For the first quarter of 2023, Pan American Silver Corp. (NASDAQ:PAAS) posted adjusted profits per share of 10 cents, exceeding the Consensus Estimate of 5 cents. Due to lower silver prices and increased expenses, earnings decreased 33% when compared to the prior quarter’s earnings of 5 cents per share.

In the most recent quarter, Pan American Silver posted earnings of 8 cents per share, down from the 36 cents per share reported in the corresponding quarter last year.

Revenues for Pan American Silver fell by 11.3% year over year to $390 million during the period under consideration. The top line exceeded the $354 million Consensus Estimate.

The average realized silver price for the quarter was $22.75 per ounce, a 5% decrease from $24 per ounce in the same quarter of the previous year. At $1,895 per ounce, the average realized gold price increased by 0.8% from the previous year.

Update on Operations

The quarter’s silver production was 3.9 million ounces, a 16% decrease from the prior year. The reported quarter’s gold production was 122.7 thousand ounces, a 6% decline from the same period last year.

Cash costs for the Silver division were $12.19 per ounce in the first quarter, up 19% from the same period last year. All-in-sustaining costs (AISC) for the segment increased 5% year over year to $14.13 per ounce in the third quarter.

Cash costs for the Gold division were $1,020 per ounce, a 5% rise over the prior quarter. The segment’s AISC costs were $1,196 per ounce in the months of January through March, a 20% reduction from the same period last year.

In the quarter, Pan American Silver recorded a mine-operating profit of $77 million, up from $67 million in the corresponding period in 2022.

Financial Standing

At the end of March 2023, PAAS had $513.1 million in cash and short-term investments, $826.6 million in working capital, and $425 million in its $750 million revolving sustainability-linked credit facility. The SL-Credit Facility, leasing obligations, construction loans in Peru, two senior notes that Pan American absorbed through the Yamana transaction, and other debt totaled $1,187 million. The quarter’s net cash flow from operations was $51 million.

Update on the Yamana Purchase

In addition to the Cerro Moro mine in Argentina, the El Peón and Minera Florida mines in Chile, and the Jacobina mining complex in Brazil, Pan American Silver completed the acquisition of Yamana Gold Inc. The MARA development project in Argentina is also mentioned. Silver production at PAAS is anticipated to rise by 50% as a result of this transaction, while gold production will double. Given that these assets are excellent at generating cash flow, the transaction will improve PAAS’ financial standing.

Price Performance 

Pan American Silver shares have lost 19.9% of their value over the last year, while the industry as a whole has grown by 2.4%.

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