Pan American Silver Announces $79.3 million in Net Cash Generated From Operating Activities in Q4 2017
Increases Dividend by 40%
All financial figures are in U.S. dollars unless otherwise indicated.
VANCOUVER, Feb. 20, 2018 /CNW/ - Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAAS) ("Pan American", or the "Company") today reported unaudited results for the fourth quarter ("Q4 2017") and year-ended December 31, 2017. These results are preliminary and could change based on final audited results.
"We generated $224.6 million in cash flow from operations in 2017. La Colorada, Morococha, Huaron and Dolores had record annual operating free cash flow," said Michael Steinmann, President and Chief Executive Officer of the Company. "Our cash and short-term investments increased by about $41 million in the quarter, resulting in a balance of $227.5 million at year-end. Operations at Morococha have been performing particularly well, which has led to a reversal of the impairment we booked at that mine in 2015 and made a significant impact on earnings in Q4 2017."
Added Mr. Steinmann: "With a strong financial position, expansions completed at our largest mines, and operations generating strong cash flow, the Board of Directors today declared a 40% increase in the dividend."
Highlights for the three and twelve-month periods ended December 31, 2017:
- Silver production in Q4 2017 was 6.58 million ounces, which is 4% higher than production in the fourth quarter of 2016 ("Q4 2016"), primarily reflecting increases at Dolores, La Colorada and Morococha. Annual silver production of 25.0 million ounces was similar to the 25.4 million produced in 2016, as increases at La Colorada and Dolores offset the expected decline from the conclusion of Alamo Dorado operations.
- Gold production was 43.7 thousand ounces in Q4 2017 compared with 43.9 thousand ounces in Q4 2016. Annual 2017 gold production was 160.0 thousand ounces compared with 183.9 thousand ounces in 2016. The decrease was due to lower ore grades at Manantial Espejo and the conclusion of Alamo Dorado operations.
- Zinc production of 14.7 thousand tonnes in Q4 2017 was up 11% compared with Q4 2016. Annual 2017 zinc production of 55.3 thousand tonnes was 7% more than in 2016. The increases primarily reflect the expansion of the La Colorada operations.
- Lead production of 5.4 thousand tonnes in Q4 2017 was 2% lower than in Q4 2016. Annual 2017 production of 21.5 thousand tonnes was up 6% from 2016, driven by La Colorada.
- Copper production of 3.0 thousand tonnes in Q4 2017 and annual 2017 production of 13.4 thousand tonnes were 3% and 7% lower, respectively, than the corresponding 2016 periods, largely due to mine sequencing at Morococha.
- Revenue of $226.0 million in Q4 2017 was up 19% from Q4 2016. The increase was largely attributable to higher sales volumes for all metals, except copper, and higher prices for all metals, except silver. Positive settlement adjustments on concentrate shipments also contributed to the increase. Annual 2017 revenue was $816.8 million, up 5% from 2016, due to higher base metal prices and lower treatment and refining charges.
- Consolidated All-In Sustaining Costs per Silver Ounce Sold ("AISCSOS") were $10.86 in Q4 2017 compared with $10.38 in Q4 2016. Annual 2017 AISCSOS of $10.79 was $0.71 under the low end of management's original forecast of $11.50 to $12.90 and within the revised forecast of $10.50 to $11.50.
- Consolidated cash costs per payable ounce of silver, net of by-product credits ("Cash Costs") were $3.18 in Q4 2017 compared with $6.66 in Q4 2016, reflecting higher productivity, increased by-product credits and improved concentrate treatment terms. Annual 2017 Cash Costs of $4.55 were 28% lower than 2016, largely due to increased throughput at La Colorada, higher by-product credits, and lower treatment and refining charges.
- Net cash generated from operating activities was up 74% to $79.3 million in Q4 2017 compared with $45.7 million in Q4 2016, reflecting higher revenues, positive working capital changes and lower cash taxes. Annual 2017 operating cash flows of $224.6 million were 5% higher than the $214.8 million generated in 2016, driven primarily by increased revenues and positive working capital changes, partially offset by higher cash taxes.
- Net earnings were $49.7 million ($0.32 basic earnings per share) in Q4 2017 compared with $22.3 million ($0.14 basic earnings per share) in Q4 2016. Q4 2017 net earnings include a $60.2 million reversal of the 2015 Morococha mine impairment. Annual 2017 net earnings were $123.5 million ($0.79 basic earnings per share) compared with $101.8 million ($0.66 basic earnings per share) in 2016.
- Adjusted earnings were $19.2 million ($0.13 basic adjusted earnings per share) compared with $19.0 million ($0.12 basic adjusted earnings per share) in Q4 2016. Higher revenues in Q4 2017 were offset by increases in production costs, including increased negative non-cash net realizable value inventory adjustments, as well as higher depreciation and income tax expense. Annual 2017 adjusted earnings were $77.7 million ($0.51 basic adjusted earnings per share) compared with $86.6 million ($0.57 basic adjusted earnings per share) in 2016.
- Liquidity and working capital position. During 2017, debt reduced by $32.7 million (including capital leases), resulting in year end debt of $10.6 million, mostly related to finance lease liabilities. At December 31, 2017, the Company had cash and short-term investment balances of $227.5 million, working capital of $410.8 million and $300.0 million available under its revolving credit facility.
- Capital expenditures totaled $42.3 million in Q4 2017 compared with $56.5 million in Q4 2016. Annual 2017 capital expenditures were $145.8 million, including approximately $61.4 million of project capital, compared with $198.5 million in 2016. The decrease was largely due to the completion of the La Colorada expansion, partially offset by a $4.9 million year-over-year increase in sustaining capital.
- Dolores expansion. In 2017, we completed construction of the pulp agglomeration plant with commissioning activities fully underway at year-end. We also advanced the underground mine development and reached the planned daily stacking rate of 20,000 tonnes.
- The La Colorada expansion achieved full design processing rates of 1,800 tonnes per day by mid 2017.
- COSE and Joaquin projects. We obtained authorizations to initiate construction on the two mining projects located within ore trucking distance from our Manantial Espejo mine. At COSE, we have prepared the necessary project infrastructure and advanced 148 metres on the underground decline.
- Pan American acquired a 12.1% interest in New Pacific Metals Corp. (approximately 16.44% fully diluted) for approximately $22.7 million in November 2017. The acquisition provides Pan American with exposure to the Silver Sand Project, a highly prospective exploration project located in the Potosí Department of Bolivia.
- A 40% increase in the quarterly cash dividend to $0.035 per common share, approximately $5.4 million in aggregate cash dividends, has been approved by the Board of Directors. The dividend will be payable on or about March 16, 2018, to holders of record of Pan American's common shares as of the close on March 5, 2018. Pan American's dividends are designated as eligible dividends for the purposes of the Income Tax Act (Canada). As is standard practice, the amounts and specific distribution dates of any future dividends will be evaluated and determined by the Board of Directors on an ongoing basis.
The foregoing contains measures that are not generally accepted accounting principle ("non-GAAP") financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures.
