
Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) reported audited financial results for the year ended December 31, 2020 and the fourth quarter. Preliminary production results were previously reported on January 19, 2021. Pan American’s audited consolidated financial statements, as well as Pan American’s Management’s Discussion and Analysis for the three and twelve months ended December 31, 2020, and the Company’s Annual Information Form for the year ended December 31, 2020, are available on Pan American’s website at panamericansilver.com and on SEDAR at www.sedar.com.
“Pan American delivered strong financial performance in 2020, generating a record $462.3 million in operating cash flow, which enabled us to fully repay all bank debt, double our quarterly dividend to shareholders, and grow our cash balance at year end,” said Michael Steinmann, President and Chief Executive Officer. “Our operating teams helped deliver these strong results despite the exceptional challenges presented by the COVID-19 pandemic. We continue to support our workforce and communities during this difficult time, and look forward to the deployment of vaccination programs during 2021.”
Q4 2020 and FY 2020 Highlights:
(1) | Due to the uncertainties regarding the impact of COVID-19 on our operations, in May 2020, the Company withdrew its 2020 annual production, Cash Costs, AISC and capital expenditure forecasts, as provided in the 2019 annual MD&A dated March 12, 2020 (the “Original 2020 Forecasts”). The Company subsequently issued a new 2020 annual forecast on August 5, 2020 (the “August 2020 Forecast”). On November 4, 2020, management further revised forecasts for 2020 annual silver production and capital expenditures (the “Revised 2020 Forecast”). |
Cash Costs, AISC, adjusted earnings, basic adjusted earnings per share, sustaining capital, project capital, working capital, total debt, and total available liquidity 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 RESULTS
December 31, 2020 |
December 31, 2019 |
||||||||||||
Weighted average shares during period (millions) | 210.1 | 201.4 | |||||||||||
Shares outstanding end of period (millions) | 210.3 | 209.8 | |||||||||||
Three months ended December 31, |
Year ended December 31, |
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2020 | 2019 | 2020 | 2019 | ||||||||||
FINANCIAL | |||||||||||||
Revenue | $ | 430,461 | $ | 404,379 | $ | 1,338,812 | $ | 1,350,759 | |||||
Mine operating earnings | $ | 137,172 | $ | 98,610 | $ | 360,177 | $ | 229,288 | |||||
Net earnings | $ | 169,018 | $ | 51,706 | $ | 176,455 | $ | 111,244 | |||||
Basic earnings per share(1) | $ | 0.80 | $ | 0.25 | $ | 0.85 | $ | 0.55 | |||||
Adjusted earnings(2) | $ | 120,488 | $ | 68,908 | $ | 243,382 | $ | 157,987 | |||||
Basic adjusted earnings (loss) per share(1) | $ | 0.57 | $ | 0.33 | $ | 1.16 | $ | 0.78 | |||||
Net cash generated from operating activities | $ | 170,571 | $ | 129,473 | $ | 462,315 | $ | 282,028 | |||||
Net cash generated from operating activities before changes in working capital(2) |
$ | 151,995 | $ | 124,727 | $ | 365,333 | $ | 309,972 | |||||
Sustaining capital expenditures | $ | 52,007 | $ | 46,187 | $ | 162,047 | $ | 179,096 | |||||
Project capital expenditures | $ | 3,753 | $ | 9,578 | $ | 21,545 | $ | 44,734 | |||||
Cash dividend per share | $ | 0.070 | $ | 0.035 | $ | 0.220 | $ | 0.140 | |||||
PRODUCTION | |||||||||||||
Silver (thousand ounces) | 4,872 | 6,622 | 17,312 | 25,886 | |||||||||
Gold (thousand ounces) | 152.9 | 173.9 | 522.4 | 559.2 | |||||||||
Zinc (thousand tonnes) | 14.2 | 16.6 | 40.2 | 67.6 | |||||||||
Lead (thousand tonnes) | 5.4 | 7.2 | 15.7 | 27.3 | |||||||||
Copper (thousand tonnes) | 2.3 | 2.3 | 5.2 | 8.7 | |||||||||
CASH COSTS(2) ($/ounce) | |||||||||||||
Silver Segment | 6.15 | 7.80 | 7.05 | 6.39 | |||||||||
Gold Segment | 763 | 693 | 797 | 712 | |||||||||
AISC(2) ($/ounce) | |||||||||||||
Silver Segment | 10.37 | 11.37 | 11.38 | 10.46 | |||||||||
Gold Segment | 1,023 | 901 | 1,011 | 948 | |||||||||
Consolidated Silver Basis | (7.28) | 1.04 | (3.29) | 4.44 | |||||||||
AVERAGE REALIZED PRICES(3) | |||||||||||||
Silver ($/ounce) | 24.72 | 17.84 | 20.60 | 16.34 | |||||||||
Gold ($/ounce) | 1,874 | 1,479 | 1,758 | 1,406 | |||||||||
Zinc ($/tonne) | 2,566 | 2,325 | 2,288 | 2,535 | |||||||||
