Quarterly Dividend Increased by 43%

All financial figures are in U.S. dollars unless otherwise indicated.

VANCOUVER, Feb. 19, 2020 /PRNewswire/ - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) today reported unaudited financial results for the year-ended December 31, 2019 ("FY 2019") and the fourth quarter ("Q4 2019"). These results are preliminary and could change based on final audited results. Preliminary production results were previously reported on January 15, 2020.

"Strong, low cost production generated operational cash flow of $282 million in 2019, which allowed Pan American to retire $60 million of debt, dividend approximately $29 million to shareholders, invest in new projects such as our La Colorada skarn discovery, and increase our cash position," said Michael Steinmann, President and Chief Executive Officer of the Company. "In 2020, we are expecting silver and gold production growth of approximately 7% and 16%, respectively. Given our business outlook and strong financial position, Pan American's Board of Directors has increased the quarterly dividend by 43% to $0.05 per common share."

Q4 2019 and FY 2019 Highlights:

  • Revenue in Q4 2019 and FY 2019 totaled $404.4 million and $1,350.8 million, respectively.
  • Net cash generated from operating activities in Q4 2019 of $129.5 million was the highest in the Company's history. Net cash generated from operating activities in FY 2019 was $282.0 million.
  • Net earnings in Q4 2019 and FY 2019 were $51.7 million ($0.25 basic earnings per share) and $111.2 million ($0.55 basic earnings per share), respectively. Net earnings in Q4 2019 included a $40.1 million impairment charge related to the Manantial Espejo mine in Argentina due to the increase in export taxes and the challenging business environment in Argentina; partially offset by $33.7 million in investment income, largely related to our approximately 17% equity interest in New Pacific Metals Corp.
  • Adjusted earnings in Q4 2019 and FY 2019 were $68.9 million ($0.33 basic adjusted earnings per share) and $158.0 million ($0.78 basic adjusted earnings per share), respectively.
  • Consolidated annual silver and gold production was 25.9 million ounces and 559.2 thousand ounces, respectively, as previously disclosed on January 15, 2020.
  • Silver Segment Cash Costs and All-in Sustaining Costs ("AISC") in FY 2019 were $6.39 and $10.46 per silver ounce sold, respectively, both of which were within the Company's 2019 annual guidance.
  • Gold Segment Cash Costs and AISC in FY 2019 were $712 and $948 per gold ounce sold, respectively, both of which were below the Company's annual guidance for 2019.
  • Consolidated Silver Basis AISC in FY 2019 was $4.44 per silver ounce sold, which was well below the Company's 2019 annual guidance range of $6.00 to $7.50 per ounce.
  • At December 31, 2019, the Company had a cash and short-term investment balance of $238.3 million and $275.0 million of bank debt. Working capital was $517.2 million.
  • In 2019, Pan American paid $29.3 million in dividends ($0.14 per share).
  • The Board of Directors has approved an increase in the cash dividend from $0.035 to $0.05 per common share, for approximately $10.5 million in aggregate cash dividends, payable on or about March 12, 2020, to holders of record of Pan American's common shares as of the close on March 2, 2020. Pan American's dividends are designated as eligible dividends for the purposes of the Income Tax Act (Canada). As is standard practice, the amounts and specific distribution dates of any future dividends will be evaluated and determined by the Board of Directors on an ongoing basis.

Cash Costs, AISC, adjusted earnings, basic adjusted earnings per share, and working capital are not generally accepted accounting principle ("non-GAAP") financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures.

Fourth Quarter and Year End 2019 Unaudited Results Conference Call and Webcast

Date:

February 20, 2020

Time:

11:00 am ET (8:00 am PT)

Dial-in numbers:

1-800-319-4610 (toll-free in Canada and the U.S.)


+1-604-638-5340 (international participants)

Webcast:

panamericansilver.com

 

Callers should dial in 5 to 10 minutes prior to the scheduled start time. The live webcast and presentation slides will be available on the Company's website at panamericansilver.com. An archive of the webcast will also be available for three months.

All amounts expressed in U.S. dollars unless otherwise indicated.

Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts, unless otherwise noted.

 CONSOLIDATED RESULTS




December 31,
2019

December 31,
2018

Weighted average shares during period (millions)



201.4

153.3

Shares outstanding end of period (millions)



209.8

153.4







Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

FINANCIAL





Revenue

$

404,379

$

173,357

$

1,350,759

$

784,495

Mine operating earnings (loss)

$

98,610

$

(4,666)

$

229,288

$

100,897

Net earnings (loss)

$

51,706

$

(63,577)

$

111,244

$

12,041

Basic earnings (loss) per share (1)

$

0.25

$

(0.42)

$

0.55

$

0.07

Adjusted earnings (loss) (2)

$

68,908

$

(2,022)

$

157,987

$

59,434

Basic adjusted earnings (loss) per share (1)

$

0.33

$

(0.01)

$

0.78

$

0.39

Net cash generated from operating activities

$

129,473

$

11,930

$

282,028

$

154,978

Net cash generated from operating activities before changes
in working capital (2)

$

124,727

$

16,827

$

309,972

$

159,239

Sustaining capital expenditures

$

46,187

$

31,150

$

179,096

$

106,913

Project capital expenditures

$

9,504

$

13,151

$

43,627

$

44,702

Cash dividend per share

$

0.035

$

0.035

$

0.140

$

0.140

PRODUCTION





Silver (thousand ounces)

6,622

6,127

25,886

24,775

Gold (thousand ounces)

173.9

37.2

559.2

178.9

Zinc (thousand tonnes)

16.6

18.5

67.6

64.8

Lead (thousand tonnes)

7.2

6.3

27.3

22.4

Copper (thousand tonnes)

2.3

2.2

8.7

9.8

CASH COSTS (2) ($/ounce)





Silver Segment

7.80

5.82

6.39

3.36

Gold Segment

693

n/a

712

n/a

AISC (2) ($/ounce)





Silver Segment

11.37

14.69

10.46

9.48

Gold Segment

901

n/a

948

n/a

Consolidated Silver Basis

1.04

16.19

4.44

10.77

Average realized prices





Silver ($/ounce)(3)

17.84

14.35

16.34

15.61

Gold ($/ounce)(3)

1,479

1,232

1,406

1,272

Zinc ($/tonne)(3)

2,325

2,508

2,535

2,846

Lead ($/tonne)(3)

2,078

1,914

1,997

2,189

Copper ($/tonne)(3)

5,840

6,098

5,973

6,519

(1)

Per share amounts are based on basic weighted average common shares.