CONSOLIDATED FINANCIAL RESULTS
| Unaudited in thousands of U.S. Dollars, except per ounce and per share amounts | Three months ended | Year ended | ||
| 2017 | 2016 | 2017 | 2016 | |
| Revenue | 226,031 | 190,596 | 816,828 | 774,775 |
| Mine operating earnings | 43,285 | 48,956 | 168,760 | 198,879 |
| Net earnings for the period | 49,664 | 22,284 | 123,451 | 101,825 |
| Adjusted earnings for the period(1) | 19,219 | 18,965 | 77,705 | 86,600 |
| Net cash generated from operating activities | 79,291 | 45,668 | 224,559 | 214,804 |
| All-in sustaining cost per silver ounce sold(1) | 10.86 | 10.38 | 10.79 | 10.17 |
| Net earnings per share attributable to common shareholders (basic) | 0.32 | 0.14 | 0.79 | 0.66 |
| Adjusted earnings per share attributable to common shareholders (basic)(1) | 0.13 | 0.12 | 0.51 | 0.57 |
| (1) | Adjusted earnings and all-in sustaining costs per silver ounce sold are non-GAAP measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures. |
CONSOLIDATED OPERATIONAL RESULTS
| Three months ended December 31, 2017 | Three months ended December 31, 2016 | |||||
| Production | Cash | Production | Cash | |||
| Ag | Au | Ag | Au | |||
| La Colorada | 1.87 | 1.26 | 0.43 | 1.67 | 0.86 | 4.38 |
| Dolores | 1.26 | 31.22 | (3.93) | 0.90 | 28.83 | (5.93) |
| Alamo Dorado | 0.03 | 0.11 | 2.09 | 0.40 | 1.41 | 22.80 |
| Huaron | 0.95 | 0.19 | 2.08 | 0.94 | 0.20 | 4.54 |
| Morococha (2) | 0.72 | 0.82 | (7.42) | 0.58 | 0.43 | 5.52 |
| San Vicente (3) | 1.10 | 0.14 | 9.04 | 1.05 | n/a | 11.22 |
| Manantial Espejo | 0.65 | 9.98 | 26.52 | 0.78 | 12.21 | 14.61 |
| TOTAL | 6.58 | 43.71 | 3.18 | 6.31 | 43.94 | 6.66 |
| Year ended December 31, 2017 | Year ended December 31, 2016 | |||||
| Production | Cash | Production | Cash | |||
| Ag | Au | Ag | Au | |||
| La Colorada | 7.06 | 4.29 | 2.08 | 5.80 | 2.93 | 6.15 |
| Dolores | 4.23 | 103.02 | (1.65) | 3.84 | 102.76 | (1.08) |
| Alamo Dorado | 0.64 | 2.12 | 16.49 | 1.86 | 8.38 | 16.02 |
| Huaron | 3.68 | 1.15 | 1.35 | 3.81 | 0.81 | 5.79 |
| Morococha (2) | 2.63 | 3.53 | (5.34) | 2.54 | 2.14 | 4.21 |
| San Vicente (3) | 3.61 | 0.51 | 11.85 | 4.43 | n/a | 11.95 |
| Manantial Espejo | 3.12 | 45.34 | 18.25 | 3.14 | 66.89 | 4.28 |
| TOTAL | 24.98 | 159.96 | 4.55 | 25.42 | 183.92 | 6.29 |
| Totals may not add up due to rounding. | |
| (1) | Cash costs are a non-GAAP measure. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures. |
| (2) | Morococha data represents Pan American's 92.3% interest in the mine's production. |
| (3) | San Vicente data represents Pan American's 95.0% interest in the mine's production. |
By-Product Production
| Three months ended December 31, | Year ended December 31, | |||
| 2017 | 2016 | 2017 | 2016 | |
| Gold - ounces '000s ("koz") | 43.7 | 43.9 | 160.0 | 183.9 |
| Zinc - tonnes '000s ("kt") | 14.7 | 13.2 | 55.3 | 51.9 |
| Lead - kt | 5.4 | 5.5 | 21.5 | 20.2 |
| Copper - kt | 3.0 | 3.1 | 13.4 | 14.4 |
Average Realized Metal Prices
| Three months ended December 31, | Year ended December 31, | |||
| 2017 | 2016 | 2017 | 2016 | |
| Silver $/ounce | 16.65 | 17.65 | 16.99 | 17.35 |
| Gold $/ounce | 1,276 | 1,212 | 1,257 | 1,251 |
| Zinc $/tonne | 3,282 | 2,587 | 2,929 | 2,133 |
| Lead $/tonne | 2,472 | 2,178 | 2,351 | 1,892 |
| Copper $/tonne | 6,811 | 5,282 | 6,174 | 4,816 |
Capital Expenditures
| Annual Forecast(1) | Year ended December 31, | ||
| (in millions of USD) | 2017 | 2017 | 2016 |
| La Colorada | 10.5 – 11.5 | 13.3 | 9.9 |
| Dolores | 39.0 – 40.0 | 38.4 | 40.4 |
| Alamo Dorado | — | — | — |
| Huaron | 8.0 – 9.0 | 8.8 | 11.1 |
| Morococha | 9.0 – 10.0 | 12.5 | 10.3 |
| San Vicente | 12.0 – 13.0 | 8.1 | 4.9 |
| Manantial Espejo | 3.5 – 4.5 | 3.3 | 2.9 |
| Sustaining Capital Total(2) | 82.0 - 88.0 | 84.4 | 79.5 |
| La Colorada project capital | 6.5 – 7.5 | 6.9 | 52.9 |
| Dolores project capital | 51.5 – 54.5 | 49.9 | 66.1 |
| Joaquin and COSE projects(3) | 11.0 – 12.5 | 4.7 | — |
| Project Capital Total(2) | 69.0 - 74.5 | 61.4 | 119.0 |
| Consolidated Total | 151.0 – 162.5 | 145.8 | 198.5 |
| (1) | Forecast amount per 2016 annual MD&A dated March 22, 2017, except for Joaquin and COSE projects, which were initially forecast in the MD&A for the second quarter of 2017. |
| (2) | The sustaining capital total amounts capitalized in 2017 were $0.2 million more than the $84.2 million of 2017 sustaining capital cash outflows and project capital amounts capitalized in 2017 were $1.6 million less than the $63.0 million of 2017 project capital cash outflows; the capital cash outflows are included in the 2017 AISCSOS calculation, shown in the "Alternative Performance (non-GAAP) Measures" section of this news release, and are different from the capital amounts in the tables included in the "Individual Mine Operation Highlights" section of this news release. These differences are due to the timing difference between the cash payment of capital investments compared with the period in which investments are capitalized. |
| (3) | Total expenditures of $9.7 million were incurred in 2017 for the Joaquin and COSE projects, of which $5.0 million was expensed as part of 2017 exploration and project development expenses, and the remaining $4.7 million was capitalized. |
2018 GUIDANCE AND THREE-YEAR OUTLOOK
There have been no revisions to the outlook Pan American provided in its press release dated January 11, 2018 for the years 2018 to 2020 (the "Three-Year Outlook"), and as provided in the table below:
| 2018 Guidance | 2019 Outlook | 2020 Outlook | ||
| Production | ||||
| Silver (million ounces) | 25.0 - 26.5 | 27.7 - 29.7 | 30.5 - 33.0 | |
| Gold (thousand ounces) | 175 - 185 | 183 - 193 | 165 - 179 | |
| Zinc (thousand tonnes) | 60.0 - 62.0 | 55.5 - 59.5 | 60.5 - 64.5 | |
| Lead (thousand tonnes) | 21.0 - 22.0 | 21.0 - 23.0 | 23.0 - 26.0 | |
| Copper (thousand tonnes) | 12.0 - 12.5 | 10.5 - 12.5 | 11.5 - 13.5 | |
| Cash Costs(1)($/ounce) | 3.60 - 4.60 | 4.50 - 6.00 | 4.75 - 6.75 | |
| Sustaining capital ($ millions) | 100 - 105 | 100 - 110 | 75 - 90 | |
| AISCSOS(1) ($/ounce) | 9.30 - 10.80 | 9.50 - 11.50 | 8.50 - 11.00 | |
| (1) | Cash Costs and AISCSOS are non-GAAP measures. Please refer to the section titled "Alternative Performance (non-GAAP) Measures" at the end of this news release for further information on these measures. |
The following table provides the price and foreign exchange rate assumptions used to forecast total Cash Costs and AISCSOS in the Three-year Outlook:
| Years 2018 to 2020 | ||
| Metal prices | ||
| Silver ($/ounce) | 16.50 | |
| Gold ($/ounce) | 1,250 | |
| Zinc ($/tonne) | 3,100 | |
| Lead ($/tonne) | 2,350 | |
| Copper ($/tonne) | 6,500 | |
| Average annual exchange rates relative to 1 USD | ||
| Mexican peso | 18.50 | |
| Peruvian sol | 3.23 | |
| Argentine peso | 19.59 | |
| Bolivian boliviano | 7.00 | |
Technical information contained in this news release with respect to Pan American has been reviewed and approved by Martin Wafforn, P.Eng., Senior Vice President, Technical Services & Process Optimization, who is the Company's Qualified Person for the purposes of National Instrument 43-101. For additional information about the Company's material mineral properties, other than the Joaquin property, please refer to the Company's Annual Information Form dated March 22, 2017, filed at www.sedar.com. For further technical information relating to the development of the Joaquin project, please refer to the National Instrument 43-101 technical report entitled "Technical Report for the Joaquin Property, Santa Cruz, Argentina - Pre-feasibility Study", with an effective date of November 30, 2017, which is filed on SEDAR at www.sedar.com and available on the Company's website. For further technical information relating to the La Colorada and Dolores expansion projects, please refer to the National Instrument 43-101 technical reports entitled "Technical Report - Preliminary Economic Analysis for the Expansion of the La Colorada Mine, Zacatecas, Mexico," with an effective date of December 31, 2013, and "Technical Report for the Dolores Property, Chihuahua, Mexico", with an effective date of December 31, 2016, both of which are filed on SEDAR at www.sedar.com and available on the Company's website. The results of the preliminary economic assessments at La Colorada, Dolores and COSE are preliminary in nature, in that they include inferred mineral resources that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the assessment will be realized. Mineral resources that are not mineral reserves have no demonstrated economic viability.
2017 Annual Unaudited Results Conference Call and Webcast
| Date: | February 21, 2018 | |
| Time: | 11:00 am ET (8:00 am PT) | |
| Dial-in numbers: | 1-800-319-4610 (toll-free in Canada and the U.S.) | |
| +1-604-638-5340 (international participants) |
A live and archived webcast and presentation slides will be available on the Company's website at www.panamericansilver.com.
About Pan American Silver
Pan American Silver Corp. is one of the world's largest primary silver producers, providing investors with enhanced exposure to silver through low-cost operations. Founded in 1994, Pan American is recognized for its operating expertise, prudent financial management and commitment to responsible development. The Company is headquartered in Vancouver, B.C. and owns and operates six mines in Mexico, Peru, Argentina and Bolivia. Our shares trade on NASDAQ and the Toronto Stock Exchange under the symbol "PAAS".
For more information, visit: www.panamericansilver.com.
Alternative Performance (Non-GAAP) Measures
In this press release we refer to measures that are not generally accepted accounting principle ("non-GAAP") financial measures. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning as prescribed by IFRS as an indicator of performance, and may differ from methods used by other companies with similar descriptions. These non-GAAP financial measures include:
- Cash costs per payable ounce of silver, net of by-product credits ("cash costs"). The Company's method of calculating cash costs may differ from the methods used by other entities and, accordingly, the Company's cash costs may not be comparable to similarly titled measures used by other entities. Investors are cautioned that cash costs should not be construed as an alternative to production costs, depreciation and amortization, and royalties determined in accordance with IFRS as an indicator of performance.
