Unaudited tabular amounts are in thousands of U.S. dollars except number of shares, options, warrants, and per share amounts
Q4 2019 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 Record Quarterly Cash Flow from Operations of $129.5 Million in Q4 2019
Quarterly Dividend Increased by 43%
All financial figures are in U.S. dollars unless otherwise indicated.
Vancouver, B.C. - February 19, 2020 - 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, or 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.
Q4 2019 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
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.
Q4 2019 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,
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 ($/tonne)(3) 5,840 6,098 5,973 6,519
(1) Per share amounts are based on basic weighted average common shares.
(2) Non- GAAP measures: Cash Costs, All-in Sustaining Costs (AISC), adjusted earnings, basic adjusted earnings per share, and net cash generated from
operating activities before changes in working capital are non-GAAP financial measures. Please refer to the "Alternative Performance (non-GAAP)
Measures" section of this news release for further information on these measures.
(3) Metal prices stated are inclusive of final settlement adjustments on concentrate sales.
Q4 2019 NEWS RELEASE
All amounts expressed in U.S. dollars unless otherwise indicated
Unaudited tabular amounts are in thousands of U.S. dollars except number of shares,
options, warrants, and per share amounts, unless otherwise noted
PAN AMERICAN SILVER CORP. 4
2019 Annual Results Compared to 2019 Forecast
The Company's 2019 annual production, Cash Costs, AISC and capital expenditures compared to Management's
most recent annual forecast amounts are as follows:
2019 Actual Forecast Range (1)
Production
Silver (million ounces) 25.9 25.3 - 26.3
Gold (thousand ounces) 559.2 550.0 - 600.0
Zinc (thousand tonnes) 67.6 65.0 - 67.0
Lead (thousand tonnes) 27.3 24.0 - 25.0
Copper (thousand tonnes) 8.7 9.8 - 10.3
Cash Costs(2) ($/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.
Q4 2019 NEWS RELEASE
Consolidated Statements of Financial Position
(Unaudited in thousands of U.S. dollars)
PAN AMERICAN SILVER CORP. 5
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
Q4 2019 NEWS RELEASE
Consolidated Income Statements
(Unaudited in thousands of U.S. dollars except per share amounts)
PAN AMERICAN SILVER CORP. 6
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.
Q4 2019 NEWS RELEASE
Consolidated Statements of Comprehensive Income
(Unaudited in thousands of U.S. dollars)
PAN AMERICAN SILVER CORP. 7
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
Q4 2019 NEWS RELEASE
Consolidated Statements of Cash Flows
(Unaudited in thousands of U.S. dollars)
PAN AMERICAN SILVER CORP. 8
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.