Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts
Q4 2018 NEWS RELEASE
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
PAN AMERICAN SILVER CORP. 1
Pan American Silver Reports Unaudited 2018 Annual and Fourth Quarter Results
All financial figures are in U.S. dollars unless otherwise indicated.
Vancouver, B.C. - February 20, 2019 - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) today reported
unaudited financial results for the year-ended December 31, 2018 ("YE 2018") and the fourth quarter ("Q4 2018").
These results are preliminary and could change based on final audited results. Preliminary operating results were
previously reported on January 21, 2019.
• Annual revenue totaled $784.5 million, and net cash generated from operating activities was $155.0
million.
• Annual net earnings of $12.0 million ($0.07 basic earnings per share), and adjusted annual earnings of
$59.4 million ($0.39 basic adjusted earnings per share).
• Annual silver production totaled 24.8 million ounces with all-in sustaining costs per silver ounce sold
(“AISCSOS”) of $10.73, or $9.68 excluding net realizable value ("NRV") inventory adjustments.
• Cash costs per payable ounce of silver, net of by-product credits ("cash costs") of $3.35 per ounce in 2018.
• Advanced the COSE and Joaquin mine developments for initial production in 2019.
• At December 31, 2018, the Company had cash and short-term investment balances of $212.5 million and
working capital of $397.8 million. Year-end debt of $6.7 million related entirely to lease liabilities.
“Pan American's operations demonstrated solid performance in 2018, highlighted by the lowest cash costs on
record since 2006. This performance resulted in strong cash flow generation and a healthy financial position at
year end," said Michael Steinmann, President and Chief Executive Officer of the Company. "Importantly, we
advanced our strategy of developing new catalysts to generate value for shareholders. Our acquisition of Tahoe
Resources will result in a more diversified Pan American with a strong portfolio of cash-generating assets and
superior growth opportunities. In addition, our major exploration discovery at La Colorada demonstrates a
significant opportunity for long-term organic growth."
Consolidated Q4 2018 Highlights:
• Revenue in Q4 2018 was $173.4 million, reflecting lower prices for all metals and lower quantities of silver,
gold, and copper sold due to a build in inventories at San Vicente and La Colorada (approximate revenue
impact of $8.4 million), as well as lower production at Dolores.
• Net cash generated from operating activities was $11.9 million.
• Net loss was $63.6 million ($0.42 basic loss per share), which included a $27.8 million impairment charge
related to the Manantial Espejo/COSE/Joaquin assets, a $13.3 million reduction from NRV inventory
adjustments, $10.2 million in costs related to the Tahoe Resources Inc. ("Tahoe") transaction, $8.2 million
in tax expense from changes in foreign exchange rates, and a $4.7 million credit loss related to a third party
refinery.
• The impairment of the Manantial Espejo/COSE/Joaquin assets reflects the impact of the new export tax
introduced in Argentina in late 2018, and the decline in short-term consensus metal prices.
• Adjusted loss was $2.0 million ($0.01 basic adjusted loss per share).
• Silver production was 6.1 million ounces at cash costs of $6.12 per ounce. Q4 2018 cash costs were
impacted by lower by-product metal prices and reduced gold production.
• AISCSOS were $15.86 in Q4 2018, or $13.36 excluding NRV inventory adjustments. AISCSOS were impacted
by less silver ounces sold, lower by-product metal prices and higher sustaining capital expenditures.
• The Board of Directors has approved a cash dividend of $0.035 per common share, or approximately $5.4
million in aggregate cash dividends, payable on or about March 15, 2019, to holders of record of Pan
American Silver's common shares as of the close on March 4, 2019. Pan American Silver's dividends are
Q4 2018 NEWS RELEASE
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
PAN AMERICAN SILVER CORP. 2
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.
The foregoing contains measures that 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.
Amended and Restated Credit Agreement
On February 1, 2019, the Company entered into an Amending and Restating Credit Agreement with a syndicate of
banks to extend and increase its existing credit facility. In conjunction with the closing of the Tahoe transaction, the
credit facility is expected to increase to $500 million and would mature on February 1, 2023.
Tahoe transaction
All required regulatory, shareholder and court approvals have been received for the plan of arrangement (the
"Arrangement"), whereby Pan American will acquire all of the outstanding shares of Tahoe. The Arrangement is
anticipated to be completed on or about February 22, 2019.