- Adjusted earnings and adjusted earnings per share. The Company believes that these measures better reflect normalized earnings as they eliminate items that in management's judgment are subject to volatility as a result of factors which are unrelated to operations in the period, and/or relate to items that will settle in future periods.
- All-in sustaining costs per silver ounce sold ("AISCSOS"). The Company has adopted AISCSOS as a measure of its consolidated operating performance and its ability to generate cash from all operations collectively, and the Company believes it is a more comprehensive measure of the cost of operating our consolidated business than traditional cash costs per payable ounce, as it includes the cost of replacing ounces through exploration, the cost of ongoing capital investments (sustaining capital), general and administrative expenses, as well as other items that affect the Company's consolidated earnings and cash flow.
- Total debt is calculated as the total current and non-current portions of: long-term debt; finance lease liabilities; and loans payable. Total debt does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. The Company and certain investors use this information to evaluate the financial debt leverage of the Company.
- Operating free cash flow is calculated as net cash generated from operating activities less cash invested in sustaining capital. The Company believes the inclusion of sustaining capital investments better reflects total operating cash flows. Operating free cash flow does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies.
Readers should refer to the "Alternative Performance (non-GAAP) Measures" section following the Consolidated Statements of Cash Flows included in this news release for a more detailed discussion of these and other non-GAAP measures and their calculation.
Cautionary Note Regarding Forward-Looking Statements and Information
Certain of the statements and information in this news release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian provincial securities laws. All statements, other than statements of historical fact, are forward-looking statements or information. Forward-looking statements or information in this news release relate to, among other things: future financial or operational performance, including our estimated production of silver, gold and other metals in 2018 and beyond, our estimated Cash Costs and AISCSOS in 2018 and beyond, and our expectations with respect to future metal prices and exchange rates; the ability of the Company to successfully complete any capital investment programs and projects, including whether on time, or on or below budget, and the success, expected economic or operational results derived from those programs and projects, and the impacts of any such programs and projects on the Company, including with respect to production, associated operational efficiencies and economic returns; the election by the Company and its ability to successfully complete the acquisition of the COSE project; the realization of benefits from any transactions, including the Joaquin and COSE transactions, and the financial and operational impacts of any such transactions on the Company; and the approval or the amount of any future cash dividends.
These forward-looking statements and information reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include: tonnage of ore to be mined and processed; ore grades and recoveries; prices for silver, gold and base metals remaining as estimated; currency exchange rates remaining as estimated; capital, decommissioning and reclamation estimates; our mineral reserve and resource estimates and the assumptions upon which they are based; prices for energy inputs, labour, materials, supplies and services (including transportation); no labour-related disruptions at any of our operations; no unplanned delays or interruptions in scheduled production; all necessary permits, licenses and regulatory approvals for our operations are received in a timely manner; and our ability to comply with environmental, health and safety laws. The foregoing list of assumptions is not exhaustive.
The Company cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in this news release and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in silver, gold and base metal prices; fluctuations in prices for energy inputs, labour, materials, supplies and services (including transportation); fluctuations in currency markets (such as the Canadian dollar, Peruvian sol, Mexican peso, Argentine peso and Bolivian boliviano versus the U.S. dollar); operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with, and claims by, local communities and indigenous populations; our ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in laws, regulations and government practices in the jurisdictions where we operate, including environmental, export and import laws and regulations; legal restrictions relating to mining, including in Chubut, Argentina; risks relating to expropriation; diminishing quantities or grades of mineral reserves as properties are mined; increased competition in the mining industry for equipment and qualified personnel; and those factors identified under the caption "Risks Related to Pan American's Business" in the Company's most recent form 40-F and Annual Information Form filed with the United States Securities and Exchange Commission and Canadian provincial securities regulatory authorities, respectively. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Investors are cautioned against undue reliance on forward-looking statements or information. Forward-looking statements and information are designed to help readers understand management's current views of our near and longer term prospects and may not be appropriate for other purposes. The Company does not intend, nor does it assume any obligation to update or revise forward-looking statements or information, whether as a result of new information, changes in assumptions, future events or otherwise, except to the extent required by applicable law.
Cautionary Note to US Investors Concerning Estimates of Mineral Reserves and Resources
This news release has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all mineral reserve and resource estimates included in this news release have been disclosed in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (''NI 43-101'') and the Canadian Institute of Mining, Metallurgy and Petroleum definition standards. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.
Canadian standards, including NI 43-101, differ significantly from the requirements of the SEC, and information concerning mineralization, deposits, mineral reserve and resource information contained or referred to herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, this news release uses the terms ''measured resources'', ''indicated resources'' and ''inferred resources''. U.S. investors are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. The requirements of NI 43-101 for identification of ''reserves'' are not the same as those of the SEC, and reserves reported by Pan American in compliance with NI 43-101 may not qualify as ''reserves'' under SEC standards. Under U.S. standards, mineralization may not be classified as a ''reserve'' unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U.S. investors are cautioned not to assume that any part of a "measured resource" or "indicated resource" will ever be converted into a "reserve". U.S. investors should also understand that "inferred resources" have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of "inferred resources" exist, are economically or legally mineable or will ever be upgraded to a higher category. Under Canadian securities laws, estimated "inferred resources" may not form the basis of feasibility or pre-feasibility studies except in rare cases. Disclosure of "contained ounces" in a mineral resource is permitted disclosure under Canadian securities laws. However, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as in place tonnage and grade, without reference to unit measures. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companies that report in accordance with U.S. standards.
| Consolidated Statements of Financial Position | |||||
| (Unaudited in thousands of U.S. dollars) | |||||
| December 31, | December 31, | ||||
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | $ | 175,953 | $ | 180,881 | |
| Short-term investments | 51,590 | 36,729 | |||
| Trade and other receivables | 109,746 | 130,117 | |||
| Income taxes receivable | 16,991 | 17,460 | |||
| Inventories | 218,715 | 237,329 | |||
| Derivative financial instruments | 1,092 | — | |||
| Assets held for sale | 7,949 | — | |||
| Prepaid expenses and other current assets | 13,434 | 10,337 | |||
| 595,470 | 612,853 | ||||
| Non-current assets | |||||
| Mineral properties, plant and equipment | 1,336,683 | 1,222,727 | |||
| Long-term refundable tax | 80 | 7,664 | |||
| Deferred tax assets | 2,679 | 1,727 | |||
| Investment in associates | 55,017 | 49,734 | |||
| Other assets | 346 | 379 | |||
| Goodwill | 3,057 | 3,057 | |||
| Total Assets | $ | 1,993,332 | $ | 1,898,141 | |
| Liabilities | |||||
| Current liabilities | |||||
| Accounts payable and accrued liabilities | $ | 139,698 | $ | 143,502 | |
| Loans payable | 3,000 | — | |||
| Derivative financial instruments | 1,906 | 2,815 | |||
| Current portion of provisions | 8,245 | 8,499 | |||
| Current portion of finance lease | 5,734 | 3,559 | |||
| Income tax payable | 26,131 | 25,911 | |||
| 184,714 | 184,286 | ||||
| Non-current liabilities | |||||
| Long-term portion of provisions | 61,248 | 51,444 | |||
| Deferred tax liabilities | 171,228 | 170,863 | |||
| Long-term portion of finance lease | 1,825 | 3,542 | |||
| Long-term debt | — | 36,200 | |||
| Deferred revenue | 12,017 | 11,561 | |||
| Other long-term liabilities | 26,954 | 27,408 | |||
| Share purchase warrants | 14,295 | 13,833 | |||
| Total Liabilities | 472,281 | 499,137 | |||
| Equity | |||||
| Capital and reserves | |||||
| Issued capital | 2,318,252 | 2,303,978 | |||
| Share option reserve | 22,463 | 22,946 | |||
| Investment revaluation reserve | 1,605 | 434 | |||
| Deficit | (825,470) | (931,060) | |||
| Total Equity attributable to equity holders of the Company | 1,516,850 | 1,396,298 | |||
| Non-controlling interests | 4,201 | 2,706 | |||
| Total Equity | 1,521,051 | 1,399,004 | |||
| Total Liabilities and Equity | $ | 1,993,332 | $ | 1,898,141 | |
| Consolidated Income Statements | |||||||||
| (Unaudited in thousands of U.S. dollars except per share amounts) | |||||||||
| Three months ended | Year ended | ||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||
