Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts
Pan American Silver Reports Record Quarterly Cash Flow from Operations of $129.5 Million in Q4 2019
Quarterly Dividend Increased by 43%
All financial figures are in U.S. dollars unless otherwise indicated.
Vancouver, B.C. - February 19, 2020 - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) today reported unaudited financial results for the year-ended December 31, 2019 ("FY 2019") and the fourth quarter ("Q4 2019"). These results are preliminary and could change based on final audited results. Preliminary production results were previously reported on January 15, 2020.
“Strong, low cost production generated operational cash flow of $282 million in 2019, which allowed Pan American to retire $60 million of debt, dividend approximately $29 million to shareholders, invest in new projects such as our La Colorada skarn discovery, and increase our cash position," said Michael Steinmann, President and Chief Executive Officer of the Company. "In 2020, we are expecting silver and gold production growth of approximately 7% and 16%, respectively. Given our business outlook and strong financial position, Pan American's Board of Directors has increased the quarterly dividend by 43% to $0.05 per common share."
Q4 2019 and FY 2019 Highlights:
- Revenue in Q4 2019 and FY 2019 totaled $404.4 million and $1,350.8 million, respectively.
- Net cash generated from operating activities in Q4 2019 of $129.5 million was the highest in the Company's history. Net cash generated from operating activities in FY 2019 was $282.0 million.
- Net earnings in Q4 2019 and FY 2019 were $51.7 million ($0.25 basic earnings per share) and $111.2 million ($0.55 basic earnings per share), respectively. Net earnings in Q4 2019 included a $40.1 million impairment charge related to the Manantial Espejo mine in Argentina due to the increase in export taxes and the challenging business environment in Argentina; partially offset by $33.7 million in investment income, largely related to our approximately 17% equity interest in New Pacific Metals Corp.
- Adjusted earnings in Q4 2019 and FY 2019 were $68.9 million ($0.33 basic adjusted earnings per share) and $158.0 million ($0.78 basic adjusted earnings per share), respectively.
- Consolidated annual silver and gold production was 25.9 million ounces and 559.2 thousand ounces, respectively, as previously disclosed on January 15, 2020.
- Silver Segment Cash Costs and All-in Sustaining Costs ("AISC") in FY 2019 were $6.39 and $10.46 per silver ounce sold, respectively, both of which were within the Company's 2019 annual guidance.
- Gold Segment Cash Costs and AISC in FY 2019 were $712 and $948 per gold ounce sold, respectively, both of which were below the Company's annual guidance for 2019.
- Consolidated Silver Basis AISC in FY 2019 was $4.44 per silver ounce sold, which was well below the Company's 2019 annual guidance range of $6.00 to $7.50 per ounce.
- At December 31, 2019, the Company had a cash and short-term investment balance of $238.3 million and $275.0 million of bank debt. Working capital was $517.2 million.
- In 2019, Pan American paid $29.3 million in dividends ($0.14 per share).
- The Board of Directors has approved an increase in the cash dividend from $0.035 to $0.05 per common share, or approximately $10.5 million in aggregate cash dividends, payable on or about March 12, 2020, to holders of record of Pan American’s common shares as of the close on March 2, 2020. 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.
PAN AMERICAN SILVER CORP. 1
Cash Costs, AISC, adjusted earnings, basic adjusted earnings per share, and working capital 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.
Fourth Quarter and Year End 2019 Unaudited Results Conference Call and Webcast
Date: February 20, 2020 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)
Webcast: panamericansilver.com
Callers should dial in 5 to 10 minutes prior to the scheduled start time. The live webcast and presentation slides will be available on the Company's website at panamericansilver.com. An archive of the webcast will also be available for three months.