(2)

Non-GAAP measures: Cash Costs, All-in Sustaining Costs (AISC), adjusted earnings, basic adjusted earnings per share, and net cash generated from operating activities before changes in working capital are non-GAAP financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures.

(3)

Metal prices stated are inclusive of final settlement adjustments on concentrate sales.

 

2019 Annual Results Compared to 2019 Forecast

The Company's 2019 annual production, Cash Costs, AISC and capital expenditures compared to Management's most recent annual forecast amounts are as follows:


2019 Actual

Forecast Range (1)

Production



Silver (million ounces)

25.9

25.3 - 26.3

Gold (thousand ounces)

559.2

550.0 - 600.0

Zinc (thousand tonnes)

67.6

65.0 - 67.0

Lead (thousand tonnes)

27.3

24.0 - 25.0

Copper (thousand tonnes)

8.7

9.8 - 10.3

Cash Costs(2) ($/ounce)



Silver Segment

6.39

6.00 - 7.00

Gold Segment

712

725 - 775

Consolidated Silver Basis

(4.89)

(5.50) - (3.80)

AISC(2) ($/ounce)



Silver Segment

10.46

9.50 - 11.00

Gold Segment

948

1,000 - 1,100

Consolidated Silver Basis

4.44

6.00 - 7.50

Capital Expenditures ($ millions)



Sustaining Capital

179.1

203.0 - 213.0

Project Capital

43.6

45.0

Total Capital

222.7

248.0 - 258.0

(1)

Forecast amounts represent Management's most recent annual forecasts made or reaffirmed in the Company's Management Discussion and Analysis (MD&A) for the third quarter of 2019, dated November 6, 2019.

(2)

Cash Costs and AISC are non-GAAP measures. Please refer to the section "Alternative Performance (Non-GAAP) Measures" of this news release for a detailed description of these measures and where appropriate a reconciliation.

 

Consolidated Statements of Financial Position
(Unaudited in thousands of U.S. dollars)


December 31,
2019

December 31,
2018

Assets



Current assets



Cash and cash equivalents

$

120,564

$

138,510

Short-term investments

117,776

74,004

Trade and other receivables

168,753

96,091

Income taxes receivable

17,209

13,108

Inventories

346,507

214,465

Derivative financial instruments

1,272

640

Prepaid expenses and other current assets

16,838

11,556


788,919

548,374

Non-current assets



Mineral properties, plant and equipment

2,504,901

1,301,002

Inventories

24,209

Long-term refundable tax

17,900

70

Deferred tax assets

36,447

12,244

Investment in associates

84,319

70,566

Goodwill & other assets

4,987

5,220

Total Assets

$

3,461,682

$

1,937,476




Liabilities



Current liabilities



Accounts payable and accrued liabilities

$

225,330

$

131,743

Derivative financial instruments

51

Current portion of provisions

7,372

5,072

Current portion of lease obligations

14,198

5,356

Income tax payable

24,770

8,306


271,670

150,528

Non-current liabilities



Long-term portion of provisions

188,012

70,083

Deferred tax liabilities

176,808

148,819

Long-term portion of lease obligations

27,010

1,320

Debt

275,000

Deferred revenue

12,542

13,288

Other long-term liabilities

27,754

25,425

Share purchase warrants

15,040

14,664

Total Liabilities

993,836

424,127




Equity



Capital and reserves



Issued capital

3,123,514

2,321,498

Reserves

94,274

22,573

Investment revaluation reserve

208

Deficit

(754,689)

(836,067)

Total Equity attributable to equity holders of the Company

2,463,099

1,508,212

Non-controlling interests

4,747

5,137

Total Equity

2,467,846

1,513,349

Total Liabilities and Equity

$

3,461,682

$

1,937,476

 

Consolidated Income Statements
(Unaudited in thousands of U.S. dollars except per share amounts)


Three months ended
December 31,

Year ended
December 31,


2019

2018

2019 (1)

2018

Revenue

$

404,379

$

173,357

$

1,350,759

$

784,495

Cost of sales





Production costs

(229,594)

(136,177)

(841,297)

(515,636)

Depreciation and amortization

(68,239)

(37,245)

(253,453)

(147,289)

Royalties

(7,936)

(4,601)

(26,721)

(20,673)


(305,769)

(178,023)

(1,121,471)

(683,598)

Mine operating earnings (loss)

98,610

(4,666)

229,288

100,897






General and administrative

(10,009)

(5,450)

(31,752)

(22,649)

Exploration and project development

(2,562)

(3,509)

(11,684)

(11,138)

Mine care and maintenance

(8,008)

(23,662)

Foreign exchange gains (losses)

2,970

406

(5,003)

(9,326)

Impairment charges

(40,050)

(27,789)

(40,050)

(27,789)

Gains on commodity and foreign currency contracts

1,564

524

3,315

4,930

Gains (losses) on sale of mineral properties, plant and equipment

1,040

(56)

3,858

7,973

Share of income (loss) from associate and dilution gain

14,246

(182)

15,245

13,679

Transaction and integration costs

197

(10,229)

(7,515)

(10,229)

Other expense

(5,754)

(2,795)

(4,936)

(3,659)

Earnings (loss) from operations

52,244

(53,746)

127,104

42,689






Loss on derivatives

(60)

(14)

(1,078)

Investment income (loss)

33,741

(1,428)

84,704

(284)

Interest and finance expense

(8,327)

(2,305)

(29,282)

(8,139)

Earnings (loss) before income taxes

77,658

(57,539)

182,512

33,188

Income tax expense

(25,952)

(6,038)

(71,268)

(21,147)

Net earnings (loss) for the period

$

51,706

$

(63,577)

$

111,244

$

12,041






Attributable to:





Equity holders of the Company

51,927

(63,809)

110,738

10,294

Non-controlling interests

(221)

232

506

1,747


$

51,706

$

(63,577)

$

111,244

$

12,041






Earnings (loss) per share attributable to common shareholders





Basic earnings (loss) per share

$

0.25

$

(0.42)

$

0.55

$

0.07

Diluted earnings (loss) per share

$

0.25

$

(0.42)

$

0.55

$

0.07

Weighted average shares outstanding (in 000's) Basic

209,671

153,352

201,397

153,315

Weighted average shares outstanding (in 000's) Diluted

209,873

153,504

201,571

153,522



(1)

The purchase price allocation ("PPA") for the Tahoe acquisition was finalized in Q4 2019, and the previously reported $30.5 million bargain purchase gain was removed from 2019 net income; as such, net income for the three months ended March 31, 2019 ("Q1 2019") will be restated to reflect this $30.5 million reduction to previously reported Q1 2019 net income.