Pan American receives award for social and environmental responsibility
Pan American is pleased to announce that Matt Andrews, Vice President Environment and Sustainability, and
Monica Moretto, Director Sustainability, are the 2018 recipients of the Robert R. Hedley Award for Excellence in
Social and Environmental Responsibility from the Association for Mineral Exploration (AME). In the AME's news
release, dated December 6, 2018, announcing the 2018 winners, the organization states that Mr. Andrews' and Ms.
Moretto's leadership "has created an environment within Pan American Silver Corp. of respect for social and
environmental principles on all its projects".
Q4 2018 NEWS RELEASE
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
PAN AMERICAN SILVER CORP. 3
CONSOLIDATED RESULTS
December 31,
2018
December 31,
2017
Shares outstanding (millions) 153,448 153,303
Three months ended
December 31,
Year ended
December 31,
2018 2017 2018 2017
FINANCIAL
Revenue $ 173,357 $ 226,031 $ 784,495 $ 816,828
Mine operating (loss) earnings $ (4,666) $ 43,285 $ 100,897 $ 168,760
Net (loss) earnings $ (63,577) $ 49,664 $ 12,041 $ 123,451
Per share (1) $ (0.42) $ 0.32 $ 0.07 $ 0.79
Adjusted (loss) earnings (2) $ (2,022) $ 19,219 $ 59,434 $ 77,705
Per share (1) $ (0.01) $ 0.13 $ 0.39 $ 0.51
Net cash generated from operating activities $ 11,930 $ 79,291 $ 154,978 $ 224,559
Net cash generated from operating activities before changes in
working capital (2) $ 16,827 $ 64,098 $ 159,239 $ 212,850
Sustaining capital expenditures $ 31,329 $ 28,668 $ 105,229 $ 84,420
Project capital expenditures $ 11,849 $ 13,650 $ 41,292 $ 61,429
Dividend per share $ 0.035 $ 0.025 $ 0.14 $ 0.10
OPERATIONAL
Production
Silver (thousand ounces) 6,128 6,579 24,776 24,979
Gold (thousand ounces) 37.2 43.7 178.9 160.0
Zinc (thousand tonnes) 18.5 14.7 64.8 55.3
Lead (thousand tonnes) 6.3 5.4 22.4 21.5
Copper (thousand tonnes) 2.2 3.0 9.8 13.4
Average realized prices
Silver ($/ounce) $ 14.35 $ 16.65 $ 15.61 $ 16.99
Gold ($/ounce) $ 1,232 $ 1,276 $ 1,272 $ 1,257
Zinc ($/tonne) $ 2,508 $ 3,282 $ 2,846 $ 2,929
Lead ($/tonne) $ 1,914 $ 2,472 $ 2,189 $ 2,351
Copper ($/tonne) $ 6,098 $ 6,811 $ 6,519 $ 6,174
Cash costs (per payable ounce of silver, net of by-product credits)(2) $ 6.12 $ 3.18 $ 3.35 $ 4.55
All-in sustaining costs per silver ounce sold(2) $ 15.86 $ 10.86 $ 10.73 $ 10.79
All-in sustaining costs per silver ounce sold, excluding NRV inventory
adjustments(2) $ 13.36 $ 10.03 $ 9.68 $ 10.28
(1) Per share amounts are based on basic weighted average common shares.
(2) Non-GAAP measures: adjusted (loss) earnings, basic adjusted (loss) earnings per share, net cash generated from operating activities before changes in
working capital, cash costs, and all-in sustaining costs per silver ounce sold (inclusive and exclusive of NRV inventory adjustments) 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.