PAN AMERICAN SILVER CORP. 2
CONSOLIDATED RESULTS
| December 31, 2019 | December 31, 2018 | |
|---|---|---|
| Weighted average shares during period (millions) Shares outstanding end of period (millions) | 201.4 | 153.3 153.4 |
| 209.8 |
Three months ended Year ended December 31, December 31,
| 2019 | 2018 | 2019 | 2018 | |
| FINANCIAL Revenue Mine operating earnings (loss) Net earnings (loss) Basic earnings (loss) per share (1) Adjusted earnings (loss) (2) Basic adjusted earnings (loss) per share (1) Net cash generated from operating activities Net cash generated from operating activities before changes in working capital (2) Sustaining capital expenditures Project capital expenditures Cash dividend per share | $ 173,357 $ (4,666) $ (63,577) $ (0.42) $ (2,022) $ (0.01) $ 11,930 $ 16,827 $ 31,150 $ 13,151 $ 0.035 | $ 784,495 $ 100,897 $ 12,041 $ 0.07 $ 59,434 $ 0.39 $ 154,978 $ 159,239 $ 106,913 $ 44,702 $ 0.140 | ||
| $ 404,379 | $ 1,350,759 | |||
| $ 98,610 | $ 229,288 | |||
| $ 51,706 | $ 111,244 | |||
| $ 0.25 | $ 0.55 | |||
| $ 68,908 | $ 157,987 | |||
| $ 0.33 | $ 0.78 | |||
| $ 129,473 | $ 282,028 | |||
| $ 124,727 | $ 309,972 | |||
| $ 46,187 | $ 179,096 | |||
| $ 9,504 | $ 43,627 | |||
| $ 0.035 | $ 0.140 | |||
| PRODUCTION Silver (thousand ounces) Gold (thousand ounces) Zinc (thousand tonnes) Lead (thousand tonnes) Copper (thousand tonnes) | 6,127 37.2 18.5 6.3 2.2 | 24,775 178.9 64.8 22.4 9.8 | ||
| 6,622 | 25,886 | |||
| 173.9 | 559.2 | |||
| 16.6 | 67.6 | |||
| 7.2 | 27.3 | |||
| 2.3 | 8.7 | |||
| CASH COSTS (2) ($/ounce) Silver Segment Gold Segment | 5.82 n/a | 3.36 n/a | ||
| 7.80 | 6.39 | |||
| 693 | 712 | |||
| AISC (2) ($/ounce) Silver Segment Gold Segment Consolidated Silver Basis | 14.69 n/a 16.19 | 9.48 n/a 10.77 | ||
| 11.37 | 10.46 | |||
| 901 | 948 | |||
| 1.04 | 4.44 | |||
| Average realized prices Silver ($/ounce)(3) Gold ($/ounce)(3) Zinc ($/tonne)(3) Lead ($/tonne)(3) Copper ($/tonne)(3) | 14.35 1,232 2,508 1,914 6,098 | 15.61 1,272 2,846 2,189 6,519 | ||
| 17.84 | 16.34 | |||
| 1,479 | 1,406 | |||
| 2,325 | 2,535 | |||
| 2,078 | 1,997 | |||
| 5,840 | 5,973 |
(1) Per share amounts are based on basic weighted average common shares.
(2) Non- GAAP measures: Cash Costs, All-in Sustaining Costs (AISC), adjusted earnings, basic adjusted earnings per share, and net cash generated from operating activities before changes in working capital are non-GAAP financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures.
(3) Metal prices stated are inclusive of final settlement adjustments on concentrate sales.
PAN AMERICAN SILVER CORP. 3
2019 Annual Results Compared to 2019 Forecast
The Company's 2019 annual production, Cash Costs, AISC and capital expenditures compared to Management's most recent annual forecast amounts are as follows:
| 2019 Actual | Forecast Range (1) | |
| Production Silver (million ounces) Gold (thousand ounces) Zinc (thousand tonnes) Lead (thousand tonnes) Copper (thousand tonnes) | 25.3 - 26.3 550.0 - 600.0 65.0 - 67.0 24.0 - 25.0 9.8 - 10.3 | |
| 25.9 | ||
| 559.2 | ||
| 67.6 | ||
| 27.3 | ||
| 8.7 | ||
| Cash Costs(2) ($/ounce) Silver Segment Gold Segment Consolidated Silver Basis | 6.00 - 7.00 725 - 775 (5.50) - (3.80) | |
| 6.39 | ||
| 712 | ||
| (4.89) | ||
| AISC(2) ($/ounce) Silver Segment Gold Segment Consolidated Silver Basis | 9.50 - 11.00 1,000 - 1,100 6.00 - 7.50 | |
| 10.46 | ||
| 948 | ||
| 4.44 | ||
| Capital Expenditures ($ millions) Sustaining Capital Project Capital Total Capital | 203.0 - 213.0 45.0 248.0 - 258.0 | |
| 179.1 | ||
| 43.6 | ||
| 222.7 |
(1) Forecast amounts represent Management's most recent annual forecasts made or reaffirmed in the Company's Management Discussion and Analysis (MD&A) for the third quarter of 2019, dated November 6, 2019.