 

Consolidated Statements of Comprehensive Income
(Unaudited in thousands of U.S. dollars)


Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

Net earnings (loss) for the period

$

51,706

$

(63,577)

$

111,244

$

12,041

Items that may be reclassified subsequently to net earnings:





Unrealized net gains on short-term investments (net of $nil tax in
2019 and 2018)

332

993

Reclassification adjustment for realized gains on short-term
investments to earnings

(294)

(208)

(788)

Total comprehensive earnings (loss) for the period

$

51,706

$

(63,539)

$

111,036

$

12,246






Total comprehensive earnings (loss) attributable to:





Equity holders of the Company

$

51,927

$

(63,771)

$

110,530

$

10,499

Non-controlling interests

(221)

232

506

1,747


$

51,706

$

(63,539)

$

111,036

$

12,246

 

Consolidated Statements of Cash Flows
(Unaudited in thousands of U.S. dollars)


Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

Cash flow from operating activities





Net earnings (loss) for the period

$

51,706

$

(63,577)

$

111,244

$

12,041






Current income tax expense

36,433

9,999

92,129

53,901

Deferred income tax recovery

(10,481)

(3,961)

(20,861)

(32,754)

Interest expense (recovery)

4,762

117

16,879

(678)

Depreciation and amortization

68,239

37,245

253,453

147,289

Impairment charges

40,050

27,789

40,050

27,789

Accretion on closure and decommissioning provision

2,583

1,631

9,903

6,524

Unrealized foreign exchange (gains) losses

(1,395)

(348)

6,057

10,337

(Gain) loss on sale of mineral properties, plant and equipment

(1,040)

56

(3,858)

(7,973)

Other operating activities

(47,630)

19,824

(96,277)

17,724

Changes in non-cash operating working capital

4,746

(4,897)

(27,944)

(4,261)

Operating cash flows before interest and income taxes

$

147,973

$

23,878

$

380,775

$

229,939






Interest paid

(4,038)

(417)

(16,944)

(1,684)

Interest received

75

561

776

1,944

Income taxes paid

(14,537)

(12,092)

(82,579)

(75,221)

Net cash generated from operating activities

$

129,473

$

11,930

$

282,028

$

154,978






Cash flow from investing activities





Payments for mineral properties, plant and equipment

$

(50,319)

$

(42,302)

$

(205,807)

$

(144,348)

Tahoe acquisition (1)

(247,479)

Acquisition of mineral interests

(1,545)

(7,500)

Net (purchase of) proceeds from sale of short-term investments

(1,849)

(10,020)

39,727

(25,554)

Proceeds from sale of mineral properties, plant and equipment

103

4

10,267

15,781

Net proceeds from commodity, diesel fuel swaps, and foreign currency contracts

518

1,289

2,669

2,449

Net cash used in investing activities

$

(51,547)

$

(51,029)

$

(402,168)

$

(159,172)






Cash flow from financing activities





Proceeds from issue of equity shares

$

1,171

$

$

2,781

$

1,081

Distributions to non-controlling interests

(10)

(1,158)

(924)

(2,020)

Dividends paid

(7,337)

(5,366)

(29,332)

(21,284)

Proceeds from credit facility

335,000

Repayment of credit facility

(40,000)

(185,000)

Repayment of short-term loans

(3,000)

Payment of lease obligations

(5,726)

(2,223)

(19,270)

(7,911)

Net cash (used in) generated from financing activities

$

(51,902)

$

(8,747)

$

103,255

$

(33,134)

Effects of exchange rate changes on cash and cash equivalents

(173)

(68)

(1,061)

(115)

Net increase (decrease) in cash and cash equivalents

25,851

(47,914)

(17,946)

(37,443)

 Cash and cash equivalents at the beginning of the period

94,713

186,424

138,510

175,953

 Cash and cash equivalents at the end of the period

$

120,564

$

138,510

$

120,564

$

138,510



(1)

On February 22, 2019, the Company completed the acquisition of 100% of the issued and outstanding shares of Tahoe Resources Inc. ("Tahoe"). The cash invested represents consideration paid to Tahoe shareholders of $275 million net of cash received.

 

INDIVIDUAL MINE OPERATION RESULTS

The operating metrics, Cash Costs, AISC, and sustaining capital cash outflows for each of the Company's operating mines for the three and twelve months ending December 31, 2019, and 2018, are included in the following tables. Cash Costs and AISC are non-GAAP financial measures that do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. A detailed description and reconciliation of these measures to cost of sales is included in the "Alternative Performance (Non-GAAP) Measures" section of this news release.

La Colorada mine


Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

Tonnes milled - kt

197.1

187.4

768.7

726.0

Average silver grade – grams per tonne

358

375

361

358

Average zinc grade - %

2.85

3.10

3.10

2.83

Average lead grade - %

1.70

1.50

1.65

1.40

Production:


Silver – koz

2,080

2,074

8,206

7,617

Gold – koz

1.28

1.16

4.61

4.40

Zinc – kt

4.85

5.09

20.97

17.79

Lead – kt

2.92

2.44

11.15

8.84



Cash cost per ounce net of by-products

$

4.30

$

2.46

$

2.99

$

2.26

Sustaining capital - ('000s)

$

1,957

$

5,364

$

9,721

$

15,462

AISC

$

5.80

$

5.93

$

4.54

$

4.63

Payable silver sold - koz

1,770

1,780

7,583

7,069

 

Dolores mine





Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

Tonnes placed - kt

1,856.7

1,818.5

6,777.0

6,903.3

Average silver grade – grams per tonne

42

25

38

31

Average gold grade – grams per tonne

0.62

0.68

0.60

0.85

Production:





Silver – koz

1,287

824

5,122

4,081

Gold – koz

26.1

29.4

117.6

136.6






Cash cost per ounce net of by-products

$

2.64

$

6.30

$

3.09

$

(1.81)

Sustaining capital - ('000s)

$

8,106

$

13,255

$

49,660

$

48,842

AISC

$

9.33

$

35.36

$

15.45

$

16.36

Payable silver sold - koz

1,402

870

4,924

4,205

 

