Wednesday, March 23, 2016

Pan American Silver Corp. - PAA.t

Pan American Silver Corp. - PAA.t is the second largest primary silver mining company in the world, with eight operating silver mines in Peru, Mexico, Argentina and Bolivia.

The Company produced 26.1 million ounces of silver and 161,500 ounces of gold in 2015 at AISC of $14.92 Oz Ag.




On May 11, 2016 the company released numbers

"Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA) ("Pan American", or the "Company") today reported unaudited results for the three months ended March 31, 2016.
Strategic Achievements First Quarter ("Q1") 2016 vs Q1 2015
Operating and Financial
  • Increased silver production 6% to 6.42 million ounces
  • Increased gold production 10% to 41,200 ounces
  • Reduced consolidated cash costs(1) 31% to $8.03 per payable ounce of silver, net of by-product credits
  • Reduced consolidated All-In Sustaining Costs per Silver Ounce Sold(2) ("AISCSOS") 8% to $13.12, net of by-product credits
  • Generated $1.9 million in net earnings, compared to a loss of $19.8 million
  • Adjusted earnings(3) were $3.5 million ($0.02 per share), compared to an adjusted loss(3) of $19.9 million ($0.13 per share)  
  • Increased operating cash flows before working capital changes to $28.4 million, or $0.19 per share, from $7.4 million, or $0.05 per share
Project Development
  • La Colorada expansion – project remains on budget and on schedule for the planned  production increase to 1,800 tonnes per day by the end of 2017
  • Dolores expansion – project remains on budget and on schedule for the pulp agglomeration plant and underground operations to reach full design capacity by the end of 2017

(1)
Cash cost per payable ounce of silver, net of by-product credits ("cash costs") is not a generally accepted accounting principle (a "non-GAAP") measure. Cash costs does not have a standardized meaning prescribed by IFRS as an indicator of performance. The Company's method of calculating cash costs may differ from the methods used by other entities and, accordingly, the Company's cash costs may not be comparable to similarly titled measures used by other entities. Investors are cautioned that cash costs should not be construed as an alternative to production costs, depreciation and amortization, and royalties determined in accordance with IFRS as an indicator of performance. Readers should refer to the "Alternative Performance (non-GAAP) Measures" section of the Company's management's discussion and analysis for the three months ended March 31, 2016 (the "Q1 2016 MD&A") for a more detailed discussion of this measure and its calculation.
(2)
All-In Sustaining Costs per Silver Ounce Sold ("AISCSOS") is a non-GAAP measure. The Company has adopted AISCSOS as a measure of its consolidated operating performance and its ability to generate cash from all operations collectively, and the Company believes it is a more comprehensive measure of the cost of operating our consolidated business than traditional cash costs per payable ounce as it includes the cost of replacing ounces through exploration, the cost of ongoing capital investments (sustaining capital), general and administrative expenses, as well as other items that affect the Company's consolidated earnings and cash flow. AISCSOS does not have a standardized meaning prescribed by GAAP, and readers should refer to the "Alternative Performance (non-GAAP) Measures" section of the Q1 2016 MD&A for a more detailed discussion of this measure and its calculation.
(3)
Adjusted earnings (loss), and adjusted earnings (loss) per share, are non-GAAP measure that the Company considers to better reflect normalized earnings as it eliminates items that may be volatile from period to period relating to positions that will settle in future periods, and items that are non-recurring. Readers should refer to the "Alternative Performance (non-GAAP) Measures" section of the Q1 2016 MD&A for a more detailed discussion of these measures and their calculation.

Michael Steinmann, President and Chief Executive Officer of the Company commented on the first quarter 2016 results, "We are off to a very good start in 2016, delivering robust production and a respectable financial performance. We produced more silver, gold and base metals as compared to the same quarter of last year, significantly reduced our costs, generated adjusted earnings of $0.02 per share and cash flow from operations of $28.4 million (before changes in working capital). These results were achieved in spite of lower prices on our silver and gold sales than in Q1 2015, which trimmed our revenue by nearly $20 million." Steinmann continued, "Our two expansion projects at La Colorada and Dolores are advancing on schedule and on budget, funded completely by our strong balance sheet, as we progress steadily towards becoming an even lower cost producer".
Consolidated Financial Results

Three months ended
March 31,
(Unaudited in thousands of U.S. Dollars,
except per share and per ounce figures)

2016

2015
Revenue
$
158,275
$
178,125
Mine operating earnings
$
16,698
$
2,630
Net earnings (loss) for the period
$
1,875
$
(19,785)
Adjusted earnings (loss) for the period(1)
$
3,455
$
(19,907)
Operating cash flow excluding changes in
non-cash working capital
$
28,371
$
7,424
All-in sustaining cost per silver ounce sold(2)
$
13.12
$
14.24
Net earnings (loss) per share attributable to
common shareholders (basic)
$
0.01
$
(0.13)
Adjusted earnings (loss) per share
attributable to common shareholders (basic)
$
0.02
$
(0.13)
Operating cash flow excluding changes in
non-cash working capital per share
$
0.19
$
0.05


(1)      
Adjusted earnings (loss), and adjusted earnings (loss) per share, are non-GAAP measures that the Company considers to better reflect normalized earnings as it eliminates items that may be volatile from period to period relating to positions that will settle in future periods, and items that are non-recurring. Readers should refer to the "Alternative Performance (non-GAAP) Measures" section of the Q1 2016 MD&A for a more detailed discussion of these measures and their calculation.
(2)      
AISCSOS is a non-GAAP measure and does not have a standardized meaning prescribed by GAAP. Readers should refer to the "Alternative Performance (non-GAAP) Measures" section of the Q1 2016 MD&A for a more detailed discussion of this measure and its calculation.


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