(2) Cash Costs and AISC are non-GAAP measures. Please refer to the section “Alternative Performance (Non-GAAP) Measures” of this news release for a detailed description of these measures and where appropriate a reconciliation.
PAN AMERICAN SILVER CORP. 4
Consolidated Statements of Financial Position
| December 31, 2019 | December 31, 2018 | |
|---|---|---|
| Assets Current assets Cash and cash equivalents Short-term investments Trade and other receivables Income taxes receivable Inventories Derivative financial instruments Prepaid expenses and other current assets | $ 138,510 74,004 96,091 13,108 214,465 640 11,556 | |
| $ 120,564 | ||
| 117,776 | ||
| 168,753 | ||
| 17,209 | ||
| 346,507 | ||
| 1,272 | ||
| 16,838 | ||
| Non-current assets Mineral properties, plant and equipment Inventories Long-term refundable tax Deferred tax assets Investment in associates Goodwill & other assets | 788,919 | 548,374 1,301,002 — 70 12,244 70,566 5,220 |
| 2,504,901 | ||
| 24,209 | ||
| 17,900 | ||
| 36,447 | ||
| 84,319 | ||
| 4,987 | ||
| Total Assets | $ 3,461,682 | $ 1,937,476 |
| Liabilities Current liabilities Accounts payable and accrued liabilities Derivative financial instruments Current portion of provisions Current portion of lease obligations Income tax payable | $ 131,743 51 5,072 5,356 8,306 | |
| $ 225,330 | ||
| — | ||
| 7,372 | ||
| 14,198 | ||
| 24,770 | ||
| Non-current liabilities Long-term portion of provisions Deferred tax liabilities Long-term portion of lease obligations Debt Deferred revenue Other long-term liabilities Share purchase warrants | 271,670 | 150,528 70,083 148,819 1,320 — 13,288 25,425 14,664 |
| 188,012 | ||
| 176,808 | ||
| 27,010 | ||
| 275,000 | ||
| 12,542 | ||
| 27,754 | ||
| 15,040 | ||
| Total Liabilities | 993,836 | 424,127 |
| Equity Capital and reserves Issued capital Reserves Investment revaluation reserve Deficit | 2,321,498 22,573 208 (836,067) | |
| 3,123,514 | ||
| 94,274 | ||
| — | ||
| (754,689) | ||
| Total Equity attributable to equity holders of the Company | 2,463,099 | 1,508,212 |
| Non-controlling interests | 4,747 | 5,137 |
| Total Equity | 2,467,846 | 1,513,349 |
| Total Liabilities and Equity | $ 3,461,682 | $ 1,937,476 |
PAN AMERICAN SILVER CORP. 5
Consolidated Income Statements (Unaudited in thousands of U.S. dollars except per share amounts)
| 2019 | 2018 | 2019 (1) | 2018 | |
| Revenue | $ 404,379 | $ 173,357 | $ 1,350,759 | $ 784,495 |
| Cost of sales Production costs Depreciation and amortization Royalties | (136,177) (37,245) (4,601) | (515,636) (147,289) (20,673) | ||
| (229,594) | (841,297) | |||
| (68,239) | (253,453) | |||
| (7,936) | (26,721) | |||
| (305,769) | (178,023) | (1,121,471) | (683,598) | |
| Mine operating earnings (loss) General and administrative Exploration and project development Mine care and maintenance Foreign exchange gains (losses) Impairment charges Gains on commodity and foreign currency contracts Gains (losses) on sale of mineral properties, plant and equipment Share of income (loss) from associate and dilution gain Transaction and integration costs Other expense | 98,610 | (4,666) (5,450) (3,509) — 406 (27,789) 524 (56) (182) (10,229) (2,795) | 229,288 | 100,897 (22,649) (11,138) — (9,326) (27,789) 4,930 7,973 13,679 (10,229) (3,659) |
| (10,009) | (31,752) | |||
| (2,562) | (11,684) | |||
| (8,008) | (23,662) | |||
| 2,970 | (5,003) | |||
| (40,050) | (40,050) | |||
| 1,564 | 3,315 | |||
