The Company declares the first dividend of
2015 in the amount of $0.125
(All amounts in US$ unless otherwise stated.
Approximate production figures.)
VANCOUVER, Feb. 19, 2015 /CNW/ - Pan American Silver
Corp. (NASDAQ: PAAS; TSX: PAA) (the "Company", or "Pan
American"), today reported unaudited financial results for the
quarter and year ended December 31,
2014 to accompany production figures already reported for
the same period on January 19, 2015.
The Company also announced today that its Board of Directors has
approved its first quarterly cash dividend of 2015 in the amount of
$0.125 per common share. Should the
Company's Board of Directors continue to approve future quarterly
dividends in the same amount, the annual cash dividend paid by Pan
American would be $0.50 per common
share, which represents a yield of approximately 4.4% based on the
Company's closing share price on NASDAQ on February 18, 2015. The cash dividend will be
payable on or about Friday, March 13,
2015 to holders of record of common shares as of the close
of Monday, March 2, 2015. Specific
distribution dates and amounts of future dividends will be
determined by the Board of Director on an ongoing basis. Pan
American's dividends are designated as eligible dividends for the
purposes of the Income Tax Act (Canada).
Fourth Quarter 2014
Highlights (unaudited)(1)
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- Silver production of 6.75 million
ounces
- Gold production of 43,900
ounces
- Consolidated cash costs(2)
of $11.92 per silver ounce, net of by-product credits
- All-in sustaining costs per silver
ounce sold ("AISCSOS")(3) of $18.62, net of by-product
credits
- Revenue of $163.1 million
- Mine operating loss(4) of
$21.4 million
- Net loss of $525.7 million, or
$(3.48) per share, including non-cash, after-tax impairment charges
of $498.7 million
- Adjusted loss of $21.2 million, or
$(0.14) per share
- Paid a total of $18.9 million in cash
dividends to shareholders, or $0.125 per share
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Full-year 2014
Highlights (unaudited)(1)
|
- Record silver production of 26.11
million ounces
- Record gold production of 161,500
ounces
- Consolidated cash costs(2)
of $11.46(5) per silver ounce, net of by-product credits
– better than guidance of $11.70 to $12.70 per ounce
- AISCSOS(3) of $17.88, net
of by-product credits – in line with guidance of $17.00 to $18.00
per ounce
- Revenue of $751.9 million
- Mine operating earnings(4)
of $8.1 million
- Net loss(5) of $544.8
million, or $(3.60) per share, including non-cash, after-tax
impairment charges of $498.7 million
- Adjusted loss of $20.8 million or
$(0.14) per share
- Net cash generated from operating
activities of $124.2 million or $0.82 per common share
- Total dividends paid to common
shareholders of $75.8 million, representing $0.50 per common
share
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Financial Position
at December 31, 2014
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- Cash and short term investments of
$330.4 million
- Working capital of $522.7
million
- Total debt of $60.4 million
(including capital leases of $8.0 million)
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(1)
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Financial information
in this news release is based on International Financial Reporting
Standards ("IFRS"); results are unaudited;
percentages compare period-on-period.
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(2)
|
Cash costs per
payable ounce of silver, net of by-product credits, is a non-GAAP
measure. Cash costs does not have a standardized
meaning prescribed by IFRS as an indicator of performance.
Investors are cautioned that cash costs per ounce 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.
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. See "Financial and Operating Highlights" in the attached
table for a
more detailed discussion of this measure and a reconciliation of
this measure to the Company's production costs, depreciation and
amortization,
and royalties.
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(3)
|
All-in sustaining
costs per payable silver ounce sold ("AISCSOS") is a non-GAAP
measure. The Company has adopted the reporting of
AISCSOS as a measure of a silver mining company's consolidated
operating performance and the ability to generate cash flow from
all
operations collectively. We believe it is a more comprehensive
measure of the cost of operating our consolidated business than
traditional
cash and total costs per 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. This measure including its subcomponent Sustaining Capital
are non – GAAP measures and readers should refer to the attached
table
in the section under "Sustaining Capital" for a detailed discussion
of this measure.
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(4)
|
Mine operating
earnings is a non-GAAP measure used by the Company to assess the
performance of its silver mining operations. Mine
operating earnings is calculated as revenue less production costs,
depreciation and amortization and royalties. The Company and
certain
investors use this information to evaluate the Company's
performance.
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(5)
|
Previously reported
cash costs for the Company's Peruvian operations overstated copper
by-product credits. Both consolidated and
Peruvian annual cash costs for 2014 and 2013 have been adjusted to
correct for this overstatement. The effect of these corrections
on
2014's annual consolidated cash costs was an increase of $0.50 per
ounce.
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Commenting on the Company's fourth quarter and full-year 2014
results, Geoff Burns, President
& CEO said, "The price of silver on December 31st, 2014 was $15.97 per ounce and in concert with a
strengthening US Dollar required us to record significant asset
impairment charges, negative net realizable value adjustments,
negative concentrate pricing adjustments and a significant foreign
exchange loss on our Canadian Dollar and Mexican Pesos holdings.
Together, these items have overshadowed what was a very respectable
fourth quarter operating performance from both a production and
cost perspective." Burns continued, "In 2014 we achieved annual
records for silver and gold production and we did this below our
guidance for cash costs. Our AISCSOS were as forecasted and we
generated net cash from operating activities of $124.2 million or $0.82 per common share, while returning an
industry-leading dividend to our shareholders. We have maintained
the strength of our balance sheet and I look forward to 2015 where
we expect similar silver production, higher gold production and a
marked reduction in our AISCOS."
Financial Results
During the fourth quarter of 2014, Pan American
generated $163.1 million in revenue,
15% less than in the same period of 2013, driven by lower volumes
of metal sold and reduced metal prices. At the end of the current
quarter the Company decided to defer the sale of approximately
7,000 ounces of gold and 150,000 ounces of silver produced at
Manantial Espejo mine until the first quarter of 2015. While
this negatively impacted fourth quarter revenues and operating cash
flows, the Company did receive approximately $0.8 million of additional revenue when this
production was sold. The Company's revenue for the full year 2014
was $751.9 million, 9% lower than in
2013. Lower revenues for the year ended December 31, 2014 were mainly due to
significantly lower realized precious metal prices, partly offset
by greater quantities of gold and base metals sold. In 2014, silver
sales volumes remained consistent with the prior year and gold
sales volumes increased significantly; however, the average
realized price of silver declined 20% to $18.53 per ounce and the average realized price
of gold declined 9% to $1,268 per
ounce. During the same period, the average realized price of copper
declined 6% to $6,825 per tonne and
the average price of lead declined 3% to $2,085 per tonne. Zinc was the only exception to
the downward trend as the metal's average price appreciated during
the year to $2,160 per tonne.
Pan American incurred a net loss of $525.7 million during the fourth quarter of 2014,
or a loss per share of $(3.48),
compared to a net loss of $293.1
million during the fourth quarter of 2013 (loss per share of
$1.94). The loss was primarily due to
impairment charges that totaled $498.7
million after-tax.
The decrease in metal prices that occurred in the
second half of 2014, led the Company to lower the silver and gold
prices used to estimate reserves, as well as the prices used in the
discounted life of mine cash flow models, which were utilized to
test for asset impairment. The Company assumed long term silver and
gold prices of $18.50 and
$1,250 per ounce, respectively,
substantially lower than the prices used at the end of 2013.
As a consequence, the Company recognized
impairments on several of its assets. The largest impairment was on
the Navidad property, where lower prices and a relatively high
discount rate combined to significantly reduce the Company's
carrying value of this asset.
The total impairment charges incurred at
December 31, 2014 were as
follows:
|
|
Property
|
($
Millions)
|
Dolores
mine
|
$ 110.8
|
Manantial Espejo
mine
|
55.9
|
Alamo Dorado
mine
|
17.7
|
Mine
impairments
|
$ 184.4
|
Navidad
property
|
286.1
|
La Virginia
property
|
17.0
|
La Bolsa
property
|
6.4
|
Pico Machay
property
|
4.8
|
Development
property impairments
|
$ 314.3
|
Total
|
$ 498.7
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The financial results for the fourth quarter of
2014 were also impacted by negative sales adjustments to previously
reported provisional sales of $4.4
million, by foreign exchange losses of $4.5 million on holding Canadian Dollars and
Mexican Pesos and by net realizable value adjustments of
$2.2 million.
For the full year 2014, Pan American generated a
net loss of $544.8 million, compared
to a net loss of $445.8 million
generated in 2013. The 2014 loss was directly attributable to the
previously described impairment charges, in addition to
$30.0 million of negative net
realizable value adjustments and foreign exchange losses of
$13.3 million.
