Pan American Silver(US:PAAS)2022-05-12 18:14Financial Data and Key Metrics Changes - In Q1 2022, revenue was $439.9 million, with net earnings of $76.8 million or $0.36 per share, including a one-time $44.6 million fair value adjustment for the interest in Maverix [9] - Adjusted earnings were $32 million or $0.15 per share, with cash flow from operations totaling $68.8 million [9] - The company reported net cash of $224.8 million and announced a dividend of $0.12 per common share for Q1 [9] Business Line Data and Key Metrics Changes - Silver production was 4.6 million ounces, with all-in sustaining costs at $13.41 per ounce and cash costs at $10.23 per ounce [5] - Gold production reached 131,000 ounces, with all-in sustaining costs at $1,502 per ounce and cash costs at $1,069 per ounce [8] - The silver segment benefited from higher byproduct metal prices, while the gold segment faced challenges due to lower mine grades and a significant NRV inventory adjustment [5][8] Market Data and Key Metrics Changes - The company experienced inflationary pressures, particularly for diesel and consumables, impacting overall costs [4] - The Omicron variant initially reduced workforce deployment but was largely managed, allowing for a return to normal operations [4][17] Company Strategy and Development Direction - The company is focused on achieving production guidance for 2022, with expectations weighted towards the second half of the year [4] - Growth projects include significant drilling at La Colorada Skarn, with over 100,000 meters completed since the last resource estimate [10] - The company is evaluating alternative opportunities for Morococha, including monetization and joint ventures [7] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to normal workforce levels and operational improvements despite ongoing inflationary pressures [4][17] - The company is closely monitoring global inflation and will adjust cost estimates as necessary [4] - The management highlighted the importance of engineering work to define mining methods for future resource updates [20] Other Important Information - The company released its 2021 Sustainability Report, outlining goals to reduce GHG emissions by at least 30% by 2030 [11] - The consultation process for the Escobal project is ongoing, with multiple meetings planned [11][16] Q&A Session Summary Question: Update on Escobal consultation process - Management indicated that there is no set number of meetings and expressed encouragement about the current schedule of meetings [16] Question: Lead time for recommencing operations - Management stated that a few months would be needed to return to production, with ongoing care and maintenance ensuring readiness [18] Question: Focus of resource update for La Colorada Skarn - Management confirmed that the resource update will focus on both upgrading inferred resources and adding to them with step-out drilling [20] Question: Factors contributing to costs at Dolores - Management identified lower grade ores and COVID-related inefficiencies as the main drivers of increased costs at Dolores [24][25] Question: Strategic intention for La Arena 2 - Management noted that La Arena 2 is gaining interest due to its potential as a copper-gold porphyry project, with ongoing exploration and resource updates planned [27][28]