| 1,040 | 3,858 | |||
| 14,246 | 15,245 | |||
| 197 | (7,515) | |||
| (5,754) | (4,936) | |||
| Earnings (loss) from operations Loss on derivatives Investment income (loss) Interest and finance expense | 52,244 | (53,746) (60) (1,428) (2,305) | 127,104 | 42,689 (1,078) (284) (8,139) |
| — | (14) | |||
| 33,741 | 84,704 | |||
| (8,327) | (29,282) | |||
| Earnings (loss) before income taxes Income tax expense | 77,658 | (57,539) (6,038) | 182,512 | 33,188 (21,147) |
| (25,952) | (71,268) | |||
| Net earnings (loss) for the period Attributable to: Equity holders of the Company Non-controlling interests | $ 51,706 | $ (63,577) (63,809) 232 | $ 111,244 | $ 12,041 10,294 1,747 |
| 51,927 | 110,738 | |||
| (221) | 506 | |||
| $ 51,706 | $ (63,577) | $ 111,244 | $ 12,041 | |
| Earnings (loss) per share attributable to common shareholders Basic earnings (loss) per share Diluted earnings (loss) per share Weighted average shares outstanding (in 000’s) Basic Weighted average shares outstanding (in 000’s) Diluted | $ (0.42) $ (0.42) 153,352 153,504 | $ 0.07 $ 0.07 153,315 153,522 | ||
| $ 0.25 | $ 0.55 | |||
| $ 0.25 | $ 0.55 | |||
| 209,671 | 201,397 | |||
| 209,873 | 201,571 |
(1) The purchase price allocation (“PPA") for the Tahoe acquisition was finalized in Q4 2019, and the previously reported $30.5 million bargain purchase gain was removed from 2019 net income; as such, net income for the three months ended March 31, 2019 (“Q1 2019”) will be restated to reflect this $30.5 million reduction to previously reported Q1 2019 net income.
PAN AMERICAN SILVER CORP. 6
Consolidated Statements of Comprehensive Income
| 2019 | 2018 | 2019 |
| $ 51,706 | $ (63,577) 332 (294) | $ 111,244 |
| — | — | |
| — | (208) | |
| $ 51,706 | $ (63,539) | $ 111,036 |
| $ (63,771) 232 | ||
| $ 51,927 | $ 110,530 | |
| (221) | 506 | |
| $ 51,706 | $ (63,539) | $ 111,036 |
2018 Net earnings (loss) for the period $ 12,041 Items that may be reclassified subsequently to net earnings:
Unrealized net gains on short-term investments (net of $nil tax in 2019 and 2018)
Reclassification adjustment for realized gains on short-term (788) investments to earnings Total comprehensive earnings (loss) for the period $ 12,246
Total comprehensive earnings (loss) attributable to:
Equity holders of the Company $ 10,499 Non-controlling interests 1,747 $ 12,246
PAN AMERICAN SILVER CORP. 7
Consolidated Statements of Cash Flows
| 2019 | 2018 | 2019 | 2018 | |
| Cash flow from operating activities Net earnings (loss) for the period Current income tax expense Deferred income tax recovery Interest expense (recovery) Depreciation and amortization Impairment charges Accretion on closure and decommissioning provision Unrealized foreign exchange (gains) losses (Gain) loss on sale of mineral properties, plant and equipment Other operating activities Changes in non-cash operating working capital | $ (63,577) 9,999 (3,961) 117 37,245 27,789 1,631 (348) 56 19,824 (4,897) | $ 12,041 53,901 (32,754) (678) 147,289 27,789 6,524 10,337 (7,973) 17,724 (4,261) | ||
| $ 51,706 | $ 111,244 | |||
| 36,433 | 92,129 | |||
| (10,481) | (20,861) | |||
| 4,762 | 16,879 | |||
| 68,239 | 253,453 | |||
| 40,050 | 40,050 | |||
| 2,583 | 9,903 | |||
| (1,395) | 6,057 | |||
| (1,040) | (3,858) | |||
| (47,630) | (96,277) | |||
| 4,746 | (27,944) | |||
| Operating cash flows before interest and income taxes Interest paid Interest received Income taxes paid | $ 147,973 | $ 23,878 (417) 561 (12,092) | $ 380,775 | $ 229,939 (1,684) 1,944 (75,221) |
