double our gold production through the addition of long-life, low-cost assets in Latin America, our core operating region. These assets generate strong cash flow, which would further strengthen our financial position and help establish an exciting future for growth and value creation for our stakeholders," he added.
PAAS 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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