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Currency in USD
Last close As at 26/05/2023
USD14.98
▲ −0.35 (−2.28%)
Market capitalisation
USD5,459m
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. It owns 11 producing operations, the currently suspended top tier Escobal silver mine and a number of large-scale advanced exploration/development projects.
Despite the relative strength of gold and silver prices, PAAS’s share price performance remains relatively muted and, in our opinion, does not reflect the transformative nature of the Yamana transaction. The stock is currently trading at a consensus FY23e EV/EBITDA of c 11x, which appears to be an undemanding multiple.
Metals & Mining
Metals & Mining
Metals & Mining
Metals & Mining
Mining Analyst
Guido Mastropietro
Director, finance
Siren Fisekci
VP, investor relations and corporate communic
Forecast net debt (US$m)
N/A
Forecast gearing ratio (%)
N/A
| % | 1M | 3M | 12M |
|---|---|---|---|
| Actual | (12.8) | 0.5 | (33.0) |
| Relative | (14.5) | (3.9) | (35.8) |
| 52 week high/low | US$24.0/US$13.6 |
Pan American Silver (PAAS) completed the Yamana transaction at the end of March, continuing its track record of timely and value-accretive acquisitions that add scale and improve profitability. With the full annualised contribution from the Yamana assets, we estimate PAAS will produce c 25Moz of silver and 1.1Moz of gold in FY24. The anticipated launch of Escobal (FY25e) could further increase silver production to above 40Moz, bringing PAAS closer to the industry leader, Fresnillo. In this note we reinstate our estimates and update our valuation to reflect the Yamana acquisition. Our sum-of-the-parts valuation is now US$22.5/share.
| Y/E Dec | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (fd) (c) | P/E (x) | P/CF (x) |
|---|---|---|---|---|---|---|
| 2021A | 1632.8 | 593.2 | 274.0 | 60.10 | 24.9 | 31.9 |
| 2022A | 1494.7 | 272.0 | (66.6) | (51.01) | N/A | N/A |
| 2023E | 2437.7 | 733.7 | 185.7 | 37.36 | 40.1 | 51.9 |
| 2024E | 2895.8 | 1099.0 | 468.0 | 77.58 | 19.3 | 19.8 |
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