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.
While the gold price has recently reached an all-time high, Pan American shares continue to lag. We see further upside in the stock, if commodity prices remain at elevated levels and the company continues to deliver on its guidance.
Metals & Mining |
Flash note
Metals & Mining |
Update
Metals & Mining |
Flash note
Metals & Mining |
Update
Guido Mastropietro
Director, finance
Siren Fisekci
VP, investor relations and corporate communic
Forecast net debt (US$m)
186.1
Forecast gearing ratio (%)
4
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 12.8 | (1.3) | 48.1 |
Relative | 6.6 | (4.9) | 10.8 |
52 week high/low | US$24.2/US$12.2 |
Adjusted for the divestment of MARA, Morococha and Jeronimo, Pan American has reported flat P&P reserves in the silver segment of 45.8Mt at a grade of 289 g/t Ag versus 274 g/t Ag at June 2023, effectively replacing the mined tonnage during the year. In the gold segment, adjusted P&P reserves fell from c 200mt (at 1.1 g/t Au) to 180Mt (1.1 g/t Au), with the biggest drop recorded at La Arena, which is being divested, and Dolores, which was expected to cease mining in Q324. On the same basis, M&I resources in the silver segment increased from 278Mt to 446Mt, albeit at a reduced Ag grade, thanks to the upgrade at La Colorada Skarn, which saw a 53% rise in indicated resource to 265Mt at an increased grade of 36 g/t Ag, with the inferred resource falling 40% as a result. In the gold segment, M&I resources were only slightly lower at 977Mt at 0.48 g/t Au. Overall, six of 11 producing operations, including flagship Jacobina and La Colorada, have seen their mineral reserves either fully or almost fully replaced in tonnage terms in the year to June 2024.
Y/E Dec | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (fd) (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 1494.7 | 272.0 | (73.0) | (54.06) | N/A | N/A |
2023A | 2316.1 | 680.6 | 108.4 | 19.45 | 109.1 | N/A |
2024E | 2791.1 | 924.2 | 333.0 | 22.48 | 94.4 | 103.0 |
2025E | 2396.2 | 803.6 | 331.3 | 49.52 | 42.9 | 42.3 |