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Pan American Silver(PAAS) - 2024 Q4 - Earnings Call Transcript
PAASPan American Silver(PAAS)2025-02-20 18:53
Financials

Financial Data and Key Metrics Changes - Revenue reached a record of 815.1millioninQ4and815.1 million in Q4 and 2.8 billion for the full year 2024, driven by the acquisition of Yamana mines and strong metal prices [6][10] - Cash flow from operations was a record 274.1millioninQ4and274.1 million in Q4 and 724.1 million for the full year, reflecting strong margins [9] - Free cash flow also set a record at 196.2millioninQ4and196.2 million in Q4 and 445.1 million for the full year [10] - Net earnings for Q4 were 107.8millionor107.8 million or 0.30 per share, while full year net earnings were 112.7millionor112.7 million or 0.31 per share [10][12] - The company entered 2025 with a net cash position of 887millionagainstapproximately887 million against approximately 800 million of debt, providing 1.6billionintotalavailableliquidity[13][15]BusinessLineDataandKeyMetricsChanges−Silverproductiontotaled21.1millionounces,whilegoldproductionreachedarecordof892,000ouncesin2024[6]−All−insustainingcostsforsilverwere1.6 billion in total available liquidity [13][15] Business Line Data and Key Metrics Changes - Silver production totaled 21.1 million ounces, while gold production reached a record of 892,000 ounces in 2024 [6] - All-in sustaining costs for silver were 18.98 per ounce, slightly above guidance, while gold segment costs were 1,501perounce,withinguidance[7]MarketDataandKeyMetricsChanges−Thecompanyexpectssilverproductionin2025tobebetween20to21millionouncesandgoldproductionbetween735,000to800,000ounces,withproductionweightedtowardsthesecondhalfoftheyear[16]CompanyStrategyandDevelopmentDirection−Thecompanyplanstoinvestbetween1,501 per ounce, within guidance [7] Market Data and Key Metrics Changes - The company expects silver production in 2025 to be between 20 to 21 million ounces and gold production between 735,000 to 800,000 ounces, with production weighted towards the second half of the year [16] Company Strategy and Development Direction - The company plans to invest between 270 million to 285millioninsustainingcapitaland285 million in sustaining capital and 90 million to 100millioninprojectcapitalin2025[18]−InvestmentswillfocusonLaColorada,Timmins,andJacobina,withastrongemphasisonexplorationandoptimizingexistingoperations[19][20]−Thecompanyaimstomaintainafocusonsafe,efficient,andsustainableminingoperationswhilecapitalizingonthecurrentstrongmetalpriceenvironment[22][23]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthecompany′sstrongfinancialpositionandabilitytopursuegrowthobjectiveswhilereturningcapitaltoshareholders[13][14]−ThecompanyisoptimisticabouttheintegrationoftheYamanaassetsandthepotentialforincreasedvaluegenerationintheTimminsdistrict[42][44]−ManagementnotedongoingdiscussionsregardingtheEscobalproject,emphasizingthatprogressisbeingmadedespitethelackofapublishedtimelinefortheconsultationprocess[62][67]OtherImportantInformation−Thecompanyannouncedadividendof100 million in project capital in 2025 [18] - Investments will focus on La Colorada, Timmins, and Jacobina, with a strong emphasis on exploration and optimizing existing operations [19][20] - The company aims to maintain a focus on safe, efficient, and sustainable mining operations while capitalizing on the current strong metal price environment [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong financial position and ability to pursue growth objectives while returning capital to shareholders [13][14] - The company is optimistic about the integration of the Yamana assets and the potential for increased value generation in the Timmins district [42][44] - Management noted ongoing discussions regarding the Escobal project, emphasizing that progress is being made despite the lack of a published timeline for the consultation process [62][67] Other Important Information - The company announced a dividend of 0.10 per share for Q4 and has repurchased approximately 20millionworthofsharesunderitsbuybackplan[14][15]−Totaldividendspaidin2024amountedto20 million worth of shares under its buyback plan [14][15] - Total dividends paid in 2024 amounted to 145.4 million, with over $1 billion returned to investors since 2010 [15] Q&A Session Summary Question: Guidance for La Colorada production in 2025 - Management explained that the guidance reflects a balance between short-term production and long-term exploration value [25][28] Question: Jacobina production guidance and optimization studies - Management indicated that ongoing optimization projects will impact production forecasts, with confidence in future throughput increases [35][36] Question: Timmins assets and their value post-Newmont sale - Management expressed optimism about the Timmins district's potential and the ability to generate value through collaboration with neighboring operations [41][42] Question: Escobal project consultation process - Management clarified that while there have been delays, discussions are ongoing, and they remain hopeful for a positive outcome [62][67] Question: Exploration focus for 2025 - Management confirmed that exploration remains a priority, with a substantial budget allocated for brownfield exploration [80][83] Question: Restart timeline for Escobal once approved - Management estimated it would take about one to two quarters to start production again, with full ramp-up expected thereafter [88][89]