| Revenue | $ | 226,031 | $ | 190,596 | $ | 816,828 | $ | 774,775 | |
| Cost of sales | |||||||||
| Production costs | (139,697) | (110,466) | (500,670) | (428,333) | |||||
| Depreciation and amortization | (34,240) | (23,032) | (122,888) | (115,955) | |||||
| Royalties | (8,809) | (8,142) | (24,510) | (31,608) | |||||
| (182,746) | (141,640) | (648,068) | (575,896) | ||||||
| Mine operating earnings | 43,285 | 48,956 | 168,760 | 198,879 | |||||
| General and administrative | (4,732) | (5,592) | (21,397) | (23,663) | |||||
| Exploration and project development | (4,269) | (3,068) | (19,755) | (11,334) | |||||
| Foreign exchange gains (losses) | 1,052 | (4,441) | 1,823 | (9,054) | |||||
| Impairment reversals | 61,554 | — | 61,554 | — | |||||
| (Losses) gains on commodity, diesel fuel swaps, and foreign | |||||||||
| currency contracts | (1,841) | (1,710) | 606 | (4,944) | |||||
| (Loss) gain on sale of mineral properties, plant and equipment | (794) | 6,795 | 191 | 25,100 | |||||
| Share of loss from associate and dilution gain | 259 | 1,308 | 2,052 | 7,946 | |||||
| Other (expense) income | (4,011) | 3,254 | (5,505) | 1,542 | |||||
| Earnings from operations | 90,503 | 45,502 | 188,329 | 184,472 | |||||
| Gain on derivatives | 64 | — | 64 | — | |||||
| Investment income | 658 | 371 | 1,277 | 1,350 | |||||
| Interest and finance expense | (2,353) | (2,730) | (7,185) | (9,551) | |||||
| Earnings before income taxes | 88,872 | 43,143 | 182,485 | 176,271 | |||||
| Income tax expense | (39,208) | (20,859) | (59,034) | (74,446) | |||||
| Net earnings for the period | $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | |
| Attributable to: | |||||||||
| Equity holders of the Company | $ | 48,892 | $ | 21,777 | $ | 120,991 | $ | 100,085 | |
| Non-controlling interests | 772 | 507 | 2,460 | 1,740 | |||||
| $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | ||
| Earnings per share attributable to common shareholders | |||||||||
| Basic earnings per share | $ | 0.32 | $ | 0.14 | $ | 0.79 | $ | 0.66 | |
| Diluted earnings per share | $ | 0.32 | $ | 0.14 | $ | 0.79 | $ | 0.66 | |
| Weighted average shares outstanding (in 000's) Basic | 153,207 | 152,263 | 153,070 | 152,118 | |||||
| Weighted average shares outstanding (in 000's) Diluted | 153,434 | 152,669 | 153,353 | 152,504 | |||||
| Consolidated Statements of Comprehensive Income | ||||||||||
| (Unaudited in thousands of U.S. dollars) | ||||||||||
| Three months ended | Year ended | |||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||
| Net earnings for the period | $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | ||
| Items that may be reclassified subsequently to net earnings: | ||||||||||
| Unrealized net gains (losses) on available for sale securities | 1,376 | (2,151) | 810 | 912 | ||||||
| Reclassification adjustment for realized losses (gains) on | 250 | (27) | 361 | (20) | ||||||
| Total comprehensive earnings for the period | $ | 51,290 | $ | 20,106 | $ | 124,622 | $ | 102,717 | ||
| Total comprehensive earnings attributable to: | ||||||||||
| Equity holders of the Company | $ | 50,518 | $ | 19,599 | $ | 122,162 | $ | 100,977 | ||
| Non-controlling interests | 772 | 507 | 2,460 | 1,740 | ||||||
| $ | 51,290 | $ | 20,106 | $ | 124,622 | $ | 102,717 | |||
| Consolidated Statements of Cash Flows | ||||||||
| (Unaudited in thousands of U.S. dollars) | ||||||||
| Three months ended | Year ended | |||||||
| 2017 | 2016 | 2017 | 2016 | |||||
| Cash flow from operating activities | ||||||||
| Net earnings for the period | $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 |
| Current income tax expense | 26,706 | 9,841 | 62,877 | 44,031 | ||||
| Deferred income tax expense (recovery) | 12,502 | 11,018 | (3,843) | 30,415 | ||||
| Interest expense (recovery) | 284 | 891 | (1,179) | 2,115 | ||||
| Depreciation and amortization | 34,240 | 23,032 | 122,888 | 115,955 | ||||
| Impairment reversals | (61,554) | — | (61,554) | — | ||||
| Accretion on closure and decommissioning provision | 1,493 | 1,090 | 5,973 | 4,363 | ||||
| Unrealized losses (gains) on foreign exchange | 362 | 4,139 | (383) | 5,759 | ||||
| Losses (gains) on commodity, diesel fuel swaps, and foreign | 1,841 | 1,710 | (606) | 4,944 | ||||
| Loss (gain) on sale of mineral properties, plant and equipment | 794 | (157) | (191) | (25,100) | ||||
| Project development write-down | — | — | 1,898 | — | ||||
| Other operating activities | 5,856 | (18,613) | 13,269 | (46,935) | ||||
| Changes in non-cash operating working capital | 15,193 | 2,283 | 11,709 | (5,545) | ||||
| Operating cash flows before interest and income taxes | $ | 87,381 | $ | 57,518 | $ | 274,309 | $ | 231,827 |
| Interest paid | (413) | (1,800) | (2,367) | (2,553) | ||||
| Interest received | 414 | 406 | 1,462 | 1,382 | ||||
| Income taxes paid | (8,091) | (10,456) | (48,845) | (15,852) | ||||
| Net cash generated from operating activities | $ | 79,291 | $ | 45,668 | $ | 224,559 | $ | 214,804 |
| Cash flow from investing activities | ||||||||
| Payments for mineral properties, plant and equipment | $ | (36,473) | $ | (56,477) | $ | (142,232) | $ | (202,661) |
| Acquisition of mineral interests | — | — | (20,219) | — | ||||
| Net (purchase of) proceeds from sales of short-term investments | (703) | (3,199) | (14,267) | 56,870 | ||||
| Proceeds from sale of mineral properties, plant and equipment | 36 | 738 | 1,674 | 16,319 | ||||
| Purchase of shares in associate | — | — | (2,473) | — | ||||
| Net proceeds (payments) from commodity, diesel fuel swaps, | 348 | (2,145) | (304) | (4,965) | ||||
| Exercise of warrants and other payments | — | (5,460) | — | (5,460) | ||||
| Net cash used in investing activities | $ | (36,792) | $ | (66,543) | $ | (177,821) | $ | (139,897) |
| Cash flow from financing activities | ||||||||
| Proceeds from issue of equity shares | $ | 28 | $ | 96 | $ | 2,606 | $ | 2,399 |
| Distributions to non-controlling interests | (314) | (107) | (1,052) | (428) | ||||
| Dividends paid | (3,830) | (1,903) | (15,314) | (7,606) | ||||
| Repayment of credit facility | — | — | (36,200) | — | ||||
| Proceeds from (payment of) short-term loans | 3,000 | (5,172) | 3,000 | (19,536) | ||||
| Payment of equipment leases | (1,344) | (725) | (4,542) | (3,047) | ||||
| Net cash used in financing activities | $ | (2,460) | $ | (7,811) | $ | (51,502) | $ | (28,218) |
| Effects of exchange rate changes on cash and cash equivalents | (80) | 2 | (164) | 229 | ||||
| Net increase in cash and cash equivalents | 39,959 | (28,684) | (4,928) | 46,918 | ||||
| Cash and cash equivalents at the beginning of the period | 135,994 | 209,565 | 180,881 | 133,963 | ||||
| Cash and cash equivalents at the end of the period | $ | 175,953 | $ | 180,881 | $ | 175,953 | $ | 180,881 |
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES
AISCSOS
AISCSOS is a non-GAAP financial measure. AISCSOS does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. We believe that AISCSOS reflects a comprehensive measure of the full cost of operating our consolidated business given it includes the cost of replacing silver ounces through exploration, the cost of ongoing capital investments (sustaining capital), general and administrative expenses, as well as other items that affect the Company's consolidated cash flow. To facilitate a better understanding of this measure as calculated by the Company, the following table provides the detailed reconciliation of this measure to the applicable cost items, as reported in the consolidated income statements for the respective periods:
| Three months ended | Year ended | ||||||||
| (In thousands of USD, except as noted) | 2017 | 2016 | 2017 | 2016 | |||||
| Direct operating costs | $ | 134,202 | $ | 120,496 | $ | 488,363 | $ | 472,806 | |
| Inventory net realizable value ("NRV") adjustments | A | 5,495 | (10,715) | 12,307 | (42,815) | ||||
| Production costs(1) | $ | 139,697 | $ | 109,781 | $ | 500,670 | $ | 429,991 | |
| Royalties | 8,809 | 8,142 | 24,510 | 31,608 | |||||
| Direct selling costs (2) | 19,408 | 20,656 | 69,344 | 80,319 | |||||
| Less by-product credits (2) | (131,679) | (109,571) | (462,663) | (424,442) | |||||
| Cash cost of sales net of by-products (3) | $ | 36,235 | $ | 29,009 | $ | 131,862 | $ | 117,476 | |
| Sustaining capital (4) | $ | 25,573 | $ | 24,976 | $ | 84,215 | $ | 89,394 | |
| Exploration and project development(5) | 4,269 | 3,068 | 17,858 | 11,334 | |||||
| Reclamation cost accretion | 1,493 | 1,090 | 5,973 | 4,363 | |||||
| General and administrative expense | 4,732 | 5,592 | 21,397 | 23,663 | |||||
| All-in sustaining costs (3) | B | $ | 72,303 | $ | 63,735 | $ | 261,304 | $ | 246,230 |
| Payable ounces sold (in thousands) | C | 6,659.4 | 6,138.2 | 24,211.7 | 24,199.5 | ||||
| All-in sustaining cost per silver ounce sold, net of by-products | B/C | $ | 10.86 | $ | 10.38 | $ | 10.79 | $ | 10.17 |
| All-in sustaining cost per silver ounce sold, net of by-products | (B-A)/C | $ | 10.03 | $ | 12.13 | $ | 10.28 | $ | 11.94 |
| (1) | For the purposes of AISCSOS, Alamo Dorado production costs for the three and twelve month periods ended December 31, 2016 have been decreased by $0.6 million and increased by $1.7 million, respectively, to exclude non-cash adjustments to the closure and decommissioning liabilities that are included in production costs as presented in the unaudited consolidated statements of income (loss). |
| (2) | Included in the revenue line of the interim consolidated income statements, and for by-product credits are reflective of realized metal prices for the applicable periods. |
| (3) | Totals may not add due to rounding. |
| (4) | Please refer to the table below. Further, 2017 annual sustaining capital cash outflows included in this table were $0.2 million less than the $84.4 million capitalized in 2017, as shown in the Capital Expenditures table included in this news release. The difference is due to the timing difference between the cash payment of capital investments compared with the period in which investments are capitalized. |
| (5) | The amounts for year-to-date 2017 exclude $1.9 million from non-cash project development write-downs. |
As part of the AISCSOS measure, sustaining capital is included while expansionary or acquisition capital (referred to by the Company as non-sustaining capital) is not. Inclusion of sustaining capital only is a measure of capital costs associated with current ounces sold as opposed to investment capital, which is expected to increase future production. For the periods under review, the items noted below are associated with the La Colorada expansion project, the Dolores leach pad and other expansionary expenditures considered to be investment capital projects.