| (4,038) | (16,944) | |||
| 75 | 776 | |||
| (14,537) | (82,579) | |||
| Net cash generated from operating activities | $ 129,473 | $ 11,930 | $ 282,028 | $ 154,978 |
| Cash flow from investing activities Payments for mineral properties, plant and equipment Tahoe acquisition (1) Acquisition of mineral interests Net (purchase of) proceeds from sale of short-term investments Proceeds from sale of mineral properties, plant and equipment Net proceeds from commodity, diesel fuel swaps, and foreign currency contracts | $ (42,302) — — (10,020) 4 1,289 | $ (144,348) — (7,500) (25,554) 15,781 2,449 | ||
| $ (50,319) | $ (205,807) | |||
| — | (247,479) | |||
| — | (1,545) | |||
| (1,849) | 39,727 | |||
| 103 | 10,267 | |||
| 518 | 2,669 | |||
| Net cash used in investing activities | $ (51,547) | $ (51,029) | $ (402,168) | $ (159,172) |
| Cash flow from financing activities Proceeds from issue of equity shares Distributions to non-controlling interests Dividends paid Proceeds from credit facility Repayment of credit facility Repayment of short-term loans Payment of lease obligations | $ — (1,158) (5,366) — — — (2,223) | $ 1,081 (2,020) (21,284) — — (3,000) (7,911) | ||
| $ 1,171 | $ 2,781 | |||
| (10) | (924) | |||
| (7,337) | (29,332) | |||
| — | 335,000 | |||
| (40,000) | (185,000) | |||
| — | — | |||
| (5,726) | (19,270) | |||
| Net cash (used in) generated from financing activities | $ (51,902) | $ (8,747) | $ 103,255 | $ (33,134) |
| Effects of exchange rate changes on cash and cash equivalents | (173) | (68) | (1,061) | (115) |
| Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period | 25,851 | (47,914) 186,424 | (17,946) | (37,443) 175,953 |
| 94,713 | 138,510 | |||
| Cash and cash equivalents at the end of the period | $ 120,564 | $ 138,510 | $ 120,564 | $ 138,510 |
(1) On February 22, 2019, the Company completed the acquisition of 100% of the issued and outstanding shares of Tahoe Resources Inc. ("Tahoe"). The cash invested represents consideration paid to Tahoe shareholders of $275 million net of cash received.
PAN AMERICAN SILVER CORP. 8
INDIVIDUAL MINE OPERATION RESULTS
The operating metrics, Cash Costs, AISC, and sustaining capital cash outflows for each of the Company's operating mines for the three and twelve months ending December 31, 2019, and 2018, are included in the following tables. Cash Costs and AISC are non-GAAP financial measures that do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. A detailed description and reconciliation of these measures to cost of sales is included in the "Alternative Performance (Non- GAAP) Measures" section of this news release.
La Colorada mine
Three months ended Year ended December 31, December 31,
| Tonnes milled - kt Average silver grade – grams per tonne Average zinc grade - % Average lead grade - % | 2019 | 2018 | 2019 | 2018 |
| 197.1 | 187.4 375 3.10 1.50 | 768.7 | 726.0 358 2.83 1.40 | |
| 358 | 361 | |||
| 2.85 | 3.10 | |||
| 1.70 | 1.65 | |||
| Production: Silver – koz Gold – koz Zinc – kt Lead – kt | 2,074 1.16 5.09 2.44 | 7,617 4.40 17.79 8.84 | ||
| 2,080 | 8,206 | |||
| 1.28 | 4.61 | |||
| 4.85 | 20.97 | |||
| 2.92 | 11.15 | |||
| Cash cost per ounce net of by-products Sustaining capital - (’000s) AISC Payable silver sold - koz | $ 4.30 | $ 2.46 $ 5,364 $ 5.93 1,780 | $ 2.99 | $ 2.26 $ 15,462 $ 4.63 7,069 |
| $ 1,957 | $ 9,721 | |||
| $ 5.80 | $ 4.54 | |||