Adjusting for the impairments and other non-cash,
unrealized items, Pan American generated an adjusted loss of
$21.2 million, or $(0.14) per share in the fourth quarter and an
adjusted loss of $20.8 million or
$(0.14) per share for the full-year
of 2014.
Pan American posted $0.8
million in net cash generated from operating activities
during the last quarter of 2014, compared to net cash of
$46.2 million generated during the
final quarter of 2013. However, net cash generated from operating
activities for the full year 2014 rose slightly to $124.2 million, compared to $119.6 million generated in 2013, as lower cash
operating margins were more than offset by lower income taxes paid
and working capital movements.
At December 31,
2014, Pan American had $330.4
million in cash and short term investments and working
capital of $522.7 million, with total
debt of $60.4 million, including
capital leases of $8.0 million.
Production and Operations
During the fourth quarter of 2014, Pan American's mines
performed within management's expectations and produced 6.75
million ounces of silver and 43,900 ounces of gold.
The Company also produced 10,200 tonnes of zinc, 3,900 tonnes of
lead and a record 3,000 tonnes of copper on account of quarterly
record zinc and lead production at La
Colorada and quarterly record copper production at both
Huaron and Morococha.
Consolidated silver production for the full year 2014 was a
record 26.11 million ounces, slightly higher than 2013 silver
production and well within management's expectations. The new
record was achieved due to production gains at La Colorada, Manantial Espejo, Dolores and Huaron and despite the expected
decline of silver production at Alamo Dorado.
As anticipated, Pan American also achieved record consolidated
gold production of 161,500 ounces in 2014, 8% greater than 2013
gold production, as a result of more ounces produced at
Dolores and Manantial Espejo.
In addition, Pan American's 2014 full year base metals
production rose significantly. Consolidated zinc production rose 3%
from 2013 to 43,500 tonnes, primarily on account of higher
production at La Colorada.
Consolidated lead production increased 11% compared to 2013 to
15,000 tonnes, with higher production achieved at La Colorada and Morococha, partially offset by
lower production at San Vicente.
Consolidated copper production rose to a record 9,000 tonnes, 62%
greater than in 2013, due to significant production increases at
Huaron and Morococha.
Mexico
During the quarter ended December 31,
2014, silver production at La
Colorada was a record 1.29 million ounces, slightly more
than silver produced in the fourth quarter of 2013, mainly due to
record throughput and higher grades. La
Colorada also produced a record 2,200 tonnes of zinc and
1,000 tonnes of lead during the quarter, 18% and 17% greater than
during the fourth quarter of 2013, respectively. The production
gains were achieved due to record zinc grades and zinc and lead
recoveries, further enhanced by higher quantities of sulfide ore
mined.
At Dolores, higher throughput
pushed silver production to 0.95 million ounces, 3% more than in
the last quarter of 2013, while gold production rose 15% to 18,000
ounces due to higher throughput and higher grades, which were
partially offset by lower recoveries.
As anticipated, Alamo Dorado's silver production declined 31%
from the fourth quarter of 2013 to 0.87 million ounces as a result
of treating greater amounts of low-grade stockpiled ore as the open
pit mine reaches its final stages.
For the full year 2014, the Company produced 12.43 million
silver ounces in Mexico. With its
new annual production record, La
Colorada has become the Company's largest silver producer at
4.98 million ounces, followed by Dolores with 3.98 million ounces of silver
produced. Increased silver production at La Colorada was due to higher throughput of
higher-grade sulfide ores mined using the additional equipment that
has been acquired as part of the mine's expansion project.
Increased sulfide ore throughput also had a positive effect on base
metal grades and recoveries, yielding records in annual zinc
production of 7,700 tonnes and lead production of 3,700 tonnes, 14%
and 12% greater than 2013 production, respectively.
Dolores' 2014 production of
3.98 million ounces of silver and 66,800 ounces of gold benefited
from the commissioning in late 2013 of the new leach pad 3. This
provided unconstrained crushing output and increased leaching
surface during 2014 and resulted in higher silver
recoveries.
As expected, Alamo Dorado's annual silver production declined
32% from 2013 to 3.47 million ounces, primarily due to the expected
processing of lower grade ores and lower metal recoveries.
Peru
During the fourth quarter of 2014, the Company's Peruvian mines
produced a total of 1.55 million ounces of silver, practically flat
year-on-year. At Huaron, silver production increased 8% from the
fourth quarter of 2013 to 0.95 million ounces primarily due to
increased throughputs.
In 2014, Huaron's silver production rose 10% from the previous
year to a record 3.63 million ounces due to increased throughput as
a result of a multi-year mine mechanization effort. The
mechanization efforts at the mine focused largely on high-grade
copper ore zones that lead to a 73% increase in copper production
to a record 5,900 tonnes, along with a 3% increase in lead
production to a record 6,000 tonnes, and zinc production of 14,200
tonnes, similar to 2013 production.
Morococha's silver production during the fourth quarter of 2014
fell 6% from the last quarter of 2013, as a result of lower grades
and recoveries, partially offset by increased throughput rates.
Morococha produced 2.37 million ounces of silver in 2014,
slightly less than in 2013, largely due to mine sequencing into
higher-grade lead and copper ores. This resulted in a 26% increase
in lead production to 4,700 tonnes, a 52% increase in copper
production to a record 3,100 tonnes and a 4% increase in zinc
production to 15,800 tonnes in comparison to 2013 production.
Bolivia
During the quarter ended December 31,
2014, San Vicente's silver
production rose 18% from the same quarter of 2013 to a record 1.17
million ounces, as a result of increased throughputs, higher grades
and increased recoveries. In contrast, zinc and lead production
fell 13% and 5%, respectively, primarily due to lower grades driven
by mine sequencing.
For the full year 2014, San
Vicente produced 3.95 million ounces of silver, similar to
2013's production, along with a 6% reduction in zinc production to
5,800 tonnes and an 11% reduction in lead production to 500 tonnes
due to mine sequencing.
Argentina
Silver production at Manantial Espejo rose 5% during the fourth
quarter of 2014, to 0.91 million ounces. The production increase
was achieved due to higher throughput as a result of successful
debottlenecking, partially offset by lower grades. Quarterly gold
production fell 20% from the fourth quarter of 2013 due to lower
grades, partially offset by higher throughput.
For the full year 2014, Manantial Espejo's silver production
rose 19% from 2013 to 3.72 million ounces and gold production rose
16% to 70,500 ounces due to record mill throughput.
Cash Costs and All-in Sustaining Costs Per Silver Ounce
Sold
Pan American's consolidated cash costs for the
fourth quarter of 2014 were $11.92
per silver ounce, net of by-product credits and consolidated cash
costs for the full year 2014 were $11.46 per silver ounce, net of by-product
credits. This compares to adjusted cash costs of $9.85 per ounce of silver during the fourth
quarter of 2013 and $10.96 per ounce
of silver, net of by-product credits for the full year 2013.
Previously reported cash costs for the Company's Peruvian
operations overstated copper by-product credits and both
consolidated annual cash costs for 2014 and 2013, and fourth
quarter 2013 cash costs have been adjusted to correct for this
overstatement. Please refer to Note 6 under the table "Financial
and Operating Highlights" attached to this news release for further
details.
As expected, cash costs during the fourth quarter
of 2014 rose primarily on reduced grades at Alamo Dorado, lower
gold production at Manantial Espejo and lower by-product credits
due to lower by-product prices except for zinc. Consolidated cash
costs for the full year 2014 of $11.46 per silver ounce, were well below
management's full year 2014 guidance of $11.80 to $12.80 per ounce, net of by-product
credits, on account of better than expected performances at
La Colorada, Huaron and Morococha,
partly offset by slightly higher than expected cash costs at
San Vicente and Manantial
Espejo.
AISCSOS for the quarter and year-ended
December 31, 2014 were $18.62 and $17.88,
respectively, compared to $16.72 and
$17.91 per ounce in the respective
periods of 2013. AISCSOS for 2014 remained similar to 2013 as lower
sustaining capital and exploration expense were offset by higher
cash cost of sales, net of by-product credits.
AISCSOS and cash costs are non-GAAP measures. Please refer to
Notes 4 and 5 under the table "Financial and Operating Highlights"
attached to this news release for further discussion of these
measures.
Sustaining and Project Capital
In 2014, Pan American spent $99.1
million in sustaining capital at its seven mining
operations. At La Colorada, the
Company spent $13.5 million,
primarily on a tailings dam raise, mine ventilation and
infrastructure, and mine site exploration.