Q4 2018 NEWS RELEASE
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
PAN AMERICAN SILVER CORP. 4
MINE OPERATING RESULTS
Three Months Ended
December 31, 2018
Three Months Ended
December 31, 2017
Production
Cash Costs(1)
Production
Cash Costs(1) Ag (Moz) Au (koz) Ag (Moz) Au (koz)
La Colorada 2.1 1.2 $1.73 1.9 1.3 $0.43
Dolores 0.8 29.4 $7.06 1.3 31.2 ($3.93)
Alamo Dorado — — NA — 0.1 $2.09
Huaron 1.0 0.2 $2.82 1.0 0.2 $2.08
Morococha (2) 0.7 0.2 $0.61 0.7 0.8 ($7.42)
San Vicente (3) 0.9 0.1 $9.23 1.1 0.1 $9.04
Manantial Espejo 0.6 6.2 $25.53 0.6 10.0 $26.52
TOTAL 6.1 37.2 $6.12 6.6 43.7 $3.18
Year Ended
December 31, 2018
Year Ended
December 31, 2017
Production
Cash Costs(1)
Production
Cash Costs(1) Ag (Moz) Au (koz) Ag (Moz) Au (koz)
La Colorada 7.6 4.4 $2.02 7.1 4.3 $2.08
Dolores 4.1 136.6 ($1.87) 4.2 103.0 ($1.65)
Alamo Dorado — — NA 0.6 2.1 $16.49
Huaron 3.6 0.8 $1.63 3.7 1.1 $1.35
Morococha(2) 2.9 2.1 ($4.34) 2.6 3.5 ($5.34)
San Vicente(3) 3.5 0.5 $10.12 3.6 0.5 $11.85
Manantial Espejo 3.1 34.6 $13.91 3.1 45.3 $18.25
TOTAL 24.8 178.9 $3.35 25.0 160.0 $4.55
Totals may not add up due to rounding.
(1) Cash costs is a non-GAAP measure. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information
on this measure.
(2) Morococha data represents Pan American Silver's 92.3% interest in the mine's production.
(3) San Vicente data represents Pan American Silver's 95.0% interest in the mine's production.
Q4 2018 NEWS RELEASE
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
PAN AMERICAN SILVER CORP. 5
CAPITAL EXPENDITURES(1)
Annual
Forecast(2)
Year ended
December 31,
(in millions of USD) 2018 2018 2017
La Colorada 17.5 – 18.5 16.9 13.3
Dolores 42.0 – 44.0 48.5 38.4
Huaron 17.0 – 17.5 15.9 8.8
Morococha 14.5 – 15.0 14.1 12.5
San Vicente 6.5 – 7.0 7.0 8.1
Manantial Espejo 2.5 – 3.0 2.8 3.3
Sustaining Capital Total(1) 100.0 - 105.0 105.2 84.4
Mexico project capital 15.5 15.9 56.8
Joaquin and COSE projects(3) 24.5 25.4 4.7
Project Capital Total(1) 40.0 41.3 61.5
Consolidated Total 140.0 – 145.0 146.5 145.9
(1) The total sustaining capital amounts capitalized in 2018 were $0.8 million less than the $106.0 million of 2018 sustaining capital cash outflows. Project
capital amounts capitalized in 2018 were $3.4 million less than the $44.7 million of 2018 project capital cash outflows. The sustaining capital cash
outflows are included in the 2018 AISCSOS calculation, shown in the “Alternative Performance (non-GAAP) Measures” section of this news release, and in
the tables included for the individual mines in the "Mine Operating Results" section of this news release; these amounts are different than the amounts
capitalized in the period, which are provided in the table above. These differences are due to the timing difference between the cash payment of capital
investments compared with the period in which investments are capitalized.
(2) Forecast amount per Q3 2018 MD&A dated November 6, 2018.
(3) Total expenditures of $9.7 million were incurred in 2017 for the Joaquin and COSE projects, of which $5.0 million was expensed as part of 2017
exploration and project development expenses, and the remaining $4.7 million was capitalized. All Joaquin and COSE project expenditures were
capitalized in 2018.
Sustaining capital of $105.2 million in 2018 was slightly above our forecast range of $100 to $105 million, reflecting
higher pre-stripping and leach pad expansionary activities at Dolores, largely offset with savings on the tailings
storage facility expansion at Huaron and deferral of certain exploration spending, infrastructure upgrades and
equipment procurements.
Project capital of $41.3 million, compared with a forecast of $40 million, was directed at the COSE and Joaquin
mine developments in Argentina, as well as investments at Dolores and La Colorada.
Q4 2018 NEWS RELEASE
All amounts expressed in U.S. dollars unless otherwise indicated
Unaudited tabular amounts are in thousands of U.S. dollars except number of shares,
options, warrants, and per share amounts, unless otherwise noted
PAN AMERICAN SILVER CORP. 6
2019 GUIDANCE
There are no revisions to the guidance for 2019 that Pan American provided in its news release dated January 21,
2019, as provided in the table below. The guidance does not include the assets to be acquired under the
Arrangement with Tahoe. Management intends to update the guidance to include these assets and allocation of
new general and administrative costs in the second quarter of 2019. We may also revise guidance during the year
to reflect actual results to date and those anticipated for the remainder of the year.