| 1,770 | 7,583 |
Dolores mine
Three months ended Year ended December 31, December 31,
| Tonnes placed - kt Average silver grade – grams per tonne Average gold grade – grams per tonne | 2019 | 2018 | 2019 | 2018 |
| 1,856.7 | 1,818.5 25 0.68 | 6,777.0 | 6,903.3 31 0.85 | |
| 42 | 38 | |||
| 0.62 | 0.60 | |||
| Production: Silver – koz Gold – koz | 824 29.4 | 4,081 136.6 | ||
| 1,287 | 5,122 | |||
| 26.1 | 117.6 | |||
| Cash cost per ounce net of by-products Sustaining capital - (’000s) AISC Payable silver sold - koz | $ 2.64 | $ 6.30 $ 13,255 $ 35.36 870 | $ 3.09 | $ (1.81) $ 48,842 $ 16.36 4,205 |
| $ 8,106 | $ 49,660 | |||
| $ 9.33 | $ 15.45 | |||
| 1,402 | 4,924 |
PAN AMERICAN SILVER CORP. 9
Huaron mine
| Tonnes milled - kt Average silver grade – grams per tonne Average zinc grade - % Average lead grade - % Average copper grade - % | 2019 | 2018 | 2019 | 2018 |
| 252.3 | 252.0 142 2.49 1.22 0.78 | 994.0 | 935.0 142 2.44 1.18 0.76 | |
| 140 | 142 | |||
| 2.49 | 2.38 | |||
| 1.32 | 1.22 | |||
| 0.85 | 0.81 | |||
| Production: Silver – koz Gold – koz Zinc – kt Lead – kt Copper – kt | 965 0.22 4.82 2.16 1.52 | 3,561 0.79 17.38 8.05 5.44 | ||
| 935 | 3,796 | |||
| 0.21 | 0.97 | |||
| 4.95 | 18.07 | |||
| 2.50 | 9.22 | |||
| 1.57 | 6.02 | |||
| Cash cost per ounce net of by-products Sustaining capital cash outflows - (’000s) AISC Payable silver sold – koz | $ 5.34 | $ 2.42 $ 6,099 $ 9.71 858 | $ 4.15 | $ 1.79 $ 17,761 $ 7.95 3,094 |
| $ 2,834 | $ 10,936 | |||
| $ 9.44 | $ 7.74 | |||
| 736 | 3,253 |
Morococha mine(1)
Three months ended Year ended December 31, December 31,
| Tonnes milled – kt Average silver grade – grams per tonne Average zinc grade - % Average lead grade - % Average copper grade - % | 2019 | 2018 | 2019 | 2018 |
| 176.5 | 163.0 154 4.02 1.09 0.44 | 686.2 | 672.0 149 3.80 0.92 0.66 | |
| 112 | 126 | |||
| 3.55 | 3.76 | |||
| 1.17 | 1.21 | |||
| 0.44 | 0.44 | |||
| Production: Silver – koz Gold – koz Zinc – kt Lead – kt Copper – kt | 740 0.19 5.78 1.40 0.45 | 2,881 2.09 22.17 4.69 3.30 | ||
| 554 | 2,456 | |||
| 0.23 | 1.39 | |||
| 5.46 | 22.50 | |||
| 1.61 | 6.56 | |||
| 0.46 | 1.83 | |||
| Cash cost per ounce net of by-products Sustaining capital (100%) - (’000s) AISC Payable silver sold (100%) - koz | $ 10.85 | $ (0.58) $ 4,357 $ 6.19 674 | $ 4.35 | $ (4.43) $ 15,038 $ 1.59 2,652 |
| $ 3,945 | $ 12,599 | |||
| $ 18.83 | $ 10.08 | |||
| 515 | 2,335 |
(1) Production figures are for Pan American’s 92.3% share only, unless otherwise noted.
PAN AMERICAN SILVER CORP. 10
San Vicente mine(1)
| Tonnes milled – kt Average silver grade – grams per tonne Average zinc grade - % Average lead grade - % Average copper grade - % | 2019 | 2018 | 2019 | 2018 |
| 91.1 | 88.3 372 3.66 0.32 0.37 | 349.7 | 332.9 362 2.77 0.34 0.40 | |
| 328 | 345 | |||
| 1.80 | 2.16 | |||
| 0.15 | 0.14 | |||
| 0.30 | 0.31 | |||
| Production: Silver – koz Gold – koz Zinc – kt Lead – kt Copper – kt | 937 0.12 2.82 0.26 0.22 | 3,544 0.50 7.47 0.78 1.02 | ||
| 877 | 3,528 | |||
| 0.13 | 0.48 | |||
| 1.31 | 6.01 | |||
| 0.13 | 0.42 | |||
| 0.22 | 0.85 | |||
| Cash cost per ounce net of by-products Sustaining capital (100%) - (’000s) AISC Payable silver sold (100%) - koz | $ 14.38 | $ 10.20 $ 1,637 $ 13.59 502 | $ 11.77 | $ 9.83 $ 6,983 $ 12.20 3,054 |
| $ 2,048 | $ 4,960 | |||
| $ 16.50 | $ 13.08 | |||
| 1,001 | 4,003 |
(1) Production figures are for Pan American’s 95.0% share only, unless otherwise noted.
