VANCOUVER, British Columbia--(BUSINESS WIRE)-- Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) ("Pan American" or the "Company") reports fourth quarter ("Q4 2023") financial results and audited financial results for the year ended December 31, 2023 ("FY 2023").

"Pan American enters 2024 in a solid financial position with cash and short-term investments totaling $440.9 million and the full $750.0 million available under our undrawn credit facility," said Michael Steinmann, President and Chief Executive Officer. "We expect cash flow generation in 2024 to benefit from a full year contribution of the assets we acquired through the Yamana Gold transaction, improved operations at La Colorada with higher throughput and lower costs in the second half of the year following completion of the new ventilation system, and reduced care and maintenance costs. Strategic initiatives in 2024 include advancing our La Colorada Skarn project, with engagement on long-term development partnerships currently underway, completing a study to optimize the Jacobina operations, and further portfolio rationalization."

"Today we also announced our intention to make a normal course issuer bid to repurchase our common shares when we believe that the market price of our shares, from time to time, may not fully reflect the underlying value of our mining operations, properties and future growth prospects," added Mr. Steinmann.

Q4 2023 and FY 2023 HIGHLIGHTS:

Silver production was 4.8 million ounces in Q4 2023 and 20.4 million ounces in FY 2023. Gold production achieved record levels of 267.8 thousand ounces in Q4 2023 and 882.9 thousand ounces in FY 2023. Silver production was slightly below the guidance range provided in Pan American's news release dated April 27, 2023 (the "2023 Guidance") and gold production was within the 2023 Guidance range.
Record revenue of $669.6 million and $2.3 billion was recorded for Q4 2023 and FY 2023, respectively.
A net loss of $67.8 million, or $0.19 basic loss per share, was recorded for Q4 2023 and a net loss of $104.9 million, or $0.32 basic loss per share, for FY 2023. Pan American finalized the purchase price allocation ("PPA") asset values for the Yamana Gold Inc. ("Yamana") acquisition in Q4 2023. International Financial Reporting Standards ("IFRS") for business acquisitions require that all accounting impacts to earnings from the finalization of PPA asset values be retrospectively recast to prior quarters since the date of the acquisition. As a result, an additional $16.5 million ($0.05 per share) in earnings for the year related to revised depreciation charges for the final PPA asset values must be retroactively applied to Q2 2023 and Q3 2023 rather than applied to Q4 2023 earnings. There is no impact on FY 2023 earnings. In addition, Q4 2023 earnings were impacted by a $36.2 million impairment charge for the crushing and agglomeration plant at Shahuindo, which has never been operated and was built before Pan American acquired the mine in February 2019, and a $13.8 million closure and decommissioning expense, largely due to revised estimates at Alamo Dorado to further bolster waste dump covers and site drainage systems.
Adjusted loss of $16.3 million, or $0.04 basic adjusted loss per share, in Q4 2023. FY 2023 adjusted earnings were $39.3 million, or $0.12 basic adjusted earnings per share. The impact of the impairment charge and closure and decommissioning expense was adjusted from Q4 2023 earnings.
Cash flow generated from operating activities was $167.4 million in Q4 2023 and $450.2 million for FY 2023.
Silver Segment Cash Costs were $19.31 and $13.07 per ounce in Q4 2023 and FY 2023, respectively. Silver Segment all-in sustaining costs ("AISC") were $26.55 and $18.17 per ounce in Q4 2023 and FY 2023, respectively. FY 2023 Silver Segment Cash Costs and AISC were above the 2023 Guidance ranges. The higher costs were largely affected by the ventilation-driven production shortfalls at La Colorada and an increase in underground mine developments at Huaron, partially offset by lower than expected costs at Cerro Moro from higher throughput and higher gold prices, process plant optimizations and organizational enhancements.
Gold Segment Cash Costs were $1,096 and $1,113 per ounce in Q4 2023 and FY 2023, respectively. Gold Segment AISC were $1,411 and $1,371 per ounce in Q4 2023 and FY 2023, respectively. FY 2023 Gold Segment Cash Costs were slightly above the 2023 Guidance range while AISC were within the 2023 Guidance range. The higher than forecast Gold Segment Cash Costs were due to lower than anticipated gold production at El Peñon.
Capital expenditures totaled $429.7 million in 2023, comprised of $288.5 million of sustaining capital, $94.5 million of project capital, which was largely directed to the La Colorada Skarn project and Jacobina, and $46.8 million in non-recurring non-sustaining expenditures largely related to MARA. The new ventilation shaft at La Colorada was fully excavated to a depth of 581 meters on schedule in December 2023. Sustaining and project capital expenditures were both below the 2023 Guidance range.
As at December 31, 2023, the Company had working capital of $765.8 million, inclusive of cash and short-term investments of $440.9 million, and $750.0 million available under its revolving Sustainability-Linked Credit Facility. Total debt of $801.6 million was related to construction and other loans, leases and two senior notes Pan American assumed through the acquisition of Yamana.
A cash dividend of $0.10 per common share has been declared, payable on or about March 15, 2024, to holders of record of Pan American’s common shares as of the close on March 4, 2024. The dividends are eligible dividends for Canadian income tax purposes.
Pan American Silver Announces Intention to Make a Normal Course Issuer Bid