At Dolores, the Company spent
$27.6 million, mainly on open pit
pre-stripping, mine site exploration, access roads and camp
upgrades, and on mining equipment replacements.
At Huaron, Pan American spent $17.3
million to upgrade the underground 250-level primary
drainage and haulage level, to upgrade the shaft loading pockets,
mine site exploration and on a tailings dam raise.
At Morococha, the Company spent $10.2
million mainly on mine development and infrastructure, mine
site exploration, plant upgrades and equipment overhauls.
At San Vicente, the Company
spent $3.4 million primarily on mine
infrastructure, equipment overhauls and mine site exploration.
Finally, at Manantial Espejo, Pan American spent
$26.7 million primarily for open pit
pre-stripping as well as a tailings dam expansion and mine site
exploration.
In terms of project capital, Pan American
invested $17.3 million on the
La Colorada expansion of which
$5.6 million were used to purchase
new underground mobile mining equipment and to advance
project-related underground mine lateral development. $5.1 million were spent on engineering work and
equipment purchases for the plant expansion, $3.4 million were spent on new community
infrastructure, $1.5 million were
spent on procurement of the new production hoist, $0.9 million were used in camp expansions and
expanded site infrastructure, and the remainder was required to
fund indirect costs.
The Company also invested $17.3
million on completing the second phase of Dolores' pad 3 expansion. Approximately
$2.0 million remain for the
installation of a lime silo and conveyor belt, which has been
carried over into 2015. In addition, $1.4
million were spent on advancing the new power line design
and right-of-way acquisitions, and another $1.0 million were spent on advancing engineering
on the pulp agglomeration and underground Preliminary Economic
Assessment that was disclosed in August
2014.
2015 Outlook
As announced on January
19, 2015, Pan American expects to maintain current
production levels of between 25.50 and 26.50 million ounces of
silver at cash costs of between $10.80 and
$11.80 per ounce of silver, net of by-product credits. In
addition, higher gold grades at Dolores are expected to contribute to an
increase in consolidated gold production to between 165,000 and
175,000 ounces, (between 2% and 8% higher than in 2014).
The Company's consolidated 2015 base metals
production is expected to total 41,000 to 43,000 tonnes of zinc,
14,500 to 15,000 tonnes of lead and 8,000 to 8,500 tonnes of
copper.
Pan American also expects to spend between
$71 to $84 million on sustaining
capital in 2015, while investing $98 to $109
million in long term projects, primarily for the expansion
project at La Colorada.
Perhaps most importantly, consolidated AISCSOS are expected to
decline from $17.88 in 2014 to
between $15.50 and $16.50, net of
by-product credits in 2015, mainly on lower sustaining capital
expenditures and due to the above-mentioned decline in silver cash
costs. The Company's AISCSOS guidance for 2015 is based on
assumptions of exploration expenses increasing to $16.50 million, while G&A costs and
reclamation cost accretion are expected to remain steady at
$17.50 million and $3.00 million, respectively. For the purposes of
providing AISCSOS guidance for 2015, we have assumed that payable
silver sold in 2015 will be between 24.10 million and 25.10 million
ounces.
About Pan American
Pan American Silver's 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
has seven operating mines in Mexico, Peru,
Argentina and Bolivia. Pan American also owns several
development projects in the USA,
Mexico, Peru and Argentina.
Technical information contained in this news release with
respect to Pan American has been reviewed by Michael Steinmann, P.Geo., Executive VP
Corporate Development & Geology, and Martin Wafforn, P.Eng., VP
Technical Services, who are the Company's Qualified Persons for the
purposes of NI 43-101.
Pan American will host a conference call to discuss these
results on Thursday, February 19,
2015 at 1:00 pm EST
(10:00 am PST). To participate in the
conference, please dial toll number 1-604-638-5340.
A live audio webcast
and Power Point presentation will be available at
http://services.choruscall.ca/links/pan150219.html. The call
and webcast will also be available for replay for one week after
the call by dialing 1-604-638-9010 and entering code # 6218
followed by the # sign.
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NON-GAAP MEASURE – CASH COSTS PER PAYABLE OUNCE, NET OF
BY-PRODUCT CREDITS
THIS NEWS RELEASE PRESENTS INFORMATION ABOUT OUR CASH COSTS
OF A PAYABLE OUNCE OF SILVER FOR OUR OPERATING MINES. CASH
COSTS PER PAYABLE OUNCE PRODUCED, NET OF BY-PRODUCT CREDITS IS
CALCULATED AS FOLLOWS:
- EXCEPT AS OTHERWISE NOTED, CASH COSTS PER PAYABLE OUNCE
PRODUCED IS CALCULATED BY DIVIDING TOTAL CASH COSTS, NET OF
BY-PRODUCT CREDITS BY TOTAL PAYABLE SILVER OUNCES PRODUCED AT THE
RELEVANT MINE OR MINES.
- TOTAL CASH COSTS INCLUDE MINE OPERATING COSTS SUCH AS
MINING, PROCESSING, ADMINISTRATION, ROYALTIES AND OPERATING TAXES,
BUT EXCLUDE AMORTIZATION, RECLAMATION COSTS, FINANCING COSTS AND
CAPITAL DEVELOPMENT AND EXPLORATION. CERTAIN AMOUNTS OF
STOCK-BASED COMPENSATION ARE EXCLUDED AS WELL.
CASH COST PER PAYABLE OUNCE OF SILVER PRODUCED, NET OF
BY-PRODUCT CREDITS IS INCLUDED IN THIS NEWS RELEASE BECAUSE CERTAIN
INVESTORS USE THIS INFORMATION TO ASSESS OUR PERFORMANCE AND ALSO
TO DETERMINE OUR ABILITY TO GENERATE CASH FLOW FOR USE IN INVESTING
AND OTHER ACTIVITIES. THE INCLUSION OF CASH COSTS PER PAYABLE OUNCE
PRODUCED MAY ENABLE INVESTORS TO BETTER UNDERSTAND YEAR-OVER-YEAR
CHANGES IN OUR PRODUCTION COSTS, WHICH IN TURN AFFECT PROFITABILITY
AND CASH FLOW. CASH COSTS PER PAYABLE OUNCE, NET OF BY-PRODUCT
CREDITS DOES NOT HAVE A STANDARDIZED MEANING OR A CONSISTENT BASIS
OF CALCULATION PRESCRIBED BY CANADIAN ACCOUNTING STANDARDS.
INVESTORS ARE CAUTIONED THAT CASH COSTS PER PAYABLE OUNCE PRODUCED,
NET OF BY-PRODUCT CREDITS SHOULD NOT BE
CONSIDERED IN ISOLATION OR CONSTRUED AS A SUBSTITUTE TO COSTS
DETERMINED IN ACCORDANCE WITH CANADIAN ACCOUNTING STANDARDS AS
PRESCRIBED UNDER IFRS AS AN INDICATOR OF PERFORMANCE. OUR METHOD OF
CALCULATING CASH COSTS PER PAYABLE OUNCE PRODUCED, NET OF
BY-PRODUCT CREDITS MAY DIFFER FROM THE METHODS USED BY OTHER
ENTITIES AND, ACCORDINGLY, OUR CASH COSTS PER PAYABLE OUNCE
PRODUCED MAY NOT BE COMPARABLE TO SIMILARLY TITLED MEASURED USED BY
OTHER ENTITIES.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
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: OUR FORECAST
PRODUCTION OF SILVER, GOLD AND OTHER METALS IN 2015; OUR ESTIMATED
CASH COSTS PER OUNCE OF SILVER IN 2014 AND FORECAST CASH COSTS PER
OUNCE OF SILVER IN 2015; OUR ESTIMATED AISCSOS FOR 2015; OUR
ANTICIPATED CAPITAL INVESTMENTS FOR 2015; 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; AND ANY ANTICIPATED LEVEL OF FINANCIAL AND
OPERATIONAL SUCCESS IN 2015.
THESE STATEMENTS 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;
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 IN OR
INTERRUPTIONS IN SCHEDULED PRODUCTION; ALL NECESSARY PERMITS,
LICENCES 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
METALS 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 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; 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. 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 AND 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 AND INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION,
CHANGES IN ASSUMPTIONS, FUTURE EVENTS OR OTHERWISE, EXCEPT TO THE
EXTENT REQUIRED BY APPLICABLE LAW.
