Pan American Silver Corp. (PAAS) BMO 33rd Global Metals, Mining & Critical Minerals Conference (Transcript)

Summary of Pan American Silver Corp. Conference Call Company Overview - Company: Pan American Silver Corp. (NYSE: PAAS) - Event: BMO 33rd Global Metals, Mining & Critical Minerals Conference - Date: February 27, 2024 - Participants: Michael Steinmann (President and CEO), Jackie Przybylowski (BMO Capital Markets) Key Points Portfolio Rationalization - The company is focusing on further portfolio rationalization, identifying non-core assets for divestment [2][3] - Successful integration of assets from the Yamana transaction, including four mines, has been highlighted [2] - The company has sold three assets and smaller investments, optimizing the portfolio quickly [2] - The divestment of the MARA joint venture was strategic, yielding nearly $400 million in cash and royalties [3] Production and Financial Performance - Silver production increased by approximately 11% following the MARA transaction, with a 60% increase in gold production [3] - The company aims to maintain a diversified portfolio, with no single country contributing more than 25% of revenue [5] Market Environment and Acquisitions - The current market for acquisitions is competitive, with a focus on the quality of assets rather than timing [12][13] - Long-term asset quality is prioritized over short-term metal price fluctuations [13] Silver Market Outlook - The CEO expressed a positive long-term outlook for silver, emphasizing its critical role in electronics and clean energy [15] - Current investor outflows from silver ETFs are noted, but strong industrial demand is expected to support future prices [15] Share Buyback Strategy - The company has announced a $240 million NCIB (Normal Course Issuer Bid) to support share price, alongside a commitment to dividends [16][17] - The CEO emphasized the importance of maintaining a strong balance sheet to capitalize on opportunities [20] La Colorada Project - Significant investment in the La Colorada mine, including a $48 million ventilation shaft, is expected to restore production levels [22] - The mine has historically produced around 7 million ounces of silver annually, with production impacted in the previous year [22] - The Skarn project at La Colorada is described as a world-class discovery, with potential for a multi-decade operation [23][24] Escobal Mine Update - The Escobal mine is currently in care and maintenance, with a court-mandated ILO process ongoing for consultation with indigenous groups [27][28] - The transition to a new government in Guatemala has slightly slowed the process, but there is a commitment to continue consultations [29][31] Regulatory Environment in Mexico - The CEO does not foresee risks to existing operations in Mexico due to the current administration's stance on open-pit mining [36] - The Dolores mine will transition to a leaching phase, with no further open-pit mining planned [36] Future of Mining - The CEO believes that underground mining will become increasingly preferred due to geological and environmental considerations [36] Additional Insights - The company is exploring potential partnerships for the Skarn project to leverage its value without taking on full operational responsibility [24][25] - The CEO's extensive experience in South America is viewed as a competitive advantage in negotiations and community relations [7][9]