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PAAS' Q3 Earnings Surpass Estimates, Rise Y/Y on Higher Prices
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Pan American Silver Corp. (PAAS - Free Report) reported adjusted earnings per share of 32 cents for third-quarter 2024, which surpassed the Zacks Consensus Estimate of 21 cents. PAAS had posted adjusted earnings per share of 1 cent in the year-ago quarter. The year-over-year improvement was attributed to higher gold and silver prices.
Including one-time items, Pan American Silver reported earnings of 16 cents per share against the year-ago quarter’s loss of 5 cents per share.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
PAAS’ revenues improved 16% year over year to a record $716 million aided by higher metal prices. The top-line figure excludes an approximately $30 million build-up in finished goods and concentrate inventories. Revenues missed the Zacks Consensus Estimate of $741 million.
The average realized silver price increased 28% year over year to $30 per ounce. The average realized gold price increased 28.4% year over year to $2,475 per ounce.
Pan American Silver Corp. Price, Consensus and EPS Surprise
Silver production was around 5.47 million ounces, down 4% year over year. The decline was mainly due to lower production at Cerro Moro attributed to planned mine sequencing into lower grade ore zones.
Production was also down at Dolores due to stacking of a reduced amount of lower grade stockpiled ore following the planned cessation of mining activities in July 2024 and a lower ratio of ounces recovered to ounces stacked due to heap sequencing. This was offset by higher output at La Colorada reflecting enhanced ventilation conditions, which led to improvement in development and mining rates.
Gold production was 225 thousand ounces , reflecting a year-over-year decline of 8%. Lower production at Cerro Moro, Dolores and Minera Florida was offset by improved performance at Shahuindo.
The Silver segment’s cash costs were $15.88 per ounce in the third quarter, up 21% from the year-ago period. The segment’s all-in sustaining costs (AISC) rose 8% year over year to $19.63 per ounce .
The Gold segment’s cash costs were $1,195 per ounce, reflecting a 0.7% increase from the year-ago quarter. The segment’s AISC costs amounted to $1496 per ounce in the July-September period, representing a year-over-year rise of 3%.
Pan American Silver reported mine-operating earnings of $175.7 million compared with the $66.7 million in the prior-year quarter.
PAAS’ Cash & Debt Position
At the end of third-quarter 2024, Pan American Silver had cash and short-term investment balances of $469.9 million. It has $750 million available in its undrawn credit facility. Total debt amounted to $815.2 million. Net cash generated from operations was $226 million compared with $115 million in the prior-year quarter. Free cash flow was a record $151.5 million .
Pan American Silver Maintains 2024 Guidance
PAAS affirmed its production guidance for 2024. The silver production is expected to be between 21 million and 23 million ounces. The company expects gold production to be between 880 thousand ounces and 1000 thousand ounces.
The Silver segment’s AISC per ounce is estimated to be between $16.00 and $18.50 . The Gold segment’s AISC per ounce is forecast between $1,475 and $1,575.
PAAS Receives Canada Regulatory Approval for La Arena Sale
Pan American Silver revealed that the previously announced sale of its 100% interest in La Arena S.A. to Jinteng (Singapore) Mining Pte. Ltd., a subsidiary of Zijin Mining Group Co., Ltd., has received approval from the Government of Canada under the Investment Canada Act.
La Arena owns the La Arena gold mine and the La Arena II project in Peru. The approval is subject to a joint undertaking from Pan American Silver and Zijin to enter into an offtake agreement with respect to the La Arena II project. This will enable PAAS to secure 60% of the future copper concentrate supply from the La Arena II project on commercial terms for sale in North American markets once it starts commercial production.
The transaction, having obtained all required approvals, is set to close by the end of the fourth quarter of 2024. Per the terms of the sale, Zijin will pay $245 million in cash and grant Pan American Silver a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project. Upon the commencement of commercial production from the La Arena II project, Zijin will make an additional contingent payment of $50 million in cash.
Pan American Silver Stock’s Price Performance
PAAS’ shares have gained 72.3% in the past year compared with the industry’s 67.5% growth.
Image Source: Zacks Investment Research
How Did PAAS’ Peers Fare in Q3?
Fortuna Mining Corp. (FSM - Free Report) reported third-quarter 2024 adjusted earnings per share of 16 cents, which beat the Zacks Consensus Estimate of 11 cents. The bottom-line figure marked a 60% improvement from the year-ago quarter, driven by higher gold and silver prices, which offset lower sales volumes.
Fortuna Mining’s revenues improved 13% year over year to $275 million, as higher realized gold and silver prices partially offset the decline in gold sales volume. Realized gold price was $2,490 per ounce, 29% higher than $1,925 per ounce in the year-ago quarter. Realized silver prices rose 24% year over year to $29.00 per ounce.
First Majestic Silver (AG - Free Report) reported a third-quarter loss of 3 cents per share, which missed the Zacks Consensus Estimate of earnings of 9 cents per share. The company reported a loss of 2 cents per share in the second quarter of 2023.
Total production was 5.5 million silver equivalent ounces, which consisted of around 1.968 million silver ounces and 41,761 gold ounces. This was 13% lower than the year-ago quarter mainly due to lower production at San Dimas. AG’s quarterly revenues rose 10% year over year to $146 million as a 33% increase in average realized silver price offset lower payable sales volumes.
Pan American Silver’s Zacks Rank & a Stock Worth Considering
Pan American Silver currently carries a Zacks Rank #3 (Hold).
CRS beat the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 14.1%. The consensus estimate for CRS’ fiscal 2025 earnings is pegged at $6.68 per share, indicating 41% year-over-year growth. The company's shares have risen 159% in the past year.