Pan American
Silver Corp.
|
|
|
|
|
|
|
|
|
Financial &
Operating Highlights
|
|
|
|
|
|
|
|
|
|
Three months
ended
December
31,
|
Twelve months
ended December
31,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Consolidated
Financial Highlights
|
|
|
|
|
|
|
|
|
(Unaudited in
thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the
period
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
Loss per share
attributable to common shareholders (basic)
|
$
|
(3.48)
|
$
|
(1.94)
|
$
|
(3.60)
|
$
|
(2.94)
|
Adjusted loss
for the period (1)
|
$
|
(21,207)
|
$
|
(77,649)
|
$
|
(20,825)
|
$
|
(42,845)
|
Adjusted loss per
share attributable to common shareholders (basic)
(1)
|
$
|
(0.14)
|
$
|
(0.51)
|
$
|
(0.14)
|
$
|
(0.28)
|
Mine operating (loss)
earnings
|
$
|
(21,369)
|
$
|
18,955
|
$
|
8,073
|
$
|
131,519
|
Mine operating (loss)
earnings (Excludes NRV Adj.) (2)
|
$
|
(19,586)
|
$
|
27,365
|
$
|
37,598
|
$
|
144,486
|
Net cash generated
from operating activities
|
$
|
823
|
$
|
46,156
|
$
|
124,188
|
$
|
119,606
|
Net cash generated
from operating activities per share
|
$
|
0.01
|
$
|
0.30
|
$
|
0.82
|
$
|
0.79
|
Capital
spending
|
$
|
30,131
|
$
|
33,669
|
$
|
131,761
|
$
|
159,401
|
Dividends
paid
|
$
|
18,933
|
$
|
18,881
|
$
|
75,751
|
$
|
75,755
|
Shares
repurchased
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
6,740
|
Cash and short-term
investments
|
$
|
330,413
|
$
|
422,722
|
$
|
330,413
|
$
|
422,722
|
Working
capital(3)
|
$
|
522,655
|
$
|
689,032
|
$
|
522,655
|
$
|
689,032
|
|
|
|
|
|
|
|
|
|
Consolidated
Metals Recovered
|
|
|
|
|
|
|
|
|
Silver metal -
million ounces
|
|
6.75
|
|
6.80
|
|
26.11
|
|
25.96
|
Gold metal - thousand
ounces
|
|
43.9
|
|
46.2
|
|
161.5
|
|
149.8
|
Zinc metal - thousand
tonnes
|
|
10.2
|
|
11.3
|
|
43.5
|
|
42.1
|
Lead metal - thousand
tonnes
|
|
3.9
|
|
3.5
|
|
15.0
|
|
13.5
|
Copper metal -
thousand tonnes
|
|
3.0
|
|
1.7
|
|
9.0
|
|
5.5
|
|
|
|
|
|
|
|
|
|
Average
Price
|
|
|
|
|
|
|
|
|
Silver metal
($/oz)
|
$
|
16.50
|
$
|
20.82
|
$
|
19.08
|
$
|
23.79
|
Gold metal
($/oz)
|
$
|
1,201
|
$
|
1,276
|
$
|
1,266
|
$
|
1,411
|
|
|
|
|
|
|
|
|
|
Consolidated Costs
per Ounce of Silver (net of by-product credits)
(4)
|
|
|
|
|
|
|
Cash cost per payable
ounce produced
|
$
|
11.92
|
$
|
9.85(6)
|
$
|
11.46(6)
|
$
|
10.96(6)
|
Total production cost
per payable ounce produced
|
$
|
18.62
|
$
|
14.86
|
$
|
17.80
|
$
|
16.71
|
Payable ounces of
silver produced – million ounces
|
|
6.34
|
|
6.42
|
|
24.66
|
|
24.58
|
|
|
|
|
|
|
|
|
|
All-in Sustaining
Cost per Silver Ounce Sold (5)
|
$
|
18.62
|
$
|
16.72
|
$
|
17.88
|
$
|
17.91
|
All-in Sustaining
Cost per Silver Ounce Sold (Excludes NRV Adjustment)
|
$
|
18.27
|
$
|
15.41
|
$
|
16.71
|
$
|
17.40
|
Payable ounces of
silver sold – million ounces
|
|
6.35
|
|
6.44
|
|
25.43
|
|
25.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted loss and
adjusted loss per share attributable to common shareholders are
Non-GAAP measures. Adjusted (loss)
earnings is calculated as net (loss) earnings for the period
adjusting for the gains or losses recorded on fair market value
adjustments on the
Company's outstanding derivative instruments, impairment of mineral
property, unrealized foreign exchange gains or losses, unrealized
gain or loss
on commodity contracts, net realizable value adjustment to long
term heap inventory, gain or loss on sale of assets and the effect
for taxes on the
above items. The Company considers this measure to better reflect
normalized earnings as it does not include items which may be
volatile from period
to period.
|
|
|
|
|
Three months ended
December 31,
|
Twelve months
ended December 31,
|
Adjusted Loss
Reconciliation
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Net (loss) earnings
for the period
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
Adjust derivative
losses (gains)
|
|
252
|
|
(1,249)
|
|
(1,348)
|
|
(16,715)
|
|
Adjust gain on sale
of mineral properties
|
|
(945)
|
|
(5,969)
|
|
(1,145)
|
|
(14,068)
|
|
Adjust unrealized
foreign exchange (gains) losses
|
|
(618)
|
|
(656)
|
|
4,034
|
|
(922)
|
|
Adjust net realizable
value of inventory
|
|
10,982
|
|
10,281
|
|
36,578
|
|
10,281
|
|
Adjust
realized losses (gains) on silver and gold hedge
program
|
|
-
|
|
(1,127)
|
|
-
|
|
5,127
|
|
Adjust realized and
unrealized losses on commodity contracts
|
|
-
|
|
260
|
|
-
|
|
25
|
|
Adjust severance and
acquisition costs
|
|
-
|
|
-
|
|
-
|
|
617
|
|
Adjust write-down of
mining assets
|
|
596,262
|
|
336,785
|
|
596,262
|
|
540,228
|
|
Adjust for effect of
taxes on above items
|
|
(101,413)
|
|
(122,910)
|
|
(110,383)
|
|
(121,572)
|
|
Adjusted loss for
the period
|
$
|
(21,207)
|
$
|
(77,649)
|
$
|
(20,825)
|
$
|
(42,845)
|
|
Weighted average
shares for the period
|
|
151,534
|
|
151,428
|
|
151,511
|
|
151,501
|
|
Adjusted loss per
share for the period
|
$
|
(0.14)
|
$
|
(0.51)
|
$
|
(0.14)
|
$
|
(0.28)
|
|
|
|
|
|
|
|
|
|
(2)
|
Mine operating loss –
excluding NRV Adjustment is a Non-GAAP measure. The Company uses
this measure to reflect the real cost of production
by removing the effects of short term and volatile commodity price
fluctuations.
|
(3)
|
Working capital is a
non-GAAP measure calculated as current assets less current
liabilities. The Company and certain investors use this information
to
evaluate whether the Company is able to meet its current
obligations using its current assets.
|
(4)
|
Consolidated cost per
ounce of silver is a non-GAAP measure. The Company believes that in
addition to production costs, depreciation and amortization,
and
royalties, cash cost per ounce is a useful and complementary
benchmark that investors use to evaluate the Company's performance
and ability to generate
cash flows and is well understood and widely reported in the silver
mining industry. However, cash cost per ounce does not have a
standardized meaning
prescribed by IFRS as an indicator of performance. Investors are
cautioned that cash costs per ounce 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. The Company's
method of calculating
cash costs per ounce may differ from the methods used by other
entities.
|
(5)
|
The Company has
adopted the reporting of All-In Sustaining Costs per Silver Ounce
Sold ("AISCSOS") as a measure of a silver mining company's
consolidated
operating performance and the ability to generate cash flow from
all operations collectively. We believe it is a more comprehensive
measure of the cost of
operating our consolidated business than traditional cash and total
costs per 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.
|
(6)
|
Previously reported
cash costs for the Company's Peruvian operations overstated copper
by-product credits. Both consolidated and Peruvian annual cash
costs
for 2014 and 2013 have been adjusted to correct for this
overstatement. The effect of these corrections on 2014's annual
cash costs was as follows: a $0.50 per
ounce increase to consolidated cash costs (2013 - $0.15); a $2.87
per ounce increase to Huaron cash costs (2013 - $0.85); and a $1.72
per ounce increase to
Morococha cash costs (2013 - $0.58). The fourth quarter 2013 cash
costs have also been adjusted to correct for this overstatement.