Manantial Espejo mine
Three months ended Year ended December 31, December 31,
| Tonnes milled - kt Average silver grade – grams per tonne Average gold grade – grams per tonne | 2019 | 2018 | 2019 | 2018 |
| 186.5 | 198.5 95 0.98 | 708.6 | 804.4 135 1.42 | |
| 150 | 127 | |||
| 1.21 | 1.08 | |||
| Production: Silver – koz Gold – koz | 587 6.19 | 3,092 34.55 | ||
| 817 | 2,599 | |||
| 6.71 | 22.41 | |||
| Cash cost per ounce net of by-products Sustaining capital - (’000s) AISC Payable silver sold - koz | $ 15.47 | $ 23.03 $ 436 $ 27.94 615 | $ 19.59 | $ 14.83 $ 2,827 $ 16.83 3,086 |
| $ 696 | $ 2,757 | |||
| $ 16.94 | $ 18.43 | |||
| 928 | 2,460 |
PAN AMERICAN SILVER CORP. 11
Gold Segment Mines
Three months ended Year ended December 31, 2019 December 31, 2019
| Tonnes milled - kt Average silver grade – grams per tonne Average gold grade – grams per tonne | Shahuindo | La Arena | Timmins(1) | Shahuindo | La Arena | Timmins(1) |
|---|---|---|---|---|---|---|
| 3,449.4 | 5,311.8 | 473.9 | 11,218.8 | 11,189.7 | 1,480.7 | |
| 7 | — | — | 8 | — | — | |
| 0.58 | 0.41 | 3.17 | 0.60 | 0.41 | 3.18 | |
| Production: Silver – koz Gold – koz | ||||||
| 54.21 | 10.81 | 5.53 | 136.62 | 26.16 | 17.53 | |
| 43.52 | 48.43 | 47.33 | 145.37 | 122.52 | 143.77 | |
| Cash cost per ounce net of by-products Sustaining capital - (’000s) AISC Payable gold sold - koz | $ 605 | $ 580 | $ 884 | $ 570 | $ 644 | $ 904 |
| $ 14,156 | $ 8,382 | $ 4,066 | $ 29,873 | $ 47,557 | $ 11,035 | |
| $ 970 | $ 764 | $ 984 | $ 807 | $ 1,042 | $ 998 | |
| 39.85 | 48.06 | 46.40 | 133.30 | 124.21 | 143.30 |
(1) Timmins refers to the Timmins West and Bell Creek mines.
ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES Per Ounce Measures
Cash Costs and AISC are non-GAAP financial measures that do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.
Pan American produces by-product metals incidentally to our silver and gold mining activities. We have adopted the practice of calculating a performance measure with the net cost of producing an ounce of silver and gold, our primary payable metals, after deducting revenues gained from incidental by-product production. 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.
Silver segment Cash Costs and AISC are calculated net of credits for realized revenues from all metals other than silver ("silver segment by-product credits"), and are calculated per ounce of silver sold. Gold segment Cash Costs and AISC are calculated net of credits for realized silver revenues ("gold segment by-product credits"), and are calculated per ounce of gold sold. Consolidated Cash Costs and AISC are based on total silver ounces sold and are net of by-product credits from all metals other than silver ("silver basis consolidated by-product credits").
Prior period cash costs per ounce reported in previous news releases and MD&As were based on cash costs per ounce of payable silver produced and were net of by-product credits calculated with average market prices applied to all metals produced other than silver. Given the increased complexity of the business with the addition of the new gold operations, the Company determined that conforming the calculation of Cash Costs with a consistent method to that used for AISC, using realized by-product sales as by-product credits and based on per ounce of silver sold, would provide a more consistent per-ounce measure; as such, the comparative Cash Costs amounts in this MD&A have been quantified using the current methodology and are different from those previously reported. As shown in the detailed quantification of consolidated AISC below, corporate general and administrative expense, and exploration and project development expenses are included in the calculation of consolidated (silver basis) AISC, but are not allocated amongst the operations and thus are not included in either the silver or gold segment AISC totals. In prior years these costs were similarly included only in the consolidated all-in-sustaining costs per silver ounce sold ("AISCSOS") metrics and not allocated to each mine's AISCSOS amount; as such, consolidated AISCSOS in previous years included such costs, where total silver segment AISC in the current period does not. A
PAN AMERICAN SILVER CORP. 12