Pan American Silver Corp Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ovais Habib - Scotiabank - Analyst : Congrats to a strong start to the year, especially on cost. Michael, a couple of questions from me. Just starting off with -- just remaining on the cost side. So costs, both at the Silver and the Gold segments, really outperformed the quarterly guidance that was provided. Now with Q1 trending ahead of guidance, should we expect subsequent quarters to adjust for this cost improvement? How should we be looking at costs kind of going into Q2 and kind of beyond?

Question: Ovais Habib - Scotiabank - Analyst : So essentially, I would get a little bit of an uptick in Q2, but as kind of production increases going into the second half, your per ounce cost essentially should come down in the second half? Is that how we should look at it?

Question: Ovais Habib - Scotiabank - Analyst : Perfect. And Scott, just then -- just moving on to -- in terms of gold and silver sold, that seemed to be high this quarter as compared to previous quarters. Are you able to give any sort of information on what the drivers were on that?

Question: Ovais Habib - Scotiabank - Analyst : That's great. And just 1 more question. At Minera Florida, you were talking about costs that were high and you noted that absenteeism as one of the causes. Are you able to kind of shed some more light on what's happening there? And how should we kind of position ourselves going into Q2?

Question: Ovais Habib - Scotiabank - Analyst : And maybe that's it for me, guys. Again, congrats on the great quarter.

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Michael and team, congrats on, I agree, very strong start, very strong Q1. Maybe if I can ask about Bell Creek. I read that there were some technical challenges at Bell Creek in the quarter. And then I actually went back to the commentary in Q1 2024, and there were some challenging ground conditions at that time as well. So is this a continuing kind of issue? Could you maybe give us a bit more color in terms of what's happening? I know it's not your largest asset, but I'm just wondering if you can give us a bit more color?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Maybe switching gears to Escobal. Michael, as you mentioned, there were four working meetings with the Guatemalan government in the quarter. Is that what you had expected? Are you happy with that progress? I know you can't give us any kind of timing at this point in time. But I'm just wondering, were you're happy with what happened in Q1?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Great. And then on (technical difficulty) side, some questions here. Number one, I know that when you talk about all-in sustaining costs, you still talk about the NRV adjustment. But just to confirm, that should be -- that is going to become less and less important as Dolores comes off. And at some point in time, will you stop talking about the NRV adjustment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 08, 2025 / 3:00PM, PAAS.TO - Q1 2025 Pan American Silver Corp Earnings Call

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Great. And then maybe one last question following up on my buddy Ovais' question here. Asked a different way in terms of guidance, I know you've maintained full year guidance. But my question is, previously, you had guided in Q2 to $19.50 to $21.25 an ounce. In Q3, you've guided to $14.25 to $16.25 an ounce all-in sustaining cost. At this point in time, are those still good goalposts to use in terms of us modelling Q2 and Q3?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Yeah. And maybe if I can just --?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Of course. We'll definitely adjust for those different input factors here. And then, Michael, since I have you here, maybe if I can slip in one more question. In the MD&A, you don't talk much about Navidad. I know there's still a lot of questions about the province of Chubut, but from our industry sources, it does seem like Argentina is becoming a better place to do business. And so any comments that you can make on Navidad?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Congrats once again on a strong Q1, and we look forward to that continuing for the rest of 2025.

Question: Don DeMarco - National Bank of Canada - Analyst : Great quarter, certainly on costs. On costs, and I'll start off with that. In response to a previous question, you mentioned a few drivers, commitment to cost control, favorable FX rates, strong byproduct credits. Do you have a sense of the approximate benefit of each of these categories on the aggregate outperformance in Q1?

Question: Don DeMarco - National Bank of Canada - Analyst : Okay. Okay. Well, that's helpful nonetheless. But then maybe shifting to my next question on capital allocation. So your balance sheet is continuing to improve. You got cash over $900 million. You mentioned $1.7 billion in liquidity. So what are your priorities on capital allocation? Like, considering the different range of options, you got debt repayment, do you see opportunity to increase the NCIB or dividends or maybe see a better ROI by deploying cash into the pending Skarn development that's pending?

Question: Don DeMarco - National Bank of Canada - Analyst : Certainly. Okay. And then you mentioned the Skarn and with that, the negotiations, you're looking to maintain maximum silver. Are you happy with the level of silver in your portfolio right now relative to gold? And can you share your thoughts on the different levers that you have to increase silver, Skarn being one, Escobal, with Cosmos' question, you touched on Navidad, maybe there's potential M&A. So how do you feel about that level right now where it is?