The effect of these corrections
on the fourth quarter of 2013's cash costs was as follows: a $0.29
per ounce increase to consolidated cash costs; a $1.74 per ounce
increase to Huaron cash costs
and a $1.02 per ounce increase to Morococha cash
costs.
|
Pan American Silver
Corp.
|
Consolidated
Statements of Financial Position
|
As at December 31, 2014
and 2013
|
(Unaudited in thousands
of U.S. dollars)
|
|
|
December 31,
2014
|
December
31, 2013
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
146,193
|
$
|
249,937
|
Short-term
investments
|
|
|
184,220
|
|
172,785
|
Trade and other
receivables
|
|
|
105,644
|
|
114,782
|
Income taxes
receivable
|
|
|
37,626
|
|
40,685
|
Inventories
|
|
|
252,549
|
|
284,352
|
Prepaids and other
current assets
|
|
|
4,464
|
|
9,123
|
|
|
|
730,696
|
|
871,664
|
Non-current
assets
|
|
|
|
|
|
Mineral property,
plant and equipment,
|
|
|
1,266,391
|
|
1,870,678
|
Long-term refundable
tax
|
|
|
7,698
|
|
9,801
|
Deferred tax
assets
|
|
|
2,584
|
|
165
|
Other
assets
|
|
|
7,447
|
|
8,014
|
Goodwill
|
|
|
3,057
|
|
7,134
|
Total
Assets
|
|
$
|
2,017,873
|
$
|
2,767,456
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
126,209
|
$
|
125,609
|
Loan
payable
|
|
|
17,600
|
|
20,095
|
Current portion long
term debt
|
|
|
34,797
|
|
-
|
Provisions
|
|
|
3,121
|
|
3,172
|
Current portion of
finance lease
|
|
|
3,993
|
|
4,437
|
Current income tax
liabilities
|
|
|
22,321
|
|
29,319
|
|
|
|
208,041
|
|
182,632
|
Non-current
liabilities
|
|
|
|
|
|
Provisions
|
|
|
45,063
|
|
43,817
|
Deferred tax
liabilities
|
|
|
160,072
|
|
285,947
|
Share purchase
warrants
|
|
|
-
|
|
207
|
Long-term portion of
finance lease
|
|
|
4,044
|
|
5,717
|
Long-term
debt
|
|
|
-
|
|
34,302
|
Other long-term
liabilities
|
|
|
30,716
|
|
26,045
|
Total
Liabilities
|
|
|
447,936
|
|
578,667
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Capital and
reserves
|
|
|
|
|
|
Issued
capital
|
|
2,296,672
|
|
2,295,208
|
Share option
reserve
|
|
|
22,091
|
|
21,110
|
Investment
revaluation reserve
|
|
|
(485)
|
|
(137)
|
Retained (deficit)
earnings
|
|
|
(755,186)
|
|
(133,847)
|
Total Equity
attributable to equity holders of the Company
|
|
1,563,092
|
|
2,182,334
|
Non-controlling
interests
|
|
6,845
|
|
6,455
|
Total
Equity
|
|
1,569,937
|
|
2,188,789
|
Total Liabilities
and Equity
|
$
|
2,017,873
|
$
|
2,767,456
|
|
|
Pan American
Silver Corp.
Consolidated
Income Statements
|
(Unaudited in
thousands of U.S. dollars, except for share and per share
amounts)
|
|
|
Three months
ended
December 31,
|
Twelve months
ended
December 31,
|
|
2014
|
2013
|
2014
|
2013
|
Revenue
|
$
|
163,096
|
$
|
192,360
|
$
|
751,942
|
$
|
824,504
|
Cost of
sales
|
|
|
|
|
|
|
|
|
|
Production
costs
|
|
(140,695)
|
|
(136,223)
|
|
(568,204)
|
|
(530,613)
|
|
Depreciation and
amortization
|
|
(38,493)
|
|
(31,612)
|
|
(147,710)
|
|
(135,913)
|
|
Royalties
|
|
(5,277)
|
|
(5,570)
|
|
(27,955)
|
|
(26,459)
|
|
|
(184,465)
|
|
(173,405)
|
|
(743,869)
|
|
(692,985)
|
Mine operating
(loss) earnings
|
$
|
(21,369)
|
$
|
18,955
|
$
|
8,073
|
$
|
131,519
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
(3,051)
|
|
(2,602)
|
|
(17,908)
|
|
(17,596)
|
Exploration and
project development
|
|
(4,278)
|
|
(990)
|
|
(13,225)
|
|
(15,475)
|
Impairment
charge
|
|
(596,262)
|
|
(336,785)
|
|
(596,262)
|
|
(540,228)
|
Foreign exchange
losses
|
|
(4,486)
|
|
(5,958)
|
|
(13,275)
|
|
(14,637)
|
Gains (losses) on
commodity and foreign currency contracts
|
|
-
|
|
1,049
|
|
-
|
|
(4,551)
|
Gain on sale of
assets
|
|
945
|
|
5,969
|
|
1,145
|
|
14,068
|
Other income and
expenses
|
|
(1,583)
|
|
10,210
|
|
(1,314)
|
|
8,287
|
Loss from continuing
operations
|
|
(630,084)
|
|
(310,152)
|
|
(632,766)
|
|
(438,613)
|
|
|
|
|
|
|
|
|
|
(Loss) gain on
derivatives
|
|
(252)
|
|
1,249
|
|
1,348
|
|
16,715
|
Investment income
(loss)
|
|
568
|
|
(592)
|
|
2,840
|
|
3,086
|
Interest and finance
expense
|
|
(1,277)
|
|
(2,902)
|
|
(8,739)
|
|
(10,277)
|
Loss before income
taxes
|
|
(631,045)
|
|
(312,397)
|
|
(637,317)
|
|
(429,089)
|
Income tax recovery
(expense)
|
|
105,318
|
|
19,333
|
|
92,494
|
|
(16,757)
|
Net loss for the
period
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
$
|
(526,706)
|
$
|
(293,615)
|
$
|
(545,588)
|
$
|
(445,851)
|
|
Non-controlling
interests
|
|
979
|
|
551
|
|
765
|
|
5
|
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share
attributable to common shareholders
|
|
|
|
|
|
|
|
Basic loss per
share
|
$
|
(3.48)
|
$
|
(1.94)
|
$
|
(3.60)
|
$
|
(2.94)
|
Diluted loss per
share
|
$
|
(3.48)
|
$
|
(1.94)
|
$
|
(3.60)
|
$
|
(2.96)
|
Weighted average
shares outstanding (in 000's) Basic
|
|
151,534
|
|
151,428
|
|
151,511
|
|
151,501
|
Weighted average
shares outstanding (in 000's) Diluted
|
|
151,534
|
|
151,428
|
|
151,511
|
|
153,430
|
|
|
Consolidated
Statements of Comprehensive Income
|
(unaudited in
thousands of U.S. dollars)
|
|
Three months
ended
December 31,
|
Twelve months
ended
December 31,
|
|
2014
|
2013
|
2014
|
2013
|
Net loss for the
period
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
|
|
|
|
|
|
|
|
|
Unrealized net loss on
available for sale securities
(net of zero dollars
tax)
|
|
(485)
|
|
(1,953)
|
|
(1,428)
|
|
(2,163)
|
Reclassification
adjustment for net loss included in earnings
|
|
319
|
|
2,775
|
|
1,081
|
|
1,062
|
Total
comprehensive loss for the period
|
$
|
(525,893)
|
$
|
(292,242)
|
$
|
(545,170)
|
$
|
(446,947)
|
|
|
|
|
|
|
|
|
|
Total
comprehensive loss attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
$
|
(526,872)
|
$
|
(292,793)
|
$
|
(545,935)
|
$
|
(446,952)
|
Non-controlling
interests
|
|
979
|
|
551
|
|
765
|
|
5
|
|
$
|
(525,893)
|
$
|
(292,242)
|
$
|
(545,170)
|
$
|
(446,947)
|
Pan American
Silver Corp.
