All amounts are expressed in US$ unless otherwise indicated. Results are unaudited and could change based on final audited financial results. This news release contains forward-looking information about expected future events and financial and operating performance of the Company. Readers should refer to the risks and assumptions set out in the "Cautionary Note Regarding Forward-Looking Statements and Information" at the end of this news release.
This news release refers to measures that are not generally accepted accounting principle ("non-GAAP") financial measures, including cash costs per payable ounce of silver ("Cash Costs") and all-in sustaining costs per silver ounce sold ("AISCSOS"). Please refer to the section titled "Alternative Performance (non-GAAP) Measures" at the end of this news release for further information on these measures.
VANCOUVER, Jan. 12, 2017 /CNW/ - Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA) ("Pan American", or the "Company") today reports its preliminary operating results for the fourth quarter ("Q4") and full year 2016, and announces its three-year outlook for production and costs. The Company plans to release its unaudited financial results for Q4 and full year 2016 on February 14, 2017.
"Pan American has achieved the successful transformation to a low-cost silver producer in 2016. In addition to beating our guidance on annual silver production, Cash Costs of $6.29 per ounce came in well below our original guidance provided in January 2016," said Michael Steinmann, President and Chief Executive Officer of the Company. "Our three-year outlook will build on the progress we made in 2016, with the potential for strong production growth and further cost reductions stemming from our mine expansions and continued capital spending discipline."
Consolidated Preliminary 2016 Operating Results
Q4 2016 |
Full Year 2016 |
|
Silver production (million ounces) |
6.3 |
25.4 |
Gold production (thousand ounces) |
43.9 |
183.9 |
Zinc production (thousand tonnes) |
13.2 |
51.9 |
Lead production (thousand tonnes) |
5.5 |
20.2 |
Copper production (thousand tonnes) |
3.1 |
14.4 |
Cash Costs(1) ($/ounce) |
6.66 |
6.29 |
(1) |
Preliminary Cash Costs per payable ounce of silver, net of by-product credits. Average by-product metal prices for 2016 were: Au $1,251/oz, Zn $2,095/tonne, Pb $1,872/tonne, and Cu $4,860/tonne. Cash Costs is a non-GAAP measure and readers should refer to the information under the heading "Alternative Performance (non-GAAP) Measures" at the end of this news release for more information. |
2016 Operating Highlights:
Preliminary 2016 Operating Results by Mine
Mine |
Silver Production |
Gold Production |
Cash Costs |
|
La Colorada |
5.80 |
2.93 |
6.15 |
|
Dolores |
3.84 |
102.76 |
-1.08 |
|
Alamo Dorado |
1.86 |
8.38 |
16.02 |
|
Huaron |
3.81 |
0.81 |
5.79 |
|
Morococha (92.3%)(2) |
2.54 |
2.14 |
4.21 |
|
San Vicente (95%)(2) |
4.43 |
n/a |
11.95 |
|
Manantial Espejo |
3.14 |
66.89 |
4.28 |
|
Total(3) |
25.42 |
183.92 |
6.29 |
(1) |
Preliminary Cash Costs per payable ounce of silver, net of by-product credits. Average by-product metal prices for 2016 were: Au $1,251/oz, Zn $2,095/tonne, Pb $1,872/tonne, and Cu $4,860/tonne. Cash Costs is a non-GAAP measure and readers should refer to the information under the heading "Alternative Performance (non-GAAP) Measures" at the end of this news release for more information. |
(2) |
Reflects Pan American's ownership in the operation. |
(3) |
Totals may not add up due to rounding. |
2017 Guidance by Mine
Mine |
Silver Production |
Gold Production |
Cash Costs ($/ounce)(1) |
La Colorada |
6.4 - 6.9 |
3.3 - 3.5 |
3.35 - 3.95 |
Dolores |
4.0 - 4.5 |
109.1 - 115.0 |
1.25 - 2.25 |
Alamo Dorado |
0.3 |
1.4 - 1.5 |
18.00 - 20.00 |
Huaron |
3.7 - 3.8 |
0.3 - 0.4 |
5.95 - 6.95 |
Morococha (92.3%)(2) |
2.5 - 2.6 |
2.9 - 3.1 |
3.15 - 4.15 |
San Vicente (95%)(2) |
4.4 - 4.5 |
0.5 - 0.6 |
10.90 - 11.90 |
Manantial Espejo |
3.3 - 3.4 |
37.5 - 41.0 |
15.35 - 16.25 |
Total(3) |
24.5 - 26.0 |
155.0 - 165.0 |
6.45 - 7.45 |
(1) |
Cash Costs is a non-GAAP measure and readers should refer to the information under the heading "Alternative Performance (non-GAAP) Measures" at the end of this news release for more information. |
(2) |
Reflects Pan American's ownership in the operation. |
(3) |
Totals may not add up due to rounding. |
Three-year Outlook
The following table provides Pan American's outlook for the years 2017 to 2019 (the "Three-year Outlook"):
2017 Guidance |
2018 Outlook |
2019 Outlook |
|
Silver production (million ounces) |
24.5 – 26.0 |
26.0 - 28.0 |