| Reconciliation of payments for mineral properties, | Three months ended | Year ended | ||||
| (in thousands of USD) | 2017 | 2016 | 2017 | 2016 | ||
| Payments for mineral properties, plant and equipment(1) | $ | 36,473 | $ | 56,477 | 142,232 | 202,661 |
| Add/(Subtract) | ||||||
| Advances received for leases | 1,385 | 2,213 | 5,000 | 6,151 | ||
| Non-Sustaining capital (Dolores, La Colorada projects, and other) | (12,284) | (33,714) | (63,017) | (119,418) | ||
| Sustaining Capital(2) | $ | 25,573 | $ | 24,976 | 84,215 | 89,394 |
| (1) | As presented on the unaudited interim consolidated statements of cash flows. |
| (2) | Totals may not add due to rounding |
| Three months ended December 31, 2017 | |||||||||||||||||
| (In thousands of USD, except as noted) | La | Dolores | Alamo | Huaron | Morococha | San | Manantial | PASCORP | Consolidated | ||||||||
| Direct operating costs | 16,580 | 35,739 | 3,957 | 19,551 | 16,931 | 10,484 | 30,960 | 134,202 | |||||||||
| NRV inventory adjustments | — | 4,098 | (1,916) | — | — | — | 3,313 | 5,495 | |||||||||
| Production costs | 16,580 | 39,838 | 2,041 | 19,551 | 16,931 | 10,484 | 34,273 | 139,697 | |||||||||
| Royalties | 106 | 1,966 | — | — | — | 6,105 | 633 | 8,809 | |||||||||
| Direct selling costs | 4,066 | 31 | 248 | 6,659 | 5,014 | 3,383 | 8 | 19,408 | |||||||||
| Less by-product credits | (18,316) | (39,317) | (61) | (24,653) | (26,767) | (6,969) | (15,595) | (131,679) | |||||||||
| Cash cost of sales net of by-products(1) | 2,435 | 2,518 | 2,227 | 1,557 | (4,823) | 13,002 | 19,319 | 36,235 | |||||||||
| Sustaining capital | 2,576 | 13,303 | — | 3,548 | 3,162 | 1,939 | 1,045 | 25,573 | |||||||||
| Exploration and project development | 73 | 564 | — | 428 | 543 | — | 936 | 1,726 | 4,269 | ||||||||
| Reclamation cost accretion | 112 | 296 | 89 | 162 | 105 | 56 | 619 | 54 | 1,493 | ||||||||
| General & administrative expense | — | — | — | — | — | — | — | 4,731 | 4,732 | ||||||||
| All-in sustaining costs(1) | 5,196 | 16,682 | 2,317 | 5,695 | (1,013) | 14,998 | 21,918 | 6,511 | 72,303 | ||||||||
| Payable ounces sold (thousand) | 1,847 | 1,225 | 133 | 813 | 658 | 1,218 | 766 | 6,659 | |||||||||
| All-in sustaining cost per silver ounce | $ | 2.81 | $ | 13.62 | $ | 17.45 | $ | 7.00 | $ | (1.54) | $ | 12.31 | $ | 28.63 | $ | 10.86 | |
| All-in sustaining cost per silver ounce | 2.81 | 10.27 | 31.89 | 7.00 | (1.54) | 12.31 | 24.30 | 10.03 | |||||||||
| (1) | Totals may not add due to rounding. |
| Year ended December 31, 2017 | |||||||||||||||||
| (In thousands of USD, except as noted) | La | Dolores | Alamo | Huaron | Morococha | San | Manantial | PASCORP | Consolidated | ||||||||
| Direct operating costs | 67,170 | 116,104 | 20,477 | 75,551 | 63,967 | 34,731 | 110,362 | 488,363 | |||||||||
| NRV inventory adjustments | 6,847 | (2,598) | 8,058 | 12,307 | |||||||||||||
| Production costs | 67,170 | 122,951 | 17,879 | 75,551 | 63,967 | 34,731 | 118,420 | 500,670 | |||||||||
| Royalties | 475 | 6,501 | 79 | — | — | 14,321 | 3,134 | 24,510 | |||||||||
| Direct selling costs | 12,235 | 93 | 479 | 26,238 | 18,770 | 10,740 | 789 | 69,344 | |||||||||
| Less by-product credits | (64,133) | (128,351) | (3,467) | (97,715) | (94,233) | (16,278) | (58,485) | (462,663) | |||||||||
| Cash cost of sales net of by-products(1) | 15,748 | 1,194 | 14,970 | 4,074 | (11,496) | 43,513 | 63,858 | 131,862 | |||||||||
| Sustaining capital | 13,970 | 36,071 | — | 10,267 | 12,428 | 8,146 | 3,333 | 84,215 | |||||||||
| Exploration and project development | 251 | 2,444 | — | 1,713 | 1,629 | — | 4,588 | 7,232 | 17,858 | ||||||||
| Reclamation cost accretion | 448 | 1,186 | 357 | 646 | 420 | 225 | 2,474 | 216 | 5,973 | ||||||||
| General & administrative expense | — | — | — | — | — | — | — | 21,397 | 21,397 | ||||||||
| All-in sustaining costs(1) | 30,417 | 40,894 | 15,327 | 16,701 | 2,981 | 51,884 | 74,254 | 28,845 | 261,304 | ||||||||
| Payable ounces sold (thousand) | 6,853 | 4,089 | 867 | 3,181 | 2,448 | 3,603 | 3,171 | 24,212 | |||||||||
| All-in sustaining cost per silver ounce | $ | 4.44 | $ | 10.00 | $ | 17.69 | $ | 5.25 | $ | 1.22 | $ | 14.40 | $ | 23.42 | $ | 10.79 | |
| All-in sustaining cost per silver ounce | $ | 4.44 | $ | 8.33 | $ | 20.68 | $ | 5.25 | $ | 1.22 | $ | 14.40 | $ | 20.88 | $ | 10.28 | |
| (1) | Totals may not add due to rounding. |
| Three months ended December 31, 2016 | |||||||||||||||||
| (In thousands of USD, except as noted) | La | Dolores | Alamo | Huaron | Morococha | San | Manantial | PASCORP | Consolidated | ||||||||
| Direct operating costs | 14,674 | 28,664 | 7,266 | 17,991 | 15,547 | 10,016 | 26,336 | 120,496 | |||||||||
| NRV inventory adjustments | — | (6,350) | 2,224 | — | — | — | (6,589) | (10,715) | |||||||||
| Production costs | 14,674 | 22,314 | 9,490 | 17,991 | 15,547 | 10,016 | 19,747 | 109,781 | |||||||||
| Royalties | 135 | 1,604 | 33 | — | — | 5,598 | 772 | 8,142 | |||||||||
| Direct selling costs | 3,712 | 23 | 125 | 7,735 | 5,643 | 4,634 | (1,215) | 20,656 | |||||||||
| Less by-product credits | (12,238) | (32,868) | (1,609) | (21,206) | (18,379) | (5,372) | (17,898) | (109,571) | |||||||||
| Cash cost of sales net of by-products(1) | 6,283 | (8,927) | 8,039 | 4,520 | 2,812 | 14,876 | 1,406 | 29,009 | |||||||||
| Sustaining capital | 2,229 | 10,772 | — | 4,355 | 4,892 | 1,631 | 1,097 | 24,976 | |||||||||
| Exploration and project development | 31 | 628 | — | 576 | 109 | — | — | 1,723 | 3,068 | ||||||||
| Reclamation cost accretion | 72 | 179 | 104 | 126 | 86 | 54 | 433 | 37 | 1,090 | ||||||||
| General & administrative expense | — | — | — | — | — | — | — | 5,592 | 5,592 | ||||||||
| All-in sustaining costs(1) | 8,615 | 2,652 | 8,144 | 9,576 | 7,899 | 16,561 | 2,935 | 7,352 | 63,735 | ||||||||
| Payable ounces sold (thousand) | 1,561 | 895 | 286 | 759 | 526 | 1,332 | 779 | 6,138 | |||||||||
| All-in sustaining cost per silver ounce | $ | 5.52 | $ | 2.96 | $ | 28.44 | $ | 12.62 | $ | 15.02 | $ | 12.43 | $ | 3.77 | $ | 10.38 | |
| All-in sustaining cost per silver ounce | $ | 5.52 | $ | 10.06 | $ | 20.68 | $ | 12.62 | $ | 15.02 | $ | 12.43 | $ | 12.22 | $ | 12.13 | |
| (1) | Totals may not add due to rounding. |
| Year ended December 31, 2016 | |||||||||||||||||
| (In thousands of USD, except as noted) | La | Dolores | Alamo | Huaron | Morococha | San | Manantial | PASCORP | Consolidated | ||||||||
| Direct operating costs | 50,879 | 121,162 | 40,172 | 67,911 | 58,868 | 34,959 | 98,856 | 472,806 | |||||||||
| NRV inventory adjustments | (22,434) | 1,173 | (21,554) | (42,815) | |||||||||||||
| Production costs | 50,879 | 98,728 | 41,345 | 67,911 | 58,868 | 34,959 | 77,302 | 429,991 | |||||||||
| Royalties | 401 | 6,224 | 235 | — | — | 20,929 | 3,818 | 31,608 | |||||||||
| Direct selling costs | 13,554 | 107 | 376 | 32,443 | 25,702 | 15,697 | (7,562) | 80,319 | |||||||||