|
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
(Unaudited in
thousands of U.S. dollars)
|
|
|
|
|
|
Three months
ended
|
Twelve months
ended
|
|
|
December
31,
|
December
31,
|
|
|
2014
|
2013
|
2014
|
2013
|
Cash flow from
operating activities
|
|
|
|
|
|
|
|
|
Net loss earnings for
the year
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
|
|
|
|
|
|
|
|
Current income taxes
expense
|
|
10,136
|
|
12,523
|
|
35,808
|
|
55,691
|
Deferred income tax
recovery
|
|
(115,454)
|
|
(31,856)
|
|
(128,302)
|
|
(38,934)
|
Depreciation and
amortization
|
|
38,493
|
|
31,612
|
|
147,710
|
|
135,913
|
Impairment
charge
|
|
596,262
|
|
336,785
|
|
596,262
|
|
540,228
|
Accretion on closure
and decommissioning provision
|
|
809
|
|
757
|
|
3,238
|
|
3,030
|
Unrealized (gains)
losses on foreign exchange
|
|
(618)
|
|
(656)
|
|
4,034
|
|
(922)
|
Share-based
compensation expense
|
|
504
|
|
67
|
|
2,529
|
|
2,173
|
Unrealized (gains)
losses on commodity contracts
|
|
-
|
|
(1,800)
|
|
-
|
|
25
|
Loss (gain) on
derivatives
|
|
252
|
|
(1,249)
|
|
(1,348)
|
|
(16,715)
|
Gain on sale of
assets
|
|
(945)
|
|
(5,969)
|
|
(1,145)
|
|
(14,068)
|
Net realizable value
adjustment for inventory
|
|
2,212
|
|
8,410
|
|
29,953
|
|
12,967
|
Changes in non-cash
operating working capital
|
|
4,209
|
|
12,956
|
|
16,669
|
|
(14,640)
|
Operating cash
flows before interest and income taxes
|
|
10,133
|
|
68,516
|
|
160,585
|
|
218,902
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
(1,868)
|
|
(309)
|
|
(5,051)
|
|
(3,425)
|
Interest
received
|
|
249
|
|
80
|
|
1,792
|
|
2,138
|
Income taxes
paid
|
|
(7,691)
|
|
(22,131)
|
|
(33,138)
|
|
(98,009)
|
Net cash generated
from operating activities
|
|
823
|
|
46,156
|
|
124,188
|
|
119,606
|
|
|
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
|
|
|
Payments for mineral
property, plant and equipment
|
|
(30,131)
|
|
(33,669)
|
|
(131,761)
|
|
(159,401)
|
Proceeds (Purchase)
of short term investments
|
|
33,672
|
|
41,187
|
|
(13,524)
|
|
19,920
|
Proceeds from sale of
mineral property, plant and equipment
|
|
1,378
|
|
5,476
|
|
1,852
|
|
13,681
|
Refundable tax and
other asset expenditures
|
|
1,449
|
|
371
|
|
187
|
|
452
|
Net cash generated
(used) in investing activities
|
|
6,368
|
|
13,365
|
|
(143,246)
|
|
(125,348)
|
|
|
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from issue
of equity shares
|
|
3
|
|
-
|
|
3
|
|
-
|
Shares repurchased
and cancelled
|
|
-
|
|
-
|
|
-
|
|
(6,740)
|
Dividends
paid
|
|
(18,933)
|
|
(18,881)
|
|
(75,751)
|
|
(75,755)
|
Payment of Proceeds
from short term loan
|
|
(444)
|
|
4,870
|
|
(2,438)
|
|
23,496
|
Payments of
construction and equipment leases
|
|
(1,544)
|
|
(2,554)
|
|
(5,347)
|
|
(30,238)
|
Net distributions to
non-controlling interests
|
|
-
|
|
(621)
|
|
(375)
|
|
(925)
|
Net cash used in
financing activities
|
|
(20,918)
|
|
(17,186)
|
|
(83,908)
|
|
(90,162)
|
Effects of exchange
rate changes on cash
|
|
(62)
|
|
(24)
|
|
(778)
|
|
(367)
|
Net (decrease)
increase in cash
|
|
(13,789)
|
|
42,311
|
|
(103,744)
|
|
(96,271)
|
Cash at the beginning
of the period
|
|
159,982
|
|
207,626
|
|
249,937
|
|
346,208
|
Cash at the end of
the period
|
$
|
146,193
|
$
|
249,937
|
$
|
146,193
|
$
|
249,937
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash
Flow Information
|
|
|
|
|
|
|
|
|
Significant
Non-Cash Items
|
|
|
|
|
|
|
|
|
Contracted other
equipment acquired by leases
|
$
|
636
|
$
|
331
|
$
|
3,230
|
$
|
3,331
|
Stock compensation
issued to employees and directors
|
$
|
1,389
|
$
|
971
|
$
|
1,461
|
$
|
1,035
|
Mine Operations
Highlights (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
La
Colorada
|
|
|
|
|
|
|
|
|
Tonnes milled -
kt
|
|
119.7
|
|
117.7
|
|
471.3
|
|
448.7
|
Average silver grade
– grams per tonne
|
|
373
|
|
366
|
|
366
|
|
352
|
Average silver
recovery - %
|
|
89.7
|
|
89.9
|
|
89.8
|
|
89.9
|
Silver –
koz
|
|
1,286
|
|
1,246
|
|
4,979
|
|
4,566
|
Gold – koz
|
|
0.72
|
|
0.68
|
|
2.57
|
|
2.58
|
Zinc – kt
|
|
2.19
|
|
1.86
|
|
7.70
|
|
6.76
|
Lead – kt
|
|
1.02
|
|
0.87
|
|
3.74
|
|
3.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per
ounce of silver net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce
net of by-products (2)
|
$
|
7.57
|
$
|
8.20
|
$
|
8.14
|
$
|
9.43
|
Total cost per ounce
net of by-products (2)
|
$
|
9.54
|
$
|
10.09
|
$
|
10.09
|
$
|
11.27
|
|
|
|
|
|
|
|
|
|
Payable silver
koz
|
|
1,202
|
|
1,191
|
|
4,756
|
|
4,365
|
|
|
|
|
|
|
|
|
|
Sustaining Capital
Expenditures - thousands
|
$
|
1,488
|
$
|
2,250
|
$
|
13,476
|
$
|
13,574
|
|
|
|
|
|
|
|
|
|
Dolores
|
|
|
|
|
|
|
|
|
Tonnes milled -
kt
|
|
1,611.9
|
|
1,223.2
|
|
6,053.9
|
|
5.351.9
|
Average silver grade
– grams per tonne
|
|
42
|
|
45
|
|
40
|
|
48
|
Average gold grade –
grams per tonne
|
|
0.48
|
|
0.43
|
|
0.44
|
|
0.46
|
Average silver
recovery - %
|
|
44.2
|
|
51.9
|
|
51.8
|
|
42.7
|
Average gold recovery
- %
|
|
72.6
|
|
91.3
|
|
78.3
|
|
82.1
|
Silver –
koz
|
|
954
|
|
922
|
|
3,982
|
|
3,503
|
Gold – koz
|
|
17.99
|
|
15.60
|
|
66.82
|
|
65.23
|
|
|
|
|
|
|
|
|
|
Cash cost per
ounce of silver net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce
net of by-products (2)
|
$
|
12.99
|
$
|
13.77
|
$
|
12.94
|
$
|
7.47
|
Total cost per ounce
net of by-products (2)
|
$
|
31.22
|
$
|
23.57
|
$
|
27.39
|
$
|
20.12
|
|
|
|
|
|
|
|
|
|
Payable silver
koz
|
|
951
|
|
920
|
|
3,969
|
|
3,494
|
|
|
|
|
|
|
|
|
|
Sustaining Capital
Expenditures - thousands
|
$
|
7,962
|
$
|
10,411
|
$
|
27,632
|
$
|
36,159
|
|
|
|
|
|
|
|
|
|
Alamo
Dorado
|
|
|
|
|
|
|
|
|
Tonnes milled -
kt
|
|
481.4
|
|
460.0
|
|
1,763.0
|
|
1,790.3
|
Average silver grade
– grams per tonne
|
|
63
|
|
98
|
|
75
|
|
101
|
Average gold grade –
grams per tonne
|
|
0.40
|
|
0.41
|
|
0.37
|
|
0.36
|
Average silver
recovery - %
|
|
83.8
|
|
83.8
|
|
81.4
|
|
87.1
|
Silver –
koz
|
|
865
|
|
1,239
|
|
3,473
|
|
5,079
|
Gold – koz
|
|
5.67
|
|
5.94
|
|
17.56
|
|
17.60
|
Copper –
kt
|
|
10
|
|
50
|
|
30
|
|
120
|
|
|
|
|
|
|
|
|
|
Cash cost per ounce
of silver net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce
net of by-products (2)
|
$
|
14.07
|
$
|
8.81
|
$
|
12.89
|
$
|
7.45
|
Total cost per ounce
net of by-products (2)
|
$
|
16.96
|
$
|
11.81
|
$
|
16.28
|
$
|
10.98
|
|
|
|
|
|
|
|
|
|
Payable silver -
koz
|
|
859
|
|
1,228
|
|
3,454
|
|
5,043
|
|
|
|
|
|
|
|
|
|
Sustaining Capital
Expenditures - thousands
|
$
|
67
|
$
|
542
|
$
|
293
|
$
|
7,621
|
|
|
|
|
|
|
|
|
|
Huaron
|
|
|
|
|
|
|
|
|
Tonnes milled -
kt
|
|
236.8
|
|
218.7
|
|
892.8
|
|
802.3
|
Average silver grade
– grams per tonne
|
|
157
|
|
154
|
|
154
|