Lead ($/tonne) | 1,922 | 2,078 | 1,851 | 1,997 | |||||||||
Copper ($/tonne) | 7,234 | 5,840 | 6,412 | 5,973 | |||||||||
(1) | Per share amounts are based on basic weighted average common shares. | ||||||||||||
(2) | Non- GAAP measures: cash costs, AISC, adjusted earnings, basic adjusted earnings per share, and net cash generated from operating activities before changes in working capital are non-GAAP financial measures. Please refer to the “Alternative Performance (non-GAAP) Measures” section of this news release for further information on these measures. | ||||||||||||
(3) | Metal prices stated are inclusive of final settlement adjustments on concentrate sales. |
INDIVIDUAL MINE OPERATION PERFORMANCE
Silver Production (ounces ‘000s) |
Gold Production (ounces ‘000s) |
|||||
Three months ended December 31, |
Three months ended December 31, |
|||||
2020 | 2019 | 2020 | 2019 | |||
Silver Segment: | ||||||
La Colorada | 1,186 | 2,080 | 0.8 | 1.3 | ||
Dolores | 764 | 1,287 | 30.5 | 26.1 | ||
Huaron | 892 | 935 | 0.3 | 0.2 | ||
Morococha(1) | 527 | 554 | 0.2 | 0.2 | ||
San Vicente(2) | 663 | 877 | 0.1 | 0.1 | ||
Manantial Espejo | 742 | 817 | 8.0 | 6.7 | ||
Gold Segment: | ||||||
Shahuindo | 83 | 54 | 33.6 | 43.5 | ||
La Arena | 11 | 11 | 41.4 | 48.4 | ||
Timmins | 4 | 6 | 38.1 | 47.3 | ||
Total(3) | 4,872 | 6,622 | 152.9 | 173.9 | ||
(1) | Morococha data represents Pan American 92.3% interest in the mine’s production. | |||||
(2) | San Vicente data represents Pan American 95.0% interest in the mine’s production. | |||||
(3) | Totals may not add due to rounding. | |||||
Cash Costs(1)
($ per ounce) |
AISC(1)
($ per ounce) |
||||||||
Three months ended December 31, |
Three months ended December 31, |
||||||||
2020 | 2019 | 2020 | 2019 | ||||||
La Colorada | 7.07 | 4.30 | 11.78 | 5.80 | |||||
Dolores | (9.79) | 2.64 | (2.17) | 9.33 | |||||
Huaron | 2.03 | 5.34 | 3.35 | 9.44 | |||||
Morococha | 11.85 | 10.85 | 18.29 | 18.83 | |||||
San Vicente | 17.67 | 14.38 | 20.89 | 16.50 | |||||
Manantial Espejo | 18.72 | 15.47 | 19.24 | 16.94 | |||||
Silver Segment Consolidated(2) | 6.15 | 7.80 | 10.37 | 11.37 | |||||
Shahuindo | 619 | 605 | 842 | 970 | |||||
La Arena | 556 | 580 | 873 | 764 | |||||
Timmins | 1,126 | 884 | 1,355 | 984 | |||||
Gold Segment Consolidated(2) | 763 | 693 | 1,023 | 901 | |||||
Consolidated Silver Basis(3) | (7.28) | 1.04 | |||||||
Consolidated Silver Basis, before net realizable value inventory adjustments(3) | (5.85) | 0.96 | |||||||
(1) | Cash costs and AISC are non-GAAP measures. See the section “Alternative Performance (Non-GAAP) Measures” of the MD&A for the period ended December 31, 2020 for a detailed description of these measures and where appropriate a reconciliation of the measure to the Q4 2020 Financial Statements. | ||||||||
(2) | Silver segment cash costs and AISC are calculated net of credits for realized revenues from all metals other than silver and are calculated per ounce of silver sold. Gold segment cash costs and AISC are calculated net of credits for realized silver revenues and are calculated per ounce of gold sold. Corporate general and administrative expense, and exploration and project development expense are included in consolidated (silver basis) AISC, but are not allocated amongst the operations and thus are not included in either the silver or gold segment consolidated amounts. | ||||||||
(3) | Consolidated silver basis is calculated by treating all revenues from metals other than silver, including gold, as a by-product credit. | ||||||||
Silver Production (ounces ‘000s) |
Gold Production (ounces ‘000s) |
|||||
Twelve months ended December 31, |
Twelve months ended December 31, |
|||||
2020 | 2019 | 2020 | 2019 | |||
Silver Segment: | ||||||
La Colorada | 5,025 | 8,206 | 3.5 | 4.6 | ||
Dolores | 3,779 | 5,122 | 98.0 | 117.6 | ||
Huaron | 2,148 | 3,796 | 0.5 | 1.0 | ||
Morococha(1) | 1,173 | 2,456 | 0.6 | 1.4 | ||
San Vicente(2) | 2,320 | 3,528 | 0.3 | 0.5 | ||
Manantial Espejo | 2,547 | 2,599 | 23.4 | 22.4 | ||
Gold Segment: | ||||||
Shahuindo | 268 | 137 | 142.4 | 145.4 | ||
La Arena | 33 | 26 | 105.4 | 122.5 | ||
Timmins | 18 | 18 | 148.4 | 143.8 | ||
Total(3) | 17,312 | 25,886 | 522.4 | 559.2 | ||
(1) | Morococha data represents Pan American 92.3% interest in the mine’s production. | |||||