2019 Guidance
Production
Silver (million ounces) 26.5 - 27.5
Gold (thousand ounces) 162.5 - 172.5
Zinc (thousand tonnes) 65.0 - 67.0
Lead (thousand tonnes) 24.0 - 25.0
Copper (thousand tonnes) 9.8 - 10.3
Cash Costs(1)($/ounce) 6.50 - 7.50
AISCSOS(1) ($) 10.80 - 12.30
Sustaining capital ($millions) 85 - 90
Project capital ($millions) 30
Assumptions used to forecast total cash costs and AISCSOS for 2019
Metal prices
Silver ($/ounce) 14.50
Gold ($/ounce) 1,250
Zinc ($/tonne) 2,600
Lead ($/tonne) 1,950
Copper ($/tonne) 6,150
Average annual exchange rates relative to 1.00 U.S. dollar
Mexican peso 19.50
Peruvian sol 3.33
Argentine peso 41.80
Bolivian boliviano 6.91
(1) Cash Costs and AISCSOS are non-GAAP measures. Please refer to the “Alternative Performance (non-GAAP) Measures” section of this news release for
further information on these measures.
Additional details on the Company's 2019 guidance can be found in the January 21, 2019 news release
entitled, "Pan American Silver Announces Preliminary 2018 Operating Results and Guidance for 2019" available
at www.panamericansilver.com and as filed on SEDAR at www.sedar.com.
Q4 2018 NEWS RELEASE
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
PAN AMERICAN SILVER CORP. 7
Fourth Quarter and Year End 2018 Unaudited Results Conference Call and Webcast
Date: February 21, 2019
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: www.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 www.panamericansilver.com. An archive of the webcast will also be available for three
months.
Corporate Office:
625 Howe Street, Suite 1440
Vancouver, British Columbia
V6C 2T6 Canada
Tel: +1 604 684-1175
Fax: +1 604 684-0147
About Pan American Silver
Pan American Silver Corp. 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 six mines in
Mexico, Peru, Argentina and Bolivia. Pan American Silver maintains a strong balance sheet, has an established
management team with proven operating expertise, and is committed to responsible development. Founded in 1994,
the Company is headquartered in Vancouver, B.C. and our shares trade on NASDAQ and the Toronto Stock Exchange
under the symbol "PAAS".
For more information, visit: www.panamericansilver.com.
For more information contact:
Siren Fisekci
VP, Investor Relations & Corporate Communications
Ph: 604-806-3191
Email: [email protected]
Alternative Performance (Non-GAAP) Measures
In this news 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:
• Cash costs per payable ounce of silver, net of by-product credits ("cash costs"). 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.
• Adjusted earnings (loss) and adjusted earnings (loss) per share. The Company believes that these measures
better reflect normalized earnings as they eliminate 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.
Q4 2018 NEWS RELEASE
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
PAN AMERICAN SILVER CORP. 8
• All-in sustaining costs per silver ounce sold ("AISCSOS"). 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.
• Net cash generated from operating activities before changes in working capital is calculated as "Net cash
generated from operating activities" less "Changes in non-cash operating working capital", as shown on the
Consolidated Statements of Cash Flows. The Company believes the exclusion of changes in non-cash operating
working capital better reflects the cash from operating activities generated in the period. Net cash generated
from operating activities before changes in working capital does not have any standardized meaning prescribed
by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies.
Readers should refer to the "Alternative Performance (non-GAAP) Measures" section following the Consolidated
Statements of Cash Flows included in this news release for a more detailed discussion of these and other non-GAAP
measures and their calculation.
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, other than the Joaquin property, please refer to the Company's Annual Information Form
dated March 22, 2018, filed at www.sedar.com. Mineral resources that are not mineral reserves have no demonstrated
economic viability.
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 2019, our estimated Cash Costs and AISCSOS in 2019, and our expectations with respect to future
metal prices and exchange rates; 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; our growth profile and opportunities as results of the
Arrangement; the increase of our credit facility and the timing thereof; the anticipated completion date of the
Arrangement; and any update of our guidance subsequent to completion of the Arrangement, and the disclosure and
timing of any such update.
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: the completion date of the Arrangement; the ability of the Company to realize the anticipated
benefits and opportunities as a result of the Arrangement; access to capital and other financing, if required; 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 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; 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