|
158
|
Average zinc grade -
%
|
|
2.34
|
|
2.36
|
|
2.41
|
|
2.53
|
Average silver
recovery - %
|
|
82.5
|
|
81.8
|
|
83.2
|
|
81.8
|
Silver –
koz
|
|
952
|
|
885
|
|
3,635
|
|
3,304
|
Gold – koz
|
|
0.30
|
|
0.26
|
|
1.16
|
|
0.94
|
Zinc – kt
|
|
3.37
|
|
3.51
|
|
14.20
|
|
14.02
|
Lead – kt
|
|
1.63
|
|
1.49
|
|
6.03
|
|
5.84
|
Copper –
kt
|
|
1.71
|
|
0.99
|
|
5.88
|
|
3.39
|
|
|
|
|
|
|
|
|
|
Cash cost per
ounce of silver net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce
net of by-products (2) (3)
|
$
|
12.22
|
$
|
14.65
|
$
|
11.56
|
$
|
15.46
|
Total cost per ounce
net of by-products (2)
|
$
|
16.16
|
$
|
18.77
|
$
|
15.54
|
$
|
19.51
|
|
|
|
|
|
|
|
|
|
Payable silver
- koz
|
|
818
|
|
760
|
|
3,120
|
|
2,879
|
|
|
|
|
|
|
|
|
|
Sustaining Capital
Expenditures - thousands
|
$
|
4,970
|
$
|
3,019
|
$
|
17,327
|
$
|
15,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Morococha
|
|
|
|
|
|
|
|
|
Tonnes milled -
kt
|
|
148.9
|
|
143.0
|
|
566.3
|
|
573.3
|
Average silver grade
– grams per tonne
|
|
145
|
|
161
|
|
152
|
|
149
|
Average zinc
grade - %
|
|
3.09
|
|
3.70
|
|
3.60
|
|
3.20
|
Average silver
recovery - %
|
|
86.69
|
|
88.1
|
|
86.39
|
|
87.9
|
Silver –
koz
|
|
603
|
|
643
|
|
2,370
|
|
2,397
|
Gold – koz
|
|
0.91
|
|
0.91
|
|
2.92
|
|
2.65
|
Zinc – kt
|
|
3.29
|
|
4.31
|
|
15.80
|
|
15.16
|
Lead – kt
|
|
1.10
|
|
0.94
|
|
4.74
|
|
3.77
|
Copper –
kt
|
|
1.26
|
|
0.65
|
|
3.08
|
|
2.03
|
|
|
|
|
|
|
|
|
|
Cash cost per
ounce of silver net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce
net of by-products (2) (3)
|
$
|
12.53
|
$
|
12.97
|
$
|
13.22
|
$
|
18.14
|
Total cost per ounce
net of by-products (2)
|
$
|
21.38
|
$
|
21.49
|
$
|
22.23
|
$
|
26.76
|
|
|
|
|
|
|
|
|
|
Payable silver -
koz
|
|
516
|
|
543
|
|
2,010
|
|
2,046
|
|
|
|
|
|
|
|
|
|
Sustaining Capital
Expenditures - thousands
|
$
|
3,149
|
$
|
2,822
|
$
|
10,199
|
$
|
18,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San
Vicente
|
|
|
|
|
|
|
|
|
Tonnes milled -
kt
|
|
85.1
|
|
79.7
|
|
316.0
|
|
319.4
|
Average silver grade
– grams per tonne
|
|
454
|
|
415
|
|
417
|
|
412
|
Average zinc grade -
%
|
|
2.10
|
|
2.58
|
|
2.37
|
|
2.48
|
Average silver
recovery - %
|
|
94.5
|
|
93.4
|
|
93.2
|
|
93.8
|
Silver –
koz
|
|
1,172
|
|
994
|
|
3,949
|
|
3,967
|
Zinc – kt
|
|
1.38
|
|
1.59
|
|
5.84
|
|
6.20
|
Lead – kt
|
|
0.16
|
|
0.17
|
|
0.50
|
|
0.56
|
|
|
|
|
|
|
|
|
|
Cash cost per
ounce of silver net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce
net of by-products (2)
|
$
|
11.88
|
$
|
14.53
|
$
|
13.16
|
$
|
15.51
|
Total cost per ounce
net of by-products (2)
|
$
|
13.84
|
$
|
17.05
|
$
|
15.36
|
$
|
18.07
|
|
|
|
|
|
|
|
|
|
Payable silver -
koz
|
|
1,084
|
|
907
|
|
3,636
|
|
3,614
|
|
|
|
|
|
|
|
|
|
Sustaining Capital
Expenditures - thousands
|
$
|
992
|
$
|
1,864
|
$
|
3,415
|
$
|
8,165
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manantial
Espejo
|
|
|
|
|
|
|
|
|
Tonnes milled -
kt
|
|
210.4
|
|
191.4
|
|
796.9
|
|
719.6
|
Average silver grade
– grams per tonne
|
|
144
|
|
159
|
|
157
|
|
150
|
Average gold grade –
grams per tonne
|
|
2.86
|
|
4.16
|
|
2.82
|
|
2.81
|
Average silver
recovery - %
|
|
92.0
|
|
91.6
|
|
92.1
|
|
91.3
|
Average gold recovery
- %
|
|
94.8
|
|
96.2
|
|
95.2
|
|
95.4
|
Silver –
koz
|
|
913
|
|
871
|
|
3,725
|
|
3,144
|
Gold – koz
|
|
18.27
|
|
22.83
|
|
70.47
|
|
60.82
|
|
|
|
|
|
|
|
|
|
Cash cost per
ounce of silver net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce
net of by-products (2)
|
$
|
13.93
|
$
|
(1.58)
|
$
|
10.12
|
$
|
8.55
|
Total cost per ounce
net of by-products (2)
|
$
|
25.36
|
$
|
6.67
|
$
|
20.76
|
$
|
19.03
|
|
|
|
|
|
|
|
|
|
Payable silver -
koz
|
|
911
|
|
869
|
|
3,717
|
|
3,138
|
|
|
|
|
|
|
|
|
|
Sustaining Capital
Expenditures - thousands
|
$
|
5,543
|
$
|
4,362
|
$
|
26,741
|
$
|
12,002
|
(1)
|
Reported metal
figures in the tables in this section are quantities of metal
produced.
|
(2)
|
Cash costs per ounce
and total costs per ounce are non-GAAP measurements. Please refer
to section Alternative Performance (Non-GAAP) Measures for a
detailed reconciliation of these measures to our cost of
sales.
|
(3)
|
Please refer to note
(6) under "Financial & Operating Highlights" table.
|
Total Cash Costs
and Total Production Costs per Ounce of Payable Silver, net of
by-product credits (1)
|
(Unaudited in
thousands of U.S. dollars)
|
|
|
Three months
ended
December
31,
|
Twelve months
ended
December
31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Production
costs
|
|
$
|
140,695
|
$
|
136,223
|
$
|
568,204
|
$
|
530,613
|
Add/(Subtract)
|
|
|
|
|
|
|
|
|
|
Royalties
|
|
|
5,277
|
|
5,570
|
|
27,955
|
|
26,459
|
Smelting, refining,
and transportation charges
|
|
|
21,195
|
|
19,767
|
|
76,968
|
|
76,547
|
Worker's
participation and voluntary payments
|
|
|
113
|
|
(531)
|
|
(484)
|
|
(1,067)
|
Change in
inventories
|
|
|
8,966
|
|
4,050
|
|
15,835
|
|
(624)
|
Other
|
|
|
(1,461)
|
|
1,311
|
|
(5,653)
|
|
(5,408)
|
Non-controlling
interests (2)
|
|
|
(1,204)
|
|
(1,239)
|
|
(4,746)
|
|
(5,967)
|
Metal Inventory
write-down
|
|
|
(2,212)
|
|
(8,411)
|
|
(29,953)
|
|
(12,967)
|
Cash Operating
Costs before by-product credits
|
|
|
171,369
|
|
156,740
|
|
648,126
|
|
607,586
|
|
|
|
|
|
|
|
|
|
|
Less gold
credit
|
|
|
(51,794)
|
|
(57,882)
|
|
(201,317)
|
|
(205,204)
|
Less zinc
credit
|
|
|
(19,676)
|
|
(18,680)
|
|
(81,357)
|
|
(69,688)
|
Less lead
credit
|
|
|
(7,412)
|
|
(7,079)
|
|
(29,903)
|
|
(27,694)
|
Less copper
credit
|
|
|
(16,935)
|
|
(9,872)
|
|
(52,856)
|
|
(35,609)
|
Cash Operating
Costs net of by-product credits
|
A
|
|
75,554
|
|
63,228
|
|
282,693
|
|
269,391
|
|
|
|
|
|
|
|
|
|
|
Add/(Subtract)
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
38,493
|
|
31,612
|
|
147,710
|
|
135,913
|
Closure and
decommissioning provision
|
|
|
809
|
|
758
|
|
3,238
|
|
3,030
|
Change in
inventories
|
|
|
3,712
|
|
525
|
|
7,422
|
|
5,451
|
Other
|
|
|
-
|
|
(248)
|
|
-
|
|
(971)
|
Non-controlling
interests (2)
|
|
|
(493)
|
|
(494)
|
|
(1,938)
|
|
(2,109)
|
Total Production
Costs net of by-product credits
(1)
|
B
|
$
|
118,072
|
$
|
95,381
|
$
|
439,124
|
$
|
410,706
|
|
|
|
|
|
|
|
|
|
|
Payable Silver
Production (koz)
|
C
|
|
6,340.4
|
|
6,419.1
|
|
24,663.4
|
|
24,578.5
|
Cash Costs per
ounce net of by-product credits
|
(A*$1000)/C
|
$
|
11.92
|
$
|
9.85
(3)
|
$
|
11.46
(3)
|
$
|
10.96
(3)
|
Total Production
Costs per ounce net of by-product credits
|
(B*$1000)/C
|
$
|
18.62
|
$
|
14.86
|
$
|
17.80
|
$
|
16.71
|
(1)
|
Figures in this table
and in the associated tables below may not add due to
rounding.