Huaron mine


Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

Tonnes milled - kt

252.3

252.0

994.0

935.0

Average silver grade – grams per tonne

140

142

142

142

Average zinc grade - %

2.49

2.49

2.38

2.44

Average lead grade - %

1.32

1.22

1.22

1.18

Average copper grade - %

0.85

0.78

0.81

0.76

Production:





Silver – koz

935

965

3,796

3,561

Gold – koz

0.21

0.22

0.97

0.79

Zinc – kt

4.95

4.82

18.07

17.38

Lead – kt

2.50

2.16

9.22

8.05

Copper – kt

1.57

1.52

6.02

5.44






Cash cost per ounce net of by-products

$

5.34

$

2.42

$

4.15

$

1.79

Sustaining capital cash outflows - ('000s)

$

2,834

$

6,099

$

10,936

$

17,761

AISC

$

9.44

$

9.71

$

7.74

$

7.95

Payable silver sold – koz

736

858

3,253

3,094

 

Morococha mine(1)


Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

Tonnes milled – kt

176.5

163.0

686.2

672.0

Average silver grade – grams per tonne

112

154

126

149

Average zinc grade  - %

3.55

4.02

3.76

3.80

Average lead grade  - %

1.17

1.09

1.21

0.92

Average copper grade  - %

0.44

0.44

0.44

0.66

Production:





Silver – koz

554

740

2,456

2,881

Gold – koz

0.23

0.19

1.39

2.09

Zinc – kt

5.46

5.78

22.50

22.17

Lead – kt

1.61

1.40

6.56

4.69

Copper – kt

0.46

0.45

1.83

3.30






Cash cost per ounce net of by-products

$

10.85

$

(0.58)

$

4.35

$

(4.43)

Sustaining capital (100%) - ('000s)

$

3,945

$

4,357

$

12,599

$

15,038

AISC

$

18.83

$

6.19

$

10.08

$

1.59

Payable silver sold (100%) - koz

515

674

2,335

2,652



(1)

Production figures are for Pan American's 92.3% share only, unless otherwise noted.

 

San Vicente mine(1)


Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

Tonnes milled – kt

91.1

88.3

349.7

332.9

Average silver grade – grams per tonne

328

372

345

362

Average zinc grade - %

1.80

3.66

2.16

2.77

Average lead grade - %

0.15

0.32

0.14

0.34

Average copper grade - %

0.30

0.37

0.31

0.40

Production:





Silver – koz

877

937

3,528

3,544

Gold – koz

0.13

0.12

0.48

0.50

Zinc – kt

1.31

2.82

6.01

7.47

Lead – kt

0.13

0.26

0.42

0.78

Copper – kt

0.22

0.22

0.85

1.02






Cash cost per ounce net of by-products

$

14.38

$

10.20

$

11.77

$

9.83

Sustaining capital (100%) - ('000s)

$

2,048

$

1,637

$

4,960

$

6,983

AISC

$

16.50

$

13.59

$

13.08

$

12.20

Payable silver sold (100%) - koz

1,001

502

4,003

3,054



(1)

Production figures are for Pan American's 95.0% share only, unless otherwise noted.

 

Manantial Espejo mine


Three months ended
December 31,

Year ended
December 31,


2019

2018

2019

2018

Tonnes milled - kt

186.5

198.5

708.6

804.4

Average silver grade – grams per tonne

150

95

127

135

Average gold grade – grams per tonne

1.21

0.98

1.08

1.42

Production:





Silver – koz

817

587

2,599

3,092

Gold – koz

6.71

6.19

22.41

34.55






Cash cost per ounce net of by-products

$

15.47

$

23.03

$

19.59

$

14.83

Sustaining capital - ('000s)

$

696

$

436

$

2,757

$

2,827

AISC

$

16.94

$

27.94

$

18.43

$

16.83

Payable silver sold - koz

928

615

2,460

3,086

 

Gold Segment Mines


Three months ended
December 31, 2019

Year ended
December 31, 2019


Shahuindo

La Arena

Timmins(1)

Shahuindo

La Arena

Timmins(1)

Tonnes milled - kt

3,449.4

5,311.8

473.9

11,218.8

11,189.7

1,480.7

Average silver grade – grams per tonne

7

8

Average gold grade – grams per tonne

0.58

0.41

3.17

0.60

0.41

3.18

Production:







Silver – koz

54.21

10.81

5.53

136.62

26.16

17.53

Gold – koz

43.52

48.43

47.33

145.37

122.52

143.77








Cash cost per ounce net of by-products

$

605

$

580

$

884

$

570

$

644

$

904

Sustaining capital - ('000s)

$

14,156

$

8,382

$

4,066

$

29,873

$

47,557

$

11,035

AISC

$

970

$

764

$

984

$

807

$

1,042

$

998

Payable gold sold - koz

39.85

48.06

46.40

133.30

124.21

143.30



(1)

Timmins refers to the Timmins West and Bell Creek mines.

 

ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES

Per Ounce Measures

Cash Costs and AISC are non-GAAP financial measures that do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

Pan American produces by-product metals incidentally to our silver and gold mining activities. We have adopted the practice of calculating a performance measure with the net cost of producing an ounce of silver and gold, our primary payable metals, after deducting revenues gained from incidental by-product production. This performance measurement has been commonly used in the mining industry for many years and was developed as a relatively simple way of comparing the net production costs of the primary metal for a specific period against the prevailing market price of that metal.

Silver segment Cash Costs and AISC are calculated net of credits for realized revenues from all metals other than silver ("silver segment by-product credits"), and are calculated per ounce of silver sold. Gold segment Cash Costs and AISC are calculated net of credits for realized silver revenues ("gold segment by-product credits"), and are calculated per ounce of gold sold. Consolidated Cash Costs and AISC are based on total silver ounces sold and are net of by-product credits from all metals other than silver ("silver basis consolidated by-product credits").