(2) | San Vicente data represents Pan American 95.0% interest in the mine’s production. | |||||
(3) | Totals may not add due to rounding. | |||||
Cash Costs(1)
($ per ounce) |
AISC(1)
($ per ounce) |
||||||||
Twelve months ended December 31, |
Twelve months ended December 31, |
||||||||
2020 | 2019 | 2020 | 2019 | ||||||
La Colorada | 6.99 | 2.99 | 10.80 | 4.54 | |||||
Dolores | (2.48) | 3.09 | 6.17 | 15.45 | |||||
Huaron | 3.77 | 4.15 | 6.53 | 7.74 | |||||
Morococha | 11.40 | 4.35 | 18.38 | 10.08 | |||||
San Vicente | 15.54 | 11.77 | 17.94 | 13.08 | |||||
Manantial Espejo | 15.68 | 19.59 | 15.80 | 18.43 | |||||
Silver Segment Consolidated(2) | 7.05 | 6.39 | 11.38 | 10.46 | |||||
Shahuindo | 588 | 570 | 750 | 807 | |||||
La Arena | 721 | 644 | 1,109 | 1,042 | |||||
Timmins | 1,061 | 904 | 1,213 | 998 | |||||
Gold Segment Consolidated(2) | 797 | 712 | 1,011 | 948 | |||||
Consolidated Silver Basis(3) | (3.29) | 4.44 | |||||||
Consolidated Silver Basis, before net realizable value inventory adjustments(3) | (2.35) | 4.45 | |||||||
(1) | Cash costs and AISC are non-GAAP measures. See the section “Alternative Performance (Non-GAAP) Measures” of the MD&A for the period ended December 31, 2020 for a detailed description of these measures and where appropriate a reconciliation of the measure to the Q4 2020 Financial Statements. | ||||||||
(2) | Silver segment cash costs and AISC are calculated net of credits for realized revenues from all metals other than silver and are calculated per ounce of silver sold. Gold segment cash costs and AISC are calculated net of credits for realized silver revenues and are calculated per ounce of gold sold. Corporate general and administrative expense, and exploration and project development expense are included in consolidated (silver basis) AISC, but are not allocated amongst the operations and thus are not included in either the silver or gold segment consolidated amounts. | ||||||||
(3) | Consolidated silver basis is calculated by treating all revenues from metals other than silver, including gold, as a by-product credit. |
2020 ANNUAL RESULTS COMPARED TO FORECAST
The Company’s 2020 annual production, Cash Costs, AISC and capital expenditures compared to management’s most recent annual forecast amounts are as follows:
2020 Actual | Forecast Range(1) | |||
Production | ||||
Silver (million ounces) | 17.3 | 18.0 – 19.0 | ||
Gold (thousand ounces) | 522.4 | 525.0 – 575.0 | ||
Zinc (thousand tonnes) | 40.2 | 40.0 – 43.0 | ||
Lead (thousand tonnes) | 15.7 | 17.0 – 18.0 | ||
Copper (thousand tonnes) | 5.2 | 4.3 – 4.9 | ||
Cash Costs(2) ($/ounce) | ||||
Silver Segment | 7.05 | 6.20 – 7.70 | ||
Gold Segment | 797 | 800 – 860 | ||
AISC(2) ($/ounce) | ||||
Silver Segment | 11.38 | 10.50 – 12.50 | ||
Gold Segment | 1,011 | 1,050 – 1,125 | ||
Consolidated Silver Basis | (3.29) | (3.00) – 0.75 | ||
Capital Expenditures ($ millions) | ||||
Sustaining Capital | 162.0 | 175.0 – 180.0 | ||
Project Capital | 21.5 | 20.0 – 21.0 | ||
Total Capital | 183.5 | 195.0 – 201.0 | ||
(1) | The Forecast Range reflects the revised 2020 forecast provided on November 4, 2020. | |||
(2) | Cash Costs and AISC are non-GAAP measures. See the section “Alternative Performance (Non-GAAP) Measures” section of this news release for a detailed description of these measures. |
Q4 and FY 2020 Audited Results
Pan American plans to release its audited results for Q4 and FY 2020 on February 17, 2021, after market close. A conference call and webcast will be held on February 18, 2021.
About Pan American Silver
Pan American owns and operates silver and gold mines located in Mexico, Peru, Canada, Argentina and Bolivia. We also own the Escobal mine in Guatemala that is currently not operating. As the world’s second largest primary silver producer with the largest silver reserve base globally, we provide enhanced exposure to silver in addition to a diversified portfolio of gold producing assets. Pan American has a 27-year history of operating in Latin America, earning an industry-leading reputation for corporate social responsibility, operational excellence and prudent financial management. We are headquartered in Vancouver, B.C. and our shares trade on NASDAQ and the Toronto Stock Exchange.
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