| Less by-product credits | (34,737) | (123,811) | (13,156) | (77,754) | (74,754) | (15,774) | (84,456) | (424,442) | |||||||||
| Cash cost of sales net of by-products(1) | 30,098 | (18,751) | 28,800 | 22,600 | 9,817 | 55,811 | (10,898) | 117,476 | |||||||||
| Sustaining capital | 10,545 | 48,079 | — | 11,994 | 10,945 | 4,963 | 2,868 | 89,394 | |||||||||
| Exploration and project development | 186 | 1,792 | — | 837 | 1,053 | — | — | 7,465 | 11,334 | ||||||||
| Reclamation cost accretion | 287 | 714 | 416 | 505 | 345 | 218 | 1,731 | 148 | 4,363 | ||||||||
| General & administrative expense | — | — | — | — | — | — | — | 23,663 | 23,663 | ||||||||
| All-in sustaining costs(1) | 41,116 | 31,834 | 29,216 | 35,935 | 22,159 | 60,991 | (6,299) | 31,276 | 246,230 | ||||||||
| Payable ounces sold (thousand) | 5,486 | 3,839 | 1,967 | 3,233 | 2,377 | 4,264 | 3,033 | 24,200 | |||||||||
| All-in sustaining cost per silver ounce sold, net of by-products | $ | 7.49 | $ | 8.29 | $ | 14.85 | $ | 11.11 | $ | 9.32 | $ | 14.30 | $ | (2.08) | $ | 10.17 | |
| All-in sustaining cost per silver ounce sold, net of by-products (excludes NRV inventory adjustments) | $ | 7.49 | $ | 14.14 | $ | 14.26 | $ | 11.11 | $ | 9.32 | $ | 14.30 | $ | 5.03 | $ | 11.94 | |
| (1) | Totals may not add due to rounding. |
- Cash Costs per Ounce of Silver, net of by-product credits
Pan American produces by-product metals incidentally to our silver mining activities. We have adopted the practice of calculating the net cost of producing an ounce of silver, our primary payable metal, after deducting revenues gained from incidental by-product production, as a performance measure. This performance measurement has been commonly used in the mining industry for many years and was developed as a relatively simple way of comparing the net production costs of the primary metal for a specific period against the prevailing market price of that metal.
Cash costs per ounce metrics, net of by-product credits, is used extensively in our internal decision making processes. We believe the metric is also useful to investors because it facilitates comparison, on a mine-by-mine basis, notwithstanding the unique mix of incidental by-product production at each mine, of our operations' relative performance on a period-by-period basis, and against the operations of our peers in the silver industry on a consistent basis. Cash costs per ounce is conceptually understood and widely reported in the silver mining industry. However, cash cost per ounce of silver is a non-GAAP measure and does not have a standardized meaning prescribed by GAAP and the Company's method of calculating cash costs may differ from the methods used by other entities.
To facilitate a better understanding of these measures as calculated by the Company, the following table provides the detailed reconciliation of these measures to the production costs, as reported in the consolidated income statements for the respective periods:
| Total Cash Costs per ounce of Payable Silver, net of | Three months ended | Year ended | ||||||||
| (in thousands of U.S. dollars except as noted) | 2017 | 2016 | 2017 | 2016 | ||||||
| Production costs | $ | 139,697 | $ | 110,466 | $ | 500,670 | $ | 428,333 | ||
| Add/(Subtract) | ||||||||||
| Royalties | 8,809 | 8,142 | 24,510 | 31,608 | ||||||
| Smelting, refining, and transportation charges | 18,469 | 22,204 | 73,222 | 91,371 | ||||||
| Worker's participation and voluntary payments | (1,374) | (876) | (5,067) | (3,397) | ||||||
| Change in inventories | (12,776) | (3,473) | (16,011) | (11,937) | ||||||
| Other | 555 | 358 | 1,559 | (5,660) | ||||||
| Non-controlling interests (1) | (64) | (811) | (1,126) | (3,358) | ||||||
| Inventory net realizable value ("NRV") adjustments | (5,495) | 10,715 | (12,307) | 42,815 | ||||||
| Cash Operating Costs before by-product credits(2) | 147,820 | 146,725 | 565,450 | 569,775 | ||||||
| Less gold credit | (54,648) | (52,888) | (196,649) | (227,196) | ||||||
| Less zinc credit | (40,826) | (28,486) | (137,826) | (93,428) | ||||||
| Less lead credit | (12,687) | (11,226) | (46,948) | (35,890) | ||||||
| Less copper credit | (20,026) | (14,667) | (77,348) | (63,404) | ||||||
| Cash Operating Costs net of by-product credits (2) | A | 19,633 | 39,457 | 106,678 | 149,857 | |||||
| Payable Silver Production (koz) | B | 6,172 | 5,925 | 23,444 | 23,818 | |||||
| Cash Costs per ounce net of by-product credits | A/B | $ | 3.18 | $ | 6.66 | $ | 4.55 | $ | 6.29 | |
| (1) | Figures presented in the reconciliation table above are on a 100% basis as presented in the consolidated financial statements with an adjustment line item to account for the portion of the Morococha and San Vicente mines owned by non-controlling interests, an expense item not included in operating cash costs. The associated tables below are for the Company's share of ownership only. |
| (2) | Figures in this table and in the associated tables below may not add due to rounding. |
| Three months ended December 31, 2017 (1) (in thousands of USD except as noted) | ||||||||||||||||||
| La | Dolores | Alamo | Huaron | Morococha | San | Manantial | Consolidated | |||||||||||
| Cash Costs before by- | A | $ | 18,708 | $ | 34,778 | $ | 136 | $ | 26,440 | $ | 20,276 | $ | 15,300 | $ | 29,800 | $ | 145,437 | |
| Less gold credit | b1 | (1,377) | (39,708) | (90) | (9) | (625) | (79) | (12,704) | (54,592) | |||||||||
| Less zinc credit | b2 | (11,337) | — | — | (12,296) | (12,205) | (3,767) | — | (39,605) | |||||||||
| Less lead credit | b3 | (5,232) | — | — | (4,758) | (2,361) | (131) | — | (12,483) | |||||||||
| Less copper credit | b4 | — | — | — | (7,671) | (9,585) | (1,868) | — | (19,124) | |||||||||
| Sub-total by-product credits | B=( b1+ | $ | (17,947) | $ | (39,708) | $ | (90) | $ | (24,733) | $ | (24,776) | $ | (5,845) | $ | (12,704) | $ | (125,804) | |
| Cash Costs net of by- | C=(A+B) | $ | 761 | $ | (4,930) | $ | 46 | $ | 1,706 | $ | (4,500) | $ | 9,455 | $ | 17,095 | $ | 19,633 | |
| Payable ounces of silver | D | 1,777 | 1,254 | 22 | 821 | 607 | 1,046 | 645 | 6,172 | |||||||||
| Cash cost per ounce net | C/D | $ | 0.43 | $ | (3.93) | $ | 2.09 | $ | 2.08 | $ | (7.42) | $ | 9.04 | $ | 26.52 | $ | 3.18 | |
| (1) | Totals may not add due to rounding. |
| Year ended December 31, 2017(1) (in thousands of USD except as noted) | ||||||||||||||||||
| La | Dolores | Alamo | Huaron | Morococha | San | Manantial | Consolidated | |||||||||||
| Cash Costs before by- | A | $ | 75,407 | 122,532 | $ | 12,666 | $ | 101,588 | $ | 76,085 | $ | 55,286 | $ | 113,726 | $ | 557,291 | ||
| Less gold credit | b1 | (4,477) | (129,503) | (2,498) | (148) | (2,639) | (305) | (56,842) | (196,411) | |||||||||
| Less zinc credit | b2 | (37,967) | — | — | (46,080) | (39,402) | (10,522) | — | (133,972) | |||||||||
| Less lead credit | b3 | (18,994) | — | — | (19,039) | (7,573) | (672) | — | (46,278) | |||||||||