Prior period cash costs per ounce reported in previous news releases and MD&As were based on cash costs per ounce of payable silver produced and were net of by-product credits calculated with average market prices applied to all metals produced other than silver. Given the increased complexity of the business with the addition of the new gold operations, the Company determined that conforming the calculation of Cash Costs with a consistent method to that used for AISC, using realized by-product sales as by-product credits and based on per ounce of silver sold, would provide a more consistent per-ounce measure; as such, the comparative Cash Costs amounts in this MD&A have been quantified using the current methodology and are different from those previously reported.  As shown in the detailed quantification of consolidated AISC below, corporate general and administrative expense, and exploration and project development expenses are included in the calculation of consolidated (silver basis) AISC, but are not allocated amongst the operations and thus are not included in either the silver or gold segment AISC totals. In prior years these costs were similarly included only in the consolidated all-in-sustaining costs per silver ounce sold ("AISCSOS") metrics and not allocated to each mine's AISCSOS amount; as such, consolidated AISCSOS in previous years included such costs, where total silver segment AISC in the current period does not. A detailed description of how previously reported Cash Costs were quantified is provided in the Company's prior period MD&As.

Cash costs per ounce metrics, net of by-product credits, is used extensively in our internal decision making processes. We believe the metric is also useful to investors because it facilitates comparison, on a mine-by-mine basis, notwithstanding the unique mix of incidental by-product production at each mine, of our operations' relative performance on a period-by-period basis, and against the operations of our peers in the silver industry. Cash costs per ounce is conceptually understood and widely reported in the mining industry.

We believe that AISC, also calculated net of by-products, is a comprehensive measure of the full cost of operating our business, given it includes the cost of replacing silver and gold 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 cash flow.

To facilitate a better understanding of these measure as calculated by the Company, the following tables provide the detailed reconciliation of these measure to the applicable cost items as reported in the consolidated financial statements for the respective periods. All operating results from the mines acquired in the Tahoe acquisition only include results from February 22, 2019 to December 31, 2019 and the year-to-date amounts do not represent a full twelve months of operations.

Consolidated Cash Costs and AISC:


Three months ended
December 31, 2019


Three months ended
December 31, 2018(1)

(In thousands of USD, except as noted)

Silver Segment


Gold Segment


Corporate


Consolidated
(silver basis)(2)


Silver Segment


Corporate


Consolidated
(silver basis)

Production Costs

136,443


93,151




229,594


132,334




132,334

Purchase Price Allocation Inventory Fair Value Adjustment



(1,683)




(1,683)







Net Realizable Value Adjustments

(486)





(486)


(13,263)




(13,263)

Direct Operating Costs

135,957


91,468




227,425


119,070




119,070

Royalties

6,024


1,912




7,936


4,601




4,601

Smelting, refining and other direct selling charges (3)

21,148


326




21,474


14,614




14,614

Cash Costs before By-product Credits

163,129


93,706




256,835


138,285




138,285

Silver segment by-product credits (3)

(113,555)






(107,468)





Gold segment by-product credits (3)


(690)









Consolidated silver basis by-product credits (3)





(312,015)





(107,468)

Cash Costs

49,573


93,016




(55,180)


30,817




30,817















Net Realizable Value Adjustments

486





486


13,263




13,263

Sustaining capital (1)

19,584


26,603




46,187


31,150




31,150

Exploration

929


633


1,000


2,562


1,133


2,375


3,509

Reclamation cost accretion

1,652


777


154


2,583


1,475


156


1,631

General & Administrative expense



10,009


10,009




5,450


5,450

All In Sustaining Costs

72,225


121,029


11,163


6,648


77,839


7,981


85,821















Silver Segment Silver Ounces Sold

6,352






5,299




Gold Segment Gold Ounces Sold


134








Total Silver Ounces Sold





6,392





5,299

Cash Costs per Ounce Sold (4)

7.80


693




(8.63)


5.82




5.82

All-In Sustaining Costs per Ounce Sold

11.37


901




1.04


14.69




16.19

All-In Sustaining Costs per Ounce Sold (Excludes
NRV Adj.) (6)

11.29


901




0.96


12.19




13.69



(1)

2018 AISC per ounce sold included in the table above have been calculated and presented as comparative amounts to conform to the methodology used by the Company to calculate the 2019 AISC per ounce sold. The change in methodology relates to the sustaining capital calculation to account for the adoption of IFRS 16, and the inclusion of lease payments. Previously, leased assets were included as sustaining capital in the period of acquisition, while future related lease payments were excluded.

(2)

Consolidated silver basis calculated by treating all revenues from metals other than silver, including gold, as a by-product credit in Cash Costs. Total silver basis consolidated by-product credits include all silver segment by-product credits, as well as gold revenues from the Gold Segment mines as by-products. Total silver ounces sold likewise includes silver ounces sold from Gold Segment operations.

See next page for Notes 3, 4, 5 and 6.

 


Year ended
December 31, 2019(5)


Year ended
December 31, 2018(1)

(In thousands of USD, except as noted)

Silver Segment


Gold Segment (5)


Corporate


Consolidated
(silver basis)(2)


Silver Segment


Corporate


Consolidated
(silver basis)

Production Costs

516,642


324,655




841,297


511,793




511,793

Purchase Price Allocation Inventory Fair Value Adjustment



(43,395)




(43,395)







Net Realizable Value Adjustments

356





356


(24,329)




(24,329)

Direct Operating Costs

516,998


281,260




798,257


487,463




487,463

Royalties

21,413


5,308




26,721


20,673




20,673

Smelting, refining and other direct selling charges
(3)

72,898


953




73,851


53,119




53,119

Cash Costs before By-product Credits

611,309


287,521




898,829


561,255




561,255

Silver segment by-product credits (3)

(454,472)






(483,325)





Gold segment by-product credits (3)


(1,968)









Consolidated silver basis by-product credits (3)





(1,019,548)





(483,325)

Cash Costs

156,836


285,553




(120,718)


77,930




77,930















Net Realizable Value Adjustments

(356)





(356)


24,329




24,329

Sustaining capital (1)

90,632


88,464




179,096


106,913




106,913

Exploration

3,195


3,404


3,204


9,803


4,476


6,661


11,138

Reclamation cost accretion

6,605


2,637


661


9,903


5,902


622


6,524

General & Administrative expense





31,752


31,752




22,649


22,649

All In Sustaining Costs

256,913


380,058


35,617


109,480


219,551


29,932


249,484















Silver Segment Silver Ounces Sold

24,559






23,160




Gold Segment Gold Ounces Sold


401








Total Silver Ounces Sold





24,676





23,160

Cash Costs per Ounce Sold (4)

6.39


712




(4.89)


3.36




3.36

All-In Sustaining Costs per Ounce Sold

10.46


948




4.44


9.48




10.77

All-In Sustaining Costs per Ounce Sold (Excludes
NRV Adj.) (6)

10.48


948




4.45


8.43




9.72

 

Notes 1 and 2 provided on previous page.

