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(Kitco News) - Pan American Silver (NYSE: PAAS) (TSX: PAAS) today reported its Q2 2023 silver production of 6.02 million ounces (Q2 2022: 4.54 million ounces) and record gold production of 248.2 thousand ounces (Q2 2022: 128.3 thousand ounces).
Compared to Q1 2023, the company’s silver production was up 55% and gold production was up 102%.
In a press release, the company said its quarterly silver production was slightly above management's outlook for Q2 2023 while gold production was at the high end of the quarterly outlook.
The company’s revenue was $639.9 million, up 64% compared with Q1 2023, reflecting the expanded operating base following the Yamana transaction, which was closed on March 31, 2023.
Pan American reported net loss of $47.4 million ($0.13 basic loss per share) in Q2 2023 (Q2 2022: net loss of $173.6 million), which reflects non-cash accounting impacts, including a net of tax impairment charge of $33.3 million related to the sale of the company's 92.3% interest in the Morococha mine, and $26.1 million net of tax fair value adjustments on finished goods inventories related to the Yamana transaction accounting.
The company’s adjusted earnings were $14.7 million or $0.04 adjusted earnings per share (Q2 2022: adjusted loss of $6.5 million), which exclude the impairment charge and the fair value adjustment. Cash flow from operations was $117.0 million, net of $50.5 million in tax payments.
The company also declared a cash dividend of $0.10 per common share with respect to Q2 2023.
Pan American reaffirmed its 2023 operating outlook for production of silver, gold, base metals, cash costs and all-in sustaining costs, and sustaining and project capital expenditures.
Silver production is estimated to be between 21 million and 23 million ounces and gold production between 870 thousand to 970 thousand ounces in 2023.
Commenting on the results, President and CEO Michael Steinmann said, "Our Q2 2023 results show the significant enhancement in the scale and quality of our portfolio following the strategic acquisition of Yamana. Production is up 55% for silver and 102% for gold compared with the prior quarter, while the addition of three new low-cost producers provided tangible benefits to the Company's cost structure.
"Revenue of $639.9 million reflects the step change in our operating base, and drove a 151% increase in operating cash flow before working capital changes compared with Q1 2023. These results deliver on the benefits we had expected from the Yamana transaction, and have allowed us to repay a net $55.4 million of debt and distribute $36.4 million in dividends in the past quarter. We are also on track to meet our target of realizing $40 million to $60 million in synergies through the transaction."
Pan American Silver is a leading producer of precious metals in the Americas, operating silver and gold mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile and Brazil. The company also owns the Escobal mine in Guatemala that is currently not operating and holds interests in exploration and development projects.