| Less copper credit | b4 | — | — | (46) | (32,059) | (38,315) | (3,533) | — | (73,952) | |||||||||
| Sub-total by-product | B=( b1+ | $ | (61,438) | $ | (129,503) | $ | (2,544) | $ | (97,327) | $ | (87,929) | $ | (15,032) | $ | (56,842) | $ | (450,614) | |
| Cash Costs net of by- | C=(A+B) | $ | 13,970 | $ | (6,971) | $ | 10,123 | $ | 4,261 | $ | (11,844) | $ | 40,254 | $ | 56,884 | $ | 106,677 | |
| Payable ounces of silver | D | 6,709 | 4,225 | 614 | 3,164 | 2,219 | 3,396 | 3,117 | 23,444 | |||||||||
| Cash cost per ounce net | C/D | $ | 2.08 | $ | (1.65) | $ | 16.49 | $ | 1.35 | $ | (5.34) | $ | 11.85 | $ | 18.25 | $ | 4.55 | |
| (1) | Totals may not add due to rounding. |
| Three months ended December 31, 2016(1) (in thousands of USD except as noted) | ||||||||||||||||||
| La | Dolores | Alamo | Huaron | Morococha | San | Manantial | Consolidated | |||||||||||
| Cash Costs before by- | A | $ | 19,118 | 29,875 | $ | 10,704 | $ | 25,766 | $ | 19,496 | $ | 14,034 | $ | 26,259 | $ | 145,251 | ||
| Less gold credit | b1 | (841) | (35,183) | (1,690) | — | (165) | (86) | (14,905) | (52,870) | |||||||||
| Less zinc credit | b2 | (7,801) | — | — | (11,056) | (7,361) | (1,568) | — | (27,787) | |||||||||
| Less lead credit | b3 | (3,513) | — | — | (6,005) | (1,444) | (136) | — | (11,098) | |||||||||
| Less copper credit | b4 | — | — | 31 | (5,122) | (7,849) | (1,095) | — | (14,035) | |||||||||
| Sub-total by-product credits | B=( b1+ | $ | (12,155) | $ | (35,183) | $ | (1,659) | $ | (22,183) | $ | (16,819) | $ | (2,885) | $ | (14,905) | $ | (105,790) | |
| Cash Costs net of by- | C=(A+B) | $ | 6,962 | $ | (5,308) | $ | 9,046 | $ | 3,583 | $ | 2,676 | $ | 11,149 | $ | 11,354 | $ | 39,462 | |
| Payable ounces of silver | D | 1,588 | 895 | 397 | 789 | 485 | 994 | 777 | 5,925 | |||||||||
| Cash cost per ounce net | C/D | $ | 4.38 | $ | (5.93) | $ | 22.80 | $ | 4.54 | $ | 5.52 | $ | 11.22 | $ | 14.61 | $ | 6.66 | |
| (1) | Totals may not add due to rounding. |
| Year ended December 31, 2016(1) (in thousands of USD except as noted) | ||||||||||||||||||
| La | Dolores | Alamo | Huaron | Morococha | San | Manantial | Consolidated | |||||||||||
| Cash Costs before by- | A | $ | 68,057 | 124,570 | $ | 39,891 | $ | 96,284 | $ | 75,586 | $ | 61,779 | $ | 97,388 | $ | 563,555 | ||
| Less gold credit | b1 | (2,929) | (128,696) | (10,251) | (2) | (897) | (335) | (83,992) | (227,103) | |||||||||
| Less zinc credit | b2 | (20,636) | — | — | (34,638) | (26,841) | (8,611) | — | (90,726) | |||||||||
| Less lead credit | b3 | (10,487) | — | — | (18,967) | (5,166) | (795) | — | (35,415) | |||||||||
| Less copper credit | b4 | — | — | (100) | (24,113) | (33,701) | (2,534) | — | (60,448) | |||||||||
| Sub-total by-product | B=(b1+ | $ | (34,052) | $ | (128,696) | $ | (10,351) | $ | (77,720) | $ | (66,605) | $ | (12,275) | $ | (83,992) | $ | (413,692) | |
| Cash Costs net of by- | C=(A+B) | $ | 34,004 | $ | (4,126) | $ | 29,539 | $ | 18,565 | $ | 8,981 | $ | 49,504 | $ | 13,396 | $ | 149,862 | |
| Payable ounces of silver | D | 5,531 | 3,831 | 1,844 | 3,208 | 2,132 | 4,143 | 3,130 | 23,818 | |||||||||
| Cash cost per ounce net | C/D | $ | 6.15 | $ | (1.08) | $ | 16.02 | $ | 5.79 | $ | 4.21 | $ | 11.95 | $ | 4.28 | $ | 6.29 | |
| (1) | Totals may not add due to rounding. |
- Adjusted Earnings and Basic Adjusted Earnings Per Share
Adjusted earnings and basic adjusted earnings per share are non-GAAP measures that the Company considers to better reflect normalized earnings as it eliminates items that in management's judgment are subject to volatility as a result of factors which are unrelated to operations in the period, and/or relate to items that will settle in future periods. Certain items that become applicable in a period may be adjusted for, with the Company retroactively presenting comparable periods with an adjustment for such items and conversely, items no longer applicable may be removed from the calculation. The Company adjusts certain items in the periods that they occurred but does not reverse or otherwise unwind the effect of such items in future periods. Neither adjusted earnings nor basic adjusted earnings per share have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.
The following table shows a reconciliation of adjusted loss and earnings for the year and three months ended December 31, 2017 and 2016, to the net earnings for each period.
| Three Months Ended | Year ended | |||||||||
| (In thousands of USD, except as noted) | 2017 | 2016 | 2017 | 2016 | ||||||
| Net earnings for the period | $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | ||
| Adjust for: | ||||||||||
| Derivative gains | (64) | — | (64) | — | ||||||
| Impairment reversals | (61,554) | — | (61,554) | — | ||||||
| Write-down of project development costs | — | — | 1,898 | — | ||||||
| Unrealized foreign exchange losses (gains) | 362 | 4,139 | (383) | 5,759 | ||||||
| Net realizable value adjustments to heap inventory | 4,936 | (6,619) | 10,060 | (14,110) | ||||||
| Unrealized losses (gains) on commodity contracts | 2,190 | (435) | (909) | (21) | ||||||
| Share of loss from associate and dilution gain | (259) | (8,484) | (2,052) | (7,946) | ||||||
| Mine operation severance costs | — | — | 3,509 | — | ||||||
| Reversal of previously accrued tax liabilities | — | — | (2,793) | — | ||||||
| Gain (loss) on sale of assets | 794 | (157) | (191) | (25,100) | ||||||
| Closure and decommissioning liability adjustment | 4,515 | — | 8,388 | — | ||||||
| Adjust for effect of taxes relating to the above | $ | 6,046 | $ | 2,180 | $ | 2,273 | $ | 11,870 | ||
| Adjust for effect of foreign exchange on taxes | 12,589 | 6,057 | (3,928) | 14,323 | ||||||
| Adjusted earnings for the period | $ | 19,219 | $ | 18,965 | $ | 77,705 | $ | 86,600 | ||
| Weighted average shares for the period | 153,207 | 152,118 | 153,070 | 152,118 | ||||||
| Adjusted earnings per share for the period | $ | 0.13 | $ | 0.12 | $ | 0.51 | $ | 0.57 | ||
INDIVIDUAL MINE OPERATION HIGHLIGHTS
La Colorada mine
| Three months ended | Year ended | |||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||
| Tonnes milled - kt | 170.7 | 154.6 | 655.3 | 528.8 | ||||||
| Average silver grade – grams per tonne | 374 | 370 | 368 | 377 | ||||||
| Average zinc grade - % | 2.88 | 2.79 | 2.81 | 2.63 | ||||||
| Average lead grade - % | 1.54 | 1.31 | 1.54 | 1.31 | ||||||
| Average silver recovery - % | 91.1 | 90.5 | 91.1 | 90.3 | ||||||
| Average zinc recovery - % | 84.1 | 84.5 | 83.7 | 82.2 | ||||||
| Average lead recovery - % | 86.2 | 86.7 | 86.9 | 86.5 | ||||||
| Production: | ||||||||||
| Silver – koz | 1,870 | 1,665 | 7,056 | 5,795 | ||||||
| Gold – koz | 1.26 | 0.86 | 4.29 | 2.93 | ||||||
| Zinc – kt | 4.14 | 3.64 | 15.44 | 11.40 | ||||||
| Lead – kt | 2.26 | 1.76 | 8.80 | 6.00 | ||||||
| Cash cost per ounce net of by-products | $ | 0.43 | $ | 4.38 | $ | 2.08 | $ | 6.15 | ||