26.5 – 29.5 |
Gold production (thousand ounces) |
155 - 165 |
170 - 185 |
175 - 200 |
Zinc production (thousand tonnes) |
56.5 - 58.5 |
59.0 - 63.0 |
55.0 - 65.0 |
Lead production (thousand tonnes) |
19.0 - 20.0 |
23.0 - 26.0 |
23.0 - 27.0 |
Copper production (thousand tonnes) |
8.75 - 9.25 |
6.00 - 8.00 |
4.00 - 4.20 |
Cash Costs(1)($/ounce) |
6.45 - 7.45 |
5.60 - 7.10 |
5.20 – 6.80 |
Sustaining capital ($ millions) |
82 - 88 |
75 - 85 |
75 - 90 |
AISCSOS(1) ($/ounce) |
11.50 - 12.90 |
10.00 - 12.20 |
9.30 - 11.60 |
(1) |
Cash Costs and AISCSOS are non-GAAP measures. Please refer to the section titled "Alternative Performance (non-GAAP) Measures" at the end of this news release for further information on these measures. |
The following table provides the price and foreign exchange rate assumptions used to forecast total Cash Costs and AISCSOS in the Three-year Outlook:
2017, 2018 and 2019 |
||
Metal prices |
||
Silver ($/ounce) |
17.00 |
|
Gold ($/ounce) |
1,200 |
|
Zinc ($/tonne) |
2,500 |
|
Lead ($/tonne) |
2,100 |
|
Copper ($/tonne) |
5,400 |
|
Average annual exchange rates relative to 1 USD |
||
Mexican peso |
20 |
|
Peruvian sol |
3.30 |
|
Argentine peso |
17.05 |
|
Bolivian boliviano |
7 |
Outlook Highlights:
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 the Company's material mineral properties, please refer to the Company's Annual Information Form dated March 24, 2016, filed at www.sedar.com.
Unaudited Q4 and full year 2016 Results Release and Conference Call
Pan American plans to release its unaudited results for the fourth quarter and year-ended December 31, 2016 on Tuesday, February 14, 2017 after market close.
A conference call to discuss the results is planned for Wednesday, February 15 at 1:00 pm ET (10:00 am PT). To participate, please dial: toll-free in Canada and the U.S. at 1-800-319-4610, and International at 604-638-5340.
A live audio webcast will be available on the Company's website at www.panamericansilver.com. A replay of the webcast will also be available shortly after the call on the website.
About Pan American Silver
Pan American Silver Corp. is one of the largest primary silver producers in the world. We own and operate seven mines located in Mexico, Peru, Argentina and Bolivia. Pan American also owns several development projects in the USA, Mexico, Peru and Argentina. Our mission is to be the world's pre-eminent silver producer, with a reputation for excellence in discovery, engineering, innovation and sustainable development. The Company is headquartered in Vancouver, B.C. and our shares trade on NASDAQ (PAAS) and the Toronto Stock Exchange (PAA).
For more information, visit: www.panamericansilver.com.
Alternative Performance (non-GAAP) Measures
In this press release we refer to measures that are not generally accepted accounting principle ("non-GAAP") financial measures. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning as prescribed by IFRS as an indicator of performance, and may differ from methods used by other companies with similar descriptions. These non-GAAP financial measures include:
Readers should refer to the "Alternative Performance (non-GAAP) Measures" section of the Company's management's discussion and analysis for the three and nine months ended September 30, 2016 (the "Q3 2016 MD&A") for a more detailed discussion of these and other non-GAAP measures and their calculation.
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 2017 and beyond, and our estimated Cash Costs and AISCSOS in 2017 and beyond; the ability of the Company to successfully complete any capital investment programs and projects, and the impacts of any such programs and projects on the Company, including with respect to production; and the expenditures and success related to any future exploration or development programs.
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: 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 mineral reserve and recourse 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; 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 the Canadian Dollar, Peruvian Sol, Mexican Peso, Argentine Peso and Bolivian Boliviano 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; legal restrictions relating to mining, including in Chubut, Argentina; risks relating to expropriation; 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 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.
SOURCE Pan American Silver Corp.
Siren Fisekci, VP, Investor Relations & Corporate Communications, Ph: 604-806-3191
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