Pan American Silver (PAAS) is one of the largest global primary silver producers and a sizeable gold miner with operations in North, Central and South America since 1994. PAAS owns eight producing operations, the currently suspended top-tier Escobal silver mine and a number of large-scale advanced exploration projects.
Our preliminary calculations suggest a pro forma FY22e consensus EV/EBITDA of 6.5x for the combined company, which we view as an attractive multiple. Additional support to PAAS’s share price should come from Agnico Eagle’s decision to buy up to US$150m in PAAS shares on the open market, which represents c 5% of the company’s equity.
Metals & Mining
Metals & Mining
Metals & Mining
Metals & Mining
Guido Mastropietro
Director, finance
Siren Fisekci
VP, investor relations and corporate communic
Forecast net cash (US$m)
134.2
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 13.9 | 19.4 | (18.3) |
Relative | 9.0 | 14.7 | (11.4) |
52 week high/low | US$29.9/US$13.6 |
Pan American Silver (PAAS) has reported preliminary operational results for FY22. Consolidated silver and gold production of 18.5Moz and 552.5koz were within the earlier guidance ranges (previously revised for silver). PAAS continues to progress its recently announced plan of arrangement to buy all non-Canadian assets of Yamana Gold. Shareholder votes for both companies are scheduled for 31 January, while the leading proxy advisors ISS and Glass Lewis have recommended PAAS shareholders to vote in favor of the proposed share issue to acquire all outstanding Yamana shares. We put our forecasts and valuation of PAAS under review pending upcoming shareholder approvals of the deal, which we believe could be an important catalyst for the stock.
Y/E Dec | Revenue (US$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 | 33.4 | 22.8 |
2021A | 1632.8 | 593.2 | 274.0 | 60.10 | 31.8 | 40.8 |
2022E | 1540.8 | 296.6 | (24.7) | (25.65) | N/A | N/A |
2023E | 1582.9 | 483.9 | 174.2 | 53.06 | 36.1 | 35.7 |
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