| AISCSOS | $ | 2.81 | $ | 5.52 | $ | 4.44 | $ | 7.49 | ||
| Payable silver sold - koz | 1,847 | 1,561 | 6,853 | 5,486 | ||||||
| Sustaining capital - ('000s) | $ | 2,576 | $ | 2,229 | $ | 13,970 | $ | 10,545 | ||
Dolores mine
| Three months ended | Year ended | ||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||
| Tonnes placed - kt | 1,785.1 | 1,650.5 | 9,288.7 | 6,306.5 | |||||
| Average silver grade – grams per tonne | 39 | 43 | 38 | 37 | |||||
| Average gold grade – grams per tonne | 0.76 | 0.79 | 0.66 | 0.75 | |||||
| Average silver produced to placed ratio - % | 55.5 | 39.2 | 51.7 | 50.8 | |||||
| Average gold produced to placed ratio - % | 71.8 | 69.1 | 70.7 | 67.7 | |||||
| Production: | |||||||||
| Silver – koz | 1,256 | 897 | 4,232 | 3,838 | |||||
| Gold – koz | 31.2 | 28.8 | 103.0 | 102.8 | |||||
| Cash cost per ounce net of by-products | (3.93) | (5.93) | (1.65) | (1.08) | |||||
| AISCSOS | 13.62 | 2.96 | 10.00 | 8.29 | |||||
| Payable silver sold - koz | 1,225 | 895 | 4,089 | 3,839 | |||||
| Sustaining capital - ('000s) | $ | 13,303 | $ | 10,772 | $ | 36,071 | $ | 48,079 | |
Alamo Dorado mine
| Three months ended | Year ended | |||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||
| Tonnes milled - kt | — | 448.6 | 451.8 | 1,833.1 | ||||||
| Average silver grade – grams per tonne | NA | 40 | 43 | 45 | ||||||
| Average gold grade – grams per tonne | NA | 0.14 | 0.17 | 0.18 | ||||||
| Average silver recovery - % | NA | 65.2 | 67.6 | 68.8 | ||||||
| Production: | ||||||||||
| Silver – koz | 32.7 | 401.0 | 640.7 | 1,864.0 | ||||||
| Gold – koz | 0.1 | 1.4 | 2.1 | 8.4 | ||||||
| Copper – tonnes | 0 | 0 | 13 | 30 | ||||||
| Cash cost per ounce net of by-products | 2.09 | 22.80 | 16.49 | 16.02 | ||||||
| AISCSOS | 17.45 | 28.44 | 17.69 | 14.85 | ||||||
| Payable silver sold - koz | 133 | 286 | 867 | 1,967 | ||||||
| Sustaining capital - ('000s) | $ | — | $ | — | $ | — | $ | — | ||
Huaron mine
| Three months ended | Year ended | |||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||
| Tonnes milled - kt | 231.5 | 229.9 | 928.1 | 904.4 | ||||||
| Average silver grade – grams per tonne | 152 | 149 | 146 | 157 | ||||||
| Average zinc grade - % | 2.58 | 3.12 | 2.70 | 3.01 | ||||||
| Average lead grade - % | 1.15 | 1.59 | 1.23 | 1.51 | ||||||
| Average copper grade - % | 0.70 | 0.78 | 0.84 | 0.90 | ||||||
| Average silver recovery - % | 84.1 | 85.3 | 85.2 | 84.1 | ||||||
| Average zinc recovery - % | 77.8 | 74.6 | 77.6 | 74.3 | ||||||
| Average lead recovery - % | 76.6 | 81.4 | 77.7 | 79.4 | ||||||
| Average copper recovery - % | 74.5 | 72.1 | 78.5 | 75.5 | ||||||
| Production: | ||||||||||
| Silver – koz | 951 | 935 | 3,684 | 3,812 | ||||||
| Gold – koz | 0.19 | 0.20 | 1.15 | 0.81 | ||||||
| Zinc – kt | 4.64 | 5.31 | 19.37 | 19.94 | ||||||
| Lead – kt | 2.03 | 2.97 | 8.77 | 10.72 | ||||||
| Copper – kt | 1.21 | 1.27 | 6.09 | 6.07 | ||||||
| Cash cost per ounce net of by-products | $ | 2.08 | $ | 4.54 | $ | 1.35 | $ | 5.79 | ||
| AISCSOS | $ | 7.00 | $ | 12.62 | $ | 5.25 | $ | 11.11 | ||
| Payable silver sold – koz | 813 | 759 | 3,181 | 3,233 | ||||||
| Sustaining capital - ('000s) | $ | 3,548 | $ | 4,355 | $ | 10,267 | $ | 11,994 | ||
Morococha mine(1)
| Three months ended | Year ended | |||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||
| Tonnes milled – kt | 170.6 | 164.2 | 676.9 | 672.8 | ||||||
| Average silver grade – grams per tonne | 145 | 126 | 137 | 135 | ||||||
| Average zinc grade - % | 3.25 | 2.81 | 3.01 | 3.15 | ||||||
| Average lead grade - % | 0.84 | 0.71 | 0.78 | 0.75 | ||||||
| Average copper grade - % | 1.07 | 1.23 | 1.20 | 1.44 | ||||||
| Average silver recovery - % | 91.0 | 88.6 | 89.2 | 88.4 | ||||||
| Average zinc recovery - % | 81.2 | 76.2 | 79.6 | 73.2 | ||||||
| Average lead recovery - % | 71.0 | 62.9 | 66.6 | 60.0 | ||||||
| Average copper recovery - % | 83.4 | 82.6 | 83.9 | 82.6 | ||||||
| Production: | ||||||||||
| Silver – koz | 721 | 578 | 2,634 | 2,541 | ||||||
| Gold – koz | 0.82 | 0.43 | 3.53 | 2.14 | ||||||
| Zinc – kt | 4.49 | 3.48 | 16.13 | 15.46 | ||||||
| Lead – kt | 1.00 | 0.72 | 3.46 | 2.94 | ||||||
| Copper – kt | 1.49 | 1.60 | 6.64 | 7.74 | ||||||
| Cash cost per ounce net of by-products | $ | (7.42) | $ | 5.52 | $ | (5.34) | $ | 4.21 | ||
| AISCSOS | $ | (1.54) | $ | 15.02 | $ | 1.22 | $ | 9.32 | ||
| Payable silver sold (100%) - koz | 658 | 526 | 2,448 | 2,377 | ||||||
| Sustaining capital (100%) - ('000s) | $ | 3,162 | $ | 4,892 | $ | 12,428 | $ | 10,945 | ||
| (1) | Production figures are for Pan American's 92.3% share only, unless otherwise noted. |
San Vicente mine (1)
| Three months ended | Year ended | |||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||
| Tonnes milled – kt | 89.5 | 81.5 | 328.1 | 338.9 | ||||||
| Average silver grade – grams per tonne | 406 | 431 | 374 | 443 | ||||||
| Average zinc grade - % | 2.01 | 1.41 | 1.94 | 2.05 | ||||||
| Average lead grade - % | 0.25 | 0.29 | 0.29 | 0.32 | ||||||
| Average silver recovery - % | 93.9 | 93.9 | 92.6 | 93.2 | ||||||
| Average zinc recovery - % | 77.7 | 64.3 | 68.7 | 73.0 | ||||||
| Average lead recovery - % | 79.1 | 87.8 | 80.1 | 84.2 | ||||||
| Production: | ||||||||||
| Silver – koz | 1,102 | 1,050 | 3,610 | 4,433 | ||||||
| Gold – koz | 0.14 | 0.51 | ||||||||
| Zinc – kt | 1.40 | 0.75 | 4.36 | 5.08 | ||||||
| Lead – kt | 0.11 | 0.09 | 0.47 | 0.59 | ||||||
| Copper – kt | 0.33 | 0.23 | 0.63 | 0.55 | ||||||
| Cash cost per ounce net of by-products | $ | 9.04 | $ | 11.22 | $ | 11.85 | $ | 11.95 | ||
| AISCSOS | $ | 12.31 | $ | 12.43 | $ | 14.40 | $ | 14.30 | ||
| Payable silver sold (100%) - koz | 1,218 | 1,332 | 3,603 | 4,264 | ||||||
| Sustaining capital (100%) - ('000s) | $ | 1,939 | $ | 1,631 | $ | 8,146 | $ | 4,963 | ||
| (1) | Production figures are for Pan American's 95.0% share only, unless otherwise noted. |
Manantial Espejo mine
| Three months ended | Year ended | ||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||
| Tonnes milled - kt | 205.1 | 205.0 | 793.5 | 753.6 | |||||
| Average silver grade – grams per tonne | 107 | 130 | 134 | 143 | |||||
| Average gold grade – grams per tonne | 1.62 | 2.00 | 1.88 | 2.94 | |||||
| Average silver recovery - % | 89.7 | 91.1 | 90.6 | 90.2 | |||||
| Average gold recovery - % | 93.5 | 92.8 | 93.8 | 93.8 | |||||
| Production: | |||||||||
| Silver – koz | 646 | 779 | 3,123 | 3,136 | |||||
| Gold – koz | 9.98 | 12.21 | 45.34 | 66.89 | |||||
| Cash cost per ounce net of by-products | $ | 26.52 | $ | 14.61 | $ | 18.25 | $ | 4.28 | |
| AISCSOS | $ | 28.63 | $ | 3.77 | $ | 23.42 | $ | (2.08) | |
| Payable silver sold - koz | 766 | 779 | 3,171 | 3,033 | |||||
| Sustaining capital - ('000s) | $ | 1,045 | $ | 1,097 | $ | 3,333 | $ | 2,868 | |
SOURCE Pan American Silver Corp.
Contact
Siren Fisekci, VP, Investor Relations & Corporate Communications, Ph: 604-806-3191, Email: ir@panamericansilver.com