(3)

Included in the revenue line of the consolidated income statements.  By-product credits are reflective of realized metal prices for the applicable periods.

(4)

Cash costs per ounce sold are calculated based on Cash Costs, net of by-product credits divided by per ounce of silver sold and are therefore different than previously reported 2018 "Cash Costs" which were calculated based on cash costs net of by-product credits divided by payable silver ounces produced.  The 2018 cash costs per ounce sold included in the table above have been calculated and presented as comparative amounts to conform to the methodology used by the Company to calculate the 2019 Cash Cost per ounce sold.

(5)

All operating results from the mines acquired in connection with the acquisition of Tahoe Resources Inc. are only from February 22, 2019 to December 31, 2019, and do not represent a full twelve months  of operations.

(6)

The Company makes net realizable value ("NRV") adjustments, when necessary, to ensure inventory costs do not exceed their estimated selling prices less the estimated costs of completion and sale.

 

Sustaining capital is included in AISC, while capital related to growth projects or acquisitions (referred to by the Company as project or investment capital) is not. Inclusion of only sustaining capital in the AISC measure reflects the capital costs associated with current ounces sold as opposed to project capital, which is expected to increase future production.






Reconciliation of payments for mineral properties,
plant and equipment and sustaining capital


Three months ended
December 31,


Year ended
December 31,

(in thousands of USD)


2019


2018


2019


2018

Payments for mineral properties, plant and equipment(1)


50,319


42,302


205,807


144,348

Add/(Subtract)









Advances received for leases


5,726


2,223


19,270


7,911

Non-Sustaining capital


(9,857)


(13,375)


(45,980)


(45,346)

Sustaining Capital


46,187


31,150


179,096


106,913


(1)

As presented on the unaudited interim consolidated statements of cash flows.

 

Silver Segment Cash Costs and AISC by mine:



SILVER SEGMENT

Three months ended December 31, 2019

(In thousands of USD, except as noted)

La Colorada


Dolores


Huaron


Morococha


San
Vicente


Manantial
Espejo


Consolidated
Silver
Segment

Production Costs

18,049


42,949


19,680


19,787


12,336


23,642


136,443

NRV inventory adjustments


(435)





(51)


(486)

On-site direct operating costs

18,049


42,513


19,680


19,787


12,336


23,591


135,957

Royalties

179


2,126




3,494


224


6,024

Smelting, refining & direct selling costs

4,775


21


5,592


4,091


4,509


2,160


21,148

Cash Costs before by-product credits

23,003


44,660


25,272


23,878


20,339


25,975


163,128

Silver segment by-product credits

(15,399)


(40,958)


(21,339)


(18,296)


(5,942)


(11,621)


(113,555)

Cash Costs

7,604


3,702


3,934


5,582


14,396


14,354


49,572

NRV inventory adjustments


435





51


486

Sustaining capital

1,957


8,106


2,834


3,945


2,048


696


19,584

Exploration and project development

565


274



51



39


929

Reclamation cost accretion

144


560


181


109


78


580


1,652

All-in sustaining costs

10,269


13,077


6,949


9,687


16,522


15,720


72,224

Silver segment silver ounces sold (koz)

1,770


1,402


736


515


1,001


928


6,352

Cash cost per ounce sold

4.30


2.64


5.34


10.85


14.38


15.47


7.80

AISC per ounce sold

5.80


9.33


9.44


18.83


16.50


16.94


11.37

AISC per ounce sold (excluding NRV
inventory adjustments)

5.80


9.02


9.44


18.83


16.50


16.88


11.29





SILVER SEGMENT(1)

Three Months Ended December 31, 2018

(In thousands of USD, except as noted)

La Colorada


Dolores


Huaron


Morococha


San
Vicente

Manantial
Espejo


Consolidated
Silver
Segment

Production Costs

16,947


51,107


19,707


16,096


6,984


21,494


132,334

NRV inventory adjustments


(11,440)





(1,822)


(13,263)

On-site direct operating costs

16,947


39,667


19,707


16,096


6,984


19,671


119,070

Royalties

130


1,642




2,554


275


4,601

Smelting, refining & direct selling costs

2,050


31


6,061


2,524


1,816


2,132


14,614

Cash Costs before by-product credits

19,127


41,340


25,768


18,620


11,354


22,078


138,285

Silver segment by-product credits

(14,749)


(35,862)


(23,696)


(19,013)


(6,231)


(7,917)


(107,468)

Cash Costs

4,378


5,479


2,073


(394)


5,123


14,161


30,817

NRV inventory adjustments


11,440





1,822


13,263

Sustaining capital

5,364


13,255


6,099


4,357


1,637


436


31,150

Exploration and project development

711


241


7


123



51


1,133

Reclamation cost accretion

114


351


152


87


63


708


1,475

All-in sustaining costs

10,567


30,766


8,331


4,173


6,823


17,178


77,839

Silver segment silver ounces sold (koz)

1,780


870


858


674


502


615


5,299

Cash cost per ounce sold(2)

2.46


6.30


2.42


(0.58)


10.20


23.03


5.82

AISC per ounce sold

5.93


35.36


9.71


6.19


13.59


27.94


14.69

AISC per ounce sold (excluding NRV
inventory adjustments)

5.93


22.21


9.71


6.19


13.59


24.98


12.19





SILVER SEGMENT

Year ended December 31, 2019

(In thousands of USD, except as noted)

La Colorada


Dolores


Huaron


Morococha


San
Vicente


Manantial
Espejo


Consolidated
Silver
Segment

Production Costs

74,544


183,058


76,962


73,396


46,456


62,226


516,642

NRV inventory adjustments


(7,885)





8,240


356

On-site direct operating costs

74,544


175,174


76,962


73,396


46,456


70,466


516,998

Royalties

595


8,264




11,348


1,206


21,413

Smelting, refining & direct selling costs

17,420


106


21,088


15,675


11,871


6,738


72,898

Cash Costs before by-product credits

92,559


183,544


98,050


89,071


69,675


78,410


611,309

Silver segment by-product credits

(69,905)


(168,333)


(84,544)


(78,907)


(22,573)


(30,211)


(454,472)

Cash Costs

22,654


15,211


13,506


10,164


47,102


48,200


156,836

NRV inventory adjustments


7,885





(8,240)


(356)

