Pan American Silver's Q1 2025: Key Contradictions in Production Costs, Capital Expenditure, and Government Engagement

Production and cost performance, optimization and capital expenditure at Jacobina, Escobal project status and government engagement, cost performance and forecasting, and Escobal mine and ILO 169 process are the key contradictions discussed in Pan American Silver's latest 2025Q1 earnings call.



Strong Operational Performance:
- Pan American Silver reported record mine operating earnings of $250.8 million in Q1 2025, with improvements in metal prices and effective cost management contributing to the increase.
- The improvement in operational performance was driven by a focus on safe, efficient operations and strict cost management.

Cost Management and Byproduct Credits:
- The company achieved lower-than-anticipated production costs in the Silver segment, with all-in sustaining costs of $13.94 per ounce, well below the guided range.
- The favorable cost performance was attributed to lower-than-expected production costs, higher byproduct credits from higher gold, zinc, and lead production, and some lower capital expenditures.

Gold Segment Performance:
- Gold production in Q1 was 182,200 ounces, in line with guidance, while Gold segment all-in sustaining costs, excluding NRV adjustments, were better than expected at $1,485 per ounce.
- The strong performance in the Gold segment was driven by higher-than-expected gold and silver production from residual leaching at Dolores and higher silver byproduct credits at El Penon.

Cash Flow and Balance Sheet Strength:
- Pan American Silver generated $112.6 million in free cash flow in Q1, with a record balance of $923 million in cash and short-term investments.
- The cash flow and balance sheet strength were supported by significant operating cash flow, tax payments, and continued investments in sustaining and growth projects.