Pan American Silver is one of the largest global primary silver producers and a sizeable gold miner with operations in North, Central and South America since 1994. The company owns eight producing operations, the currently suspended top-tier Escobal silver mine and a number of large-scale advanced exploration projects.
More Pan American Silver content >Investment summary
PAAS reported mixed Q222 results that were heavily affected by one-off items stemming from the grade and production underperformance at Dolores. As a result, the company incurred US$155m in non-cash impairments and inventory revaluation charges. FY22 production is now guided towards the lower end of the original expectations and the gold segment cash costs at the top end. On a positive note, the annual mineral resources update revealed good resource replacement rates in the silver segment, and the company announced that Escobal is moving into the next stage of the ILO 169 consultation process. We have revised down our estimates, lowering our valuation to US$27.5/share.
Y/E Dec |
Revenue (US$m) |
EBITDA (US$m) |
PBT (US$m) |
EPS (fd) (c) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2020A | 1338.8 | 469.1 | 194.5 | 57.24 | 29.3 | 20.0 |
| 2021A | 1632.8 | 593.2 | 274.0 | 60.10 | 27.9 | 35.8 |
| 2022E | 1614.9 | 400.1 | 80.8 | 17.03 | 98.6 | N/A |
| 2023E | 1581.1 | 509.5 | 198.9 | 60.70 | 27.7 | 27.4 |
Industry outlook
The shares are down c 25% ytd on the back of the lower commodity prices driven by the increased risks to global economic growth, spiralling inflation and faster-than-expected monetary tightening. Having fallen c 25% ytd, the silver price has recently gained some support at c $18–19/oz. The gold/silver ratio is now at an elevated level of c 91x, which is consistent with the current economic cycle and gold’s outperformance versus silver.
Last updated on 17/08/2022Content on Pan American Silver
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Metals & mining
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Share price graph
Balance sheet |
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| Forecast net cash (US$m) | 210.7 |
| Forecast gearing ratio (%) | N/A |
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Key management |
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| Guido Mastropietro | Director, finance |
| Siren Fisekci | VP, investor relations and corporate communic |