Sustaining capital

9,721


49,660


10,936


12,599


4,960


2,757


90,632

Exploration and project development

1,445


1,105


13


327



305


3,195

Reclamation cost accretion

576


2,240


723


436


311


2,319


6,605

All-in sustaining costs(1)

34,396


76,100


25,178


23,526


52,373


45,341


256,913

Silver segment silver ounces sold (koz)

7,583


4,924


3,253


2,335


4,003


2,460


24,559

Cash cost per ounce sold

2.99


3.09


4.15


4.35


11.77


19.59


6.39

AISC per ounce sold

4.54


15.45


7.74


10.08


13.08


18.43


10.46

AISC per ounce sold (excluding NRV
inventory adjustments)

4.54


13.85


7.74


10.08


13.08


21.78


10.48




SILVER SEGMENT(1)

Year ended December 31, 2018

(In thousands of USD, except as noted)

La Colorada


Dolores


Huaron


Morococha


San
Vicente


Manantial
Espejo

Consolidated
Silver
Segment

Production Costs

70,248


179,165


75,382


68,068


33,461


85,468


511,793

NRV inventory adjustments



(24,567)








238


(24,329)

On-site direct operating costs

70,248


154,598


75,382


68,068


33,461


85,705


487,463

Royalties

616


7,991




9,943


2,124


20,673

Smelting, refining & direct selling costs

8,537


129


21,326


13,313


7,451


2,363


53,119

Cash Costs before by-product credits

79,401


162,718


96,708


81,381


50,855


90,192


561,256

Silver segment by-product credits

(63,442)


(170,337)


(91,155)


(93,142)


(20,829)


(44,420)


(483,325)

Cash Costs

15,959


(7,618)


5,553


(11,761)


30,026


45,772


77,931

NRV inventory adjustments


24,567





(238)


24,329

Sustaining capital

15,462


48,842


17,761


15,038


6,983


2,827


106,913

Exploration and project development

880


1,594


660


598



744


4,476

Reclamation cost accretion

457


1,405


609


347


252


2,832


5,902

All-in sustaining costs

32,758


68,790


24,583


4,222


37,261


51,937


219,552

Silver segment silver ounces sold (koz)

7,069


4,205


3,094


2,652


3,054


3,086


23,160

Cash cost per ounce sold(2)

2.26


(1.81)


1.79


(4.43)


9.83


14.83


3.36

AISC per ounce sold

4.63


16.36


7.95


1.59


12.20


16.83


9.48

AISC per ounce sold (excluding NRV
inventory adjustments)

4.63


10.52


7.95


1.59


12.20


16.91


8.43



(1)

2018 AISC per ounce sold included in the table above have been calculated and presented as comparative amounts to conform to the methodology used by the company to calculate the 2019 AISC per ounce sold. The change in methodology relates to the sustaining capital calculation to account for the adoption of IFRS 16, and sustaining capital now includes lease payments. Previously leased assets were included as sustaining capital in the period of acquisition, while future related lease payments were excluded.

(2)

Cash costs per ounce sold are calculated based on Cash Costs, net of by-product credits divided by per ounce of silver sold and  are therefore different from previously reported 2018 "Cash Costs" which were calculated based on cash costs net of by-product credits divided by payable silver ounces produced. The  2018 cash costs per ounce sold included in the table above have been calculated and presented as comparative amounts to conform to the methodology used by the company to calculate the 2019 cash cost per ounce sold.

 

Gold Segment Cash Costs and AISC by mine:



GOLD SEGMENT

Three months ended December 31, 2019

(In thousands of USD, except as noted)

Shahuindo


La Arena


Timmins(1)


Total

Production Costs

25,375


28,603


39,173


93,151

Purchase Price Allocation Inventory Fair Value Adjustment

(916)


(750)


(17)


(1,683)

NRV inventory adjustments




On-site direct operating costs

24,459


27,853


39,156


91,468

Royalties



1,912


1,912

Smelting, refining & direct selling costs

173


118


35


326

Cash Costs before by-product credits

24,632


27,971


41,103


93,706

Gold segment by-product credits

(507)


(92)


(91)


(690)

Cash Costs of Sales

24,125


27,879


41,012


93,016

NRV inventory adjustments




Sustaining capital

14,156


8,382


4,066


26,603

Exploration and project development

82


33


518


633

Reclamation cost accretion

290


447


40


777

All-in sustaining costs

38,653


36,740


45,636


121,030

Gold segment gold ounces sold

39,849


48,062


46,400


134,310

Cash cost per ounce sold

605


580


884


693

AISC per ounce sold

970


764


984


901

AISC per ounce sold (excluding NRV inventory adjustments)

970


764


984


901





GOLD SEGMENT

Year ended December 31, 2019

(In thousands of USD, except as noted)

Shahuindo

La Arena

Timmins(1)

Total

Production Costs

90,877


99,915


133,863


324,655

Purchase Price Allocation Inventory Fair Value Adjustment

(14,003)


(19,978)


(9,414)


(43,395)

NRV inventory adjustments




On-site direct operating costs

76,874


79,937


124,449


281,260

Royalties



5,308


5,308

Smelting, refining & direct selling costs

501


345


107


953

Cash Costs before by-product credits

77,375


80,282


129,864


287,521

Gold segment by-product credits

(1,411)


(278)


(279)


(1,968)

Cash Costs of Sales

75,964


80,004


129,585


285,553

NRV inventory adjustments




Sustaining capital

29,873


47,557


11,035


88,464

Exploration and project development

787


358


2,259


3,404

Reclamation cost accretion

983


1,515


139


2,637

All-in sustaining costs

107,607


129,434


143,019


380,059

Gold segment gold ounces sold

133,298


124,206


143,300


400,804

Cash cost per ounce sold

570


644


904


712

AISC per ounce sold

807


1,042


998


948

AISC per ounce sold (excluding NRV inventory adjustments)

807


1,042


998


948



(1)

Timmins refers to the Timmins West and Bell Creek mines.

 

Adjusted Earnings and Basic Adjusted Earnings Per Share

Adjusted earnings and basic adjusted earnings per share are non-GAAP measures that the Company considers to better reflect normalized earnings as it eliminates items that in management's judgment are subject to volatility as a result of factors which are unrelated to operations in the period, and/or relate to items that will settle in future periods. Certain items that become applicable in a period may be adjusted for, with the Company retroactively presenting comparable periods with an adjustment for such items and conversely, items no longer applicable may be removed from the calculation. The Company adjusts certain items in the periods that they occurred but does not reverse or otherwise unwind the effect of such items in future periods. Neither adjusted earnings nor basic adjusted earnings per share have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies.