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PAAS' Q3 Earnings Surpass Estimates, Rise Y/Y on Higher Prices
Pan American Silver Corp. (PAAS - Free Report) reported adjusted earnings per share of 32 cents for third-quarter 2024, which surpassed the Zacks Consensus Estimate of 21 cents. PAAS had posted adjusted earnings per share of 1 cent in the year-ago quarter. The year-over-year improvement was attributed to higher gold and silver prices.
Including one-time items, Pan American Silver reported earnings of 16 cents per share against the year-ago quarter’s loss of 5 cents per share.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
PAAS’ revenues improved 16% year over year to a record $716 million aided by higher metal prices. The top-line figure excludes an approximately $30 million build-up in finished goods and concentrate inventories. Revenues missed the Zacks Consensus Estimate of $741 million.
The average realized silver price increased 28% year over year to $30 per ounce. The average realized gold price increased 28.4% year over year to $2,475 per ounce.
Pan American Silver Corp. Price, Consensus and EPS Surprise
Pan American Silver Corp. price-consensus-eps-surprise-chart | Pan American Silver Corp. Quote
Pan American Silver’s Operational Update
Silver production was around 5.47 million ounces, down 4% year over year. The decline was mainly due to lower production at Cerro Moro attributed to planned mine sequencing into lower grade ore zones.
Production was also down at Dolores due to stacking of a reduced amount of lower grade stockpiled ore following the planned cessation of mining activities in July 2024 and a lower ratio of ounces recovered to ounces stacked due to heap sequencing. This was offset by higher output at La Colorada reflecting enhanced ventilation conditions, which led to improvement in development and mining rates.
Gold production was 225 thousand ounces , reflecting a year-over-year decline of 8%. Lower production at Cerro Moro, Dolores and Minera Florida was offset by improved performance at Shahuindo.
The Silver segment’s cash costs were $15.88 per ounce in the third quarter, up 21% from the year-ago period. The segment’s all-in sustaining costs (AISC) rose 8% year over year to $19.63 per ounce .
The Gold segment’s cash costs were $1,195 per ounce, reflecting a 0.7% increase from the year-ago quarter. The segment’s AISC costs amounted to $1496 per ounce in the July-September period, representing a year-over-year rise of 3%.
Pan American Silver reported mine-operating earnings of $175.7 million compared with the $66.7 million in the prior-year quarter.
PAAS’ Cash & Debt Position
At the end of third-quarter 2024, Pan American Silver had cash and short-term investment balances of $469.9 million. It has $750 million available in its undrawn credit facility. Total debt amounted to $815.2 million. Net cash generated from operations was $226 million compared with $115 million in the prior-year quarter. Free cash flow was a record $151.5 million .
Pan American Silver Maintains 2024 Guidance
PAAS affirmed its production guidance for 2024. The silver production is expected to be between 21 million and 23 million ounces. The company expects gold production to be between 880 thousand ounces and 1000 thousand ounces.
The Silver segment’s AISC per ounce is estimated to be between $16.00 and $18.50 . The Gold segment’s AISC per ounce is forecast between $1,475 and $1,575.
PAAS Receives Canada Regulatory Approval for La Arena Sale
Pan American Silver revealed that the previously announced sale of its 100% interest in La Arena S.A. to Jinteng (Singapore) Mining Pte. Ltd., a subsidiary of Zijin Mining Group Co., Ltd., has received approval from the Government of Canada under the Investment Canada Act.
La Arena owns the La Arena gold mine and the La Arena II project in Peru. The approval is subject to a joint undertaking from Pan American Silver and Zijin to enter into an offtake agreement with respect to the La Arena II project. This will enable PAAS to secure 60% of the future copper concentrate supply from the La Arena II project on commercial terms for sale in North American markets once it starts commercial production.
The transaction, having obtained all required approvals, is set to close by the end of the fourth quarter of 2024. Per the terms of the sale, Zijin will pay $245 million in cash and grant Pan American Silver a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project. Upon the commencement of commercial production from the La Arena II project, Zijin will make an additional contingent payment of $50 million in cash.
Pan American Silver Stock’s Price Performance
PAAS’ shares have gained 72.3% in the past year compared with the industry’s 67.5% growth.
Image Source: Zacks Investment Research
How Did PAAS’ Peers Fare in Q3?
Fortuna Mining Corp. (FSM - Free Report) reported third-quarter 2024 adjusted earnings per share of 16 cents, which beat the Zacks Consensus Estimate of 11 cents. The bottom-line figure marked a 60% improvement from the year-ago quarter, driven by higher gold and silver prices, which offset lower sales volumes.
Fortuna Mining’s revenues improved 13% year over year to $275 million, as higher realized gold and silver prices partially offset the decline in gold sales volume. Realized gold price was $2,490 per ounce, 29% higher than $1,925 per ounce in the year-ago quarter. Realized silver prices rose 24% year over year to $29.00 per ounce.
First Majestic Silver (AG - Free Report) reported a third-quarter loss of 3 cents per share, which missed the Zacks Consensus Estimate of earnings of 9 cents per share. The company reported a loss of 2 cents per share in the second quarter of 2023.
Total production was 5.5 million silver equivalent ounces, which consisted of around 1.968 million silver ounces and 41,761 gold ounces. This was 13% lower than the year-ago quarter mainly due to lower production at San Dimas.
AG’s quarterly revenues rose 10% year over year to $146 million as a 33% increase in average realized silver price offset lower payable sales volumes.
Pan American Silver’s Zacks Rank & a Stock Worth Considering
Pan American Silver currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the basic materials space is Carpenter Technology Corporation (CRS - Free Report) , which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CRS beat the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 14.1%. The consensus estimate for CRS’ fiscal 2025 earnings is pegged at $6.68 per share, indicating 41% year-over-year growth. The company's shares have risen 159% in the past year.