Pan American today announced that its Board of Directors has authorized a normal course issuer bid (the "Bid") to purchase up to 5% of the Company’s issued and outstanding common shares. The Bid is subject to the approval of the Toronto Stock Exchange (the "TSX").

It is expected that the Bid will begin on or around March 6, 2024, and will continue until on or around March 5, 2025, or an earlier date should the Company complete its purchases. All common shares acquired by the Company under the Bid will be cancelled and purchases will be funded out of Pan American’s working capital. Although the Company has a present intention to acquire its common shares pursuant to the Bid, it is not obligated to make any purchases, and the actual number of common shares to be purchased, and the timing of any purchases, will be at the Company’s discretion.

Purchases pursuant to the Bid would be made on the open market through the facilities of the TSX and the New York Stock Exchange (“NYSE”) and alternative trading systems. Pan American will pay the market price at the time of acquisition of any common shares in accordance with the rules and policies of the TSX and NYSE and applicable securities laws.

Pan American believes that the market price of its common shares, from time to time, may not fully reflect the underlying value of its mining operations, properties and future growth prospects. Under such circumstances, the repurchase of common shares represents an appealing investment for Pan American since a portion of the Company’s excess cash generated on an annual basis can be invested for an attractive risk-adjusted return on capital through the Bid.

ILO 169 Consultation for the Escobal Mine

A new government took office in Guatemala in January 2024 and we had our first meeting with the new Minister of Energy and Mines ("MEM") on February 7, 2024. A meeting for the ILO 169 consultation was held on February 21, 2024, with the newly appointed Vice Minister of Energy and Mines and Xinka representatives, during which a presentation on the observations of the Xinka’s appointed consultants was communicated. We look forward to receipt of the report and working with the MEM to ensure accurate information is communicated to the Xinka participating in the consultation process. As usual, we are not providing a timeframe for completion of the consultation or a potential restart of the mine.

Pan American appoints Senior Vice President, Operations and Projects

Pan American is pleased to announce that Scott Campbell has been appointed Senior Vice President, Operations and Projects, effective April 2, 2024. Scott will oversee the Company's operations and lead the Corporate Projects Group, reporting to Pan American's Chief Operating Officer, Steve Busby. Scott was most recently General Manager for Dundee Precious Metals in Ecuador. Previous to that role, he was Pan American’s Vice President of South American Projects from 2018 to 2022, and held senior positions with Barrick Gold Corporation as well as other engineering and exploration companies. Scott earned a bachelor’s degree in Earth Sciences from Dalhousie University in Canada and has completed business and project management programs at various universities.

George Greer, Senior Vice President, Projects, will support Scott in his new position until George retires in June 2024. Pan American extends its best wishes to George for his retirement, and its appreciation for his more than 17 years of distinguished service to the Company. Throughout his career with Pan American, George demonstrated his unwavering commitment to safety, personnel development and efficiently delivering high-quality, "fit-for-purpose" projects that are a hallmark of Pan American's history.

2024 OPERATING OUTLOOK

Pan American provided its operating outlook for 2024 in the news release dated January 17, 2024, as further detailed below and in the Company's Management's Discussion & Analysis for the period ended December 31, 2023.

Pan American reports mines under either a Silver Segment or a Gold Segment with Cash Costs and AISC calculated on a by-product basis; specifically, by-product metal sales are credited against the operating costs to produce the primary metal for that segment.

The following estimates contain forward-looking information about expected future events and financial and operating performance of Pan American. Readers should refer to the risks and assumptions set out in the "Cautionary Note Regarding Forward-Looking Statements and Information" at the end of this news release. Pan American may revise forecasts during the year to reflect actual results to date and those anticipated for the remainder of the year.

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