The following table shows a reconciliation of adjusted loss and earnings for the year and three months ended December 31, 2019 and 2018, to the net earnings for each period.



Three months ended
December 31,


 

Year ended
December 31,

(In thousands of USD, except as noted)


2019


2018


2019


2018

Net earnings (loss) for the period


$

51,706


$

(63,577)


$

111,244


$

12,041

Adjust for:









Loss on derivatives



60


14


1,078

Impairment charges


40,050


27,789


40,050


27,789

Write-down of project development costs




1,882


Unrealized foreign exchange (gains) losses


(1,395)


(348)


6,057


10,337

Net realizable value adjustments to heap inventory


4,128


12,977


29,833


24,082

Unrealized (gains) losses on commodity and foreign currency contracts


(1,046)


765


(646)


(2,481)

Share of (income) loss from associate and dilution gain


(14,246)


182


(15,245)


(13,679)

Reversal of previously accrued tax liabilities





(1,188)

Metal inventory loss



4,670



4,670

(Gains) losses on sale of mineral properties, plant and equipment


(1,040)


56


(3,858)


(7,973)

Closure and decommissioning liability adjustment



2,832



2,832

Transaction and integration costs


(197)


10,229


7,515


10,229

Adjust for effect of taxes relating to the above


$

(1,455)


$

(5,832)


$

(11,208)


$

(9,914)

Adjust for effect of foreign exchange on taxes


(7,597)


8,175


(7,651)


1,611

Adjusted earnings (loss) for the period


$

68,908


$

(2,022)


$

157,987


$

59,434

Weighted average shares for the period


209,671


153,352


201,397


153,315

Adjusted earnings (loss) per share for the period


$

0.33


$

(0.01)


$

0.78


$

0.39


 

About Pan American Silver

Pan American is the world's second largest primary silver producer, providing enhanced exposure to silver through a diversified portfolio of assets, large reserves and growing production. We own and operate mines in Mexico, Peru, Canada, Argentina and Bolivia. In addition, we own the Escobal mine in Guatemala that is currently not operating. Pan American has a 25-year history of operating in Latin America, earning an industry-leading reputation for operational excellence and corporate social responsibility. We are headquartered in Vancouver, B.C. and our shares trade on NASDAQ and the Toronto Stock Exchange under the symbol "PAAS".

Learn more at panamericansilver.com.

Technical information contained in this news release with respect to Pan American has been reviewed and approved by Martin Wafforn, P.Eng., Senior Vice President, Technical Services & Process Optimization, who is the Company's Qualified Person for the purposes of National Instrument 43-101. For additional information about Pan American's material mineral properties, please refer to Pan American's Annual Information Form dated March 12, 2019, filed at www.sedar.com, or Pan American's most recent Form 40-F furnished to the SEC.

Cautionary Note Regarding Forward-Looking Statements and Information

Certain of the statements and information in this news release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian provincial securities laws. All statements, other than statements of historical fact, are forward-looking statements or information. Forward-looking statements or information in this news release relate to, among other things: future financial or operational performance, including our estimated production of silver, gold and other metals in 2020, our estimated Cash Costs and AISC in 2020 and future operating margins and cash flow; the ability of the Company to successfully complete any capital projects, the expected economic or operational results derived from those projects, and the impacts of any such projects on the Company; the approval or the amount of any future cash dividends; the future results of exploration activities; and our portfolio growth profile.

These forward-looking statements and information reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include: our ability to realize the anticipated benefits and opportunities as a result of the acquisition of Tahoe; tonnage of ore to be mined and processed; ore grades and recoveries; prices for silver, gold and base metals remaining as estimated; currency exchange rates remaining as estimated; capital, decommissioning and reclamation estimates; our development projects are completed and perform in accordance with current expectations; our mineral reserve and resource estimates and the assumptions upon which they are based; prices for energy inputs, labour, materials, supplies and services (including transportation); no labour-related disruptions at any of our operations; no unplanned delays or interruptions in scheduled production; all necessary permits, licenses and regulatory approvals for our operations are received in a timely manner; our ability to secure and maintain title and ownership to properties and the surface rights necessary for our operations; and our ability to comply with environmental, health and safety laws. The foregoing list of assumptions is not exhaustive.

The Company cautions the reader that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements or information contained in this news release and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in silver, gold and base metal prices; fluctuations in prices for energy inputs, labour, materials, supplies and services (including transportation); fluctuations in currency markets (such as such as the Canadian dollar, Peruvian sol, Mexican peso, Argentine peso, Bolivian boliviano, and Guatemalan quetzal versus the U.S. dollar); operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inadequate insurance, or inability to obtain insurance, to cover these risks and hazards; employee relations; relationships with, and claims by, local communities and indigenous populations; our ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in laws, regulations and government practices in the jurisdictions where we operate, including environmental, export and import laws and regulations; changes in national and local government, legislation, taxation, controls or regulations and political, legal or economic developments in Canada, the United States, Mexico, Peru, Argentina, Bolivia, Guatemala or other countries where the Company may carry on business, including legal restrictions relating to mining, including those in Chubut, Argentina, risks relating to expropriation, and risks relating to the constitutional court-mandated ILO 169 consultation process in Guatemala; risks of liability relating to our past sale of the Quiruvilca mine in Peru; diminishing quantities or grades of mineral reserves as properties are mined; increased competition in the mining industry for equipment and qualified personnel; and those factors identified under the caption "Risks Related to Pan American's Business" in the Company's most recent form 40-F and Annual Information Form,  each filed with the United States Securities and Exchange Commission and Canadian provincial securities regulatory authorities, respectively. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Investors are cautioned against undue reliance on forward-looking statements or information. Forward-looking statements and information are designed to help readers understand management's current views of our near and longer term prospects and may not be appropriate for other purposes. The Company does not intend, nor does it assume any obligation to update or revise forward-looking statements or information, whether as a result of new information, changes in assumptions, future events or otherwise, except to the extent required by applicable law.

Cision View original content:http://www.prnewswire.com/news-releases/pan-american-silver-reports-record-quarterly-cash-flow-from-operations-of-129-5-million-in-q4-2019--301008026.html

SOURCE Pan American Silver Corp.


Source: Pan American Silver Corp.