|
(2)
|
Figures presented in
the reconciliation table above are on a 100% basis as presented in
the statements with an adjustment line item to account for the
portion
of the Morococha and San Vicente mines owned by non-controlling
interests, an expense item not included in operating cash costs.
The associated tables below
are for the Company's share of ownership only.
|
(3)
|
Please refer to note
(6) under "Financial & Operating Highlights" table.
|
|
Three months ended
December 31, 2014
|
|
|
|
La
Colorada
|
|
Dolores
|
|
Alamo
Dorado
|
|
Huaron
|
|
Morococha
|
|
San
Vicente
|
|
Manantial
Espejo
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
Cash Costs before
by-product credits
|
A
|
$
|
15,824
|
$
|
33,909
|
$
|
18,896
|
$
|
29,001
|
|
22,046
|
$
|
15,736
|
$
|
34,500
|
$
|
169,913
|
|
Less gold
credit
|
b1
|
$
|
(681)
|
$
|
(21,555)
|
$
|
(6,775)
|
$
|
(36)
|
$
|
(798)
|
$
|
(67)
|
$
|
(21,812)
|
$
|
(51,724)
|
|
Less zinc
credit
|
b2
|
$
|
(4,154)
|
$
|
-
|
$
|
-
|
$
|
(6,177)
|
$
|
(6,110)
|
$
|
(2,586)
|
$
|
-
|
$
|
(19,028)
|
|
Less lead
credit
|
b3
|
$
|
(1,897)
|
$
|
-
|
$
|
-
|
$
|
(3,049)
|
$
|
(2,069)
|
$
|
(211)
|
$
|
-
|
$
|
(7,227)
|
|
Less copper
credit
|
b4
|
$
|
-
|
$
|
-
|
$
|
(32)
|
$
|
(9,746)
|
$
|
(6,604)
|
$
|
-
|
$
|
-
|
$
|
(16,382)
|
Sub-total by-product
credits(1)
|
B=( b1+
b2+ b3+ b4)
|
$
|
(6,731)
|
$
|
(21,555)
|
$
|
(6,807)
|
$
|
(19,009)
|
$
|
(15,581)
|
$
|
(2,864)
|
$
|
(21,812)
|
$
|
(94,360)
|
Cash Costs net of
by-product
credits
(1)
|
C=(A+B)
|
$
|
9,093
|
$
|
12,354
|
$
|
12,089
|
$
|
9,993
|
$
|
6,465
|
$
|
12,872
|
$
|
12,688
|
$
|
75,553
|
Depreciation,
amortization & reclamation
|
D
|
$
|
2,371
|
$
|
17,337
|
$
|
2,484
|
$
|
3,223
|
$
|
4,566
|
$
|
2,131
|
$
|
10,414
|
$
|
42,526
|
Total production
costs net of by-product credits (1)
|
E=(C+D)
|
$
|
11,464
|
$
|
29,691
|
$
|
14,573
|
$
|
13,216
|
$
|
11,031
|
$
|
15,003
|
$
|
23,102
|
$
|
118,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable ounces of
silver (koz)
|
F
|
|
1,202
|
|
951
|
|
859
|
|
818
|
|
516
|
|
1,084
|
|
911
|
|
6,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per
Ounce of Silver net of by-product credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash cost per
ounce net of by-products
|
=C/F
|
$
|
7.57
|
$
|
12.99
|
$
|
14.07
|
$
|
12.22
|
$
|
12.53
|
$
|
11.88
|
$
|
13.93
|
$
|
11.92
|
Total production cost
per ounce net of by-products
|
=E/F
|
$
|
9.54
|
$
|
31.22
|
$
|
16.96
|
$
|
16.16
|
$
|
21.38
|
$
|
13.84
|
$
|
25.36
|
$
|
18.62
|
|
Twelve months ended
December 31, 2014
|
|
|
|
La
Colorada
|
|
Dolores
|
|
Alamo
Dorado
|
|
Huaron
|
|
Morococha
|
|
San
Vicente
|
|
Manantial
Espejo
|
Consolidated
Total
|
Cash Costs before
by-product credits
|
A
|
$
|
62,635
|
$
|
135,665
|
$
|
66,727
|
$
|
107,990
|
$
|
83,915
|
$
|
59,287
|
$
|
126,500
|
$
|
642,720
|
|
Less gold
credit
|
b1
|
$
|
(2,534)
|
$
|
(84,317)
|
$
|
(22,048)
|
$
|
(295)
|
$
|
(2,730)
|
$
|
(254)
|
$
|
(88,898)
|
$
|
(201,075)
|
|
Less zinc
credit
|
b2
|
$
|
(14,128)
|
$
|
-
|
$
|
-
|
$
|
(25,414)
|
$
|
(28,381)
|
$
|
(10,504)
|
$
|
-
|
$
|
(78,426)
|
|
Less lead
credit
|
b3
|
$
|
(7,265)
|
$
|
-
|
$
|
-
|
$
|
(11,817)
|
$
|
(9,340)
|
$
|
(663)
|
$
|
-
|
$
|
(29,086)
|
|
Less copper
credit
|
b4
|
$
|
-
|
$
|
-
|
$
|
(164)
|
$
|
(34,394)
|
$
|
(16,884)
|
$
|
-
|
$
|
-
|
$
|
(51,442)
|
Sub-total by-product
credits(1)
|
B=( b1+
b2+ b3+ b4)
|
$
|
(23,927)
|
$
|
(84,317)
|
$
|
(22,212)
|
$
|
(71,920)
|
$
|
(57,335)
|
$
|
(11,420)
|
$
|
(88,898)
|
$
|
(360,028)
|
Cash Costs net of
by-product
credits
(1)
|
C=(A+B)
|
$
|
38,708
|
$
|
51,347
|
$
|
44,516
|
$
|
36,070
|
$
|
26,581
|
$
|
47,867
|
$
|
37,602
|
$
|
282,692
|
Depreciation,
amortization & reclamation
|
D
|
$
|
9,278
|
$
|
57,372
|
$
|
11,716
|
$
|
12,417
|
$
|
18,118
|
$
|
7,979
|
$
|
39,551
|
$
|
156,432
|
Total production
costs net of by-product credits (1)
|
E=(C+D)
|
$
|
47,986
|
$
|
108,720
|
$
|
56,231
|
$
|
48,488
|
$
|
44,699
|
$
|
55,846
|
$
|
77,154
|
$
|
439,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable ounces of
silver (koz)
|
F
|
|
4,756
|
|
3,969
|
|
3,454
|
|
3,120
|
|
2,010
|
|
3,636
|
|
3,717
|
|
24,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per
Ounce of Silver net of by-product credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash cost per
ounce net of by-products
|
=C/F
|
$
|
8.14
|
$
|
12.94
|
$
|
12.89
|
$
|
11.56
(2)
|
$
|
13.22
(2)
|
$
|
13.16
|
$
|
10.12
|
$
|
11.46
(2)
|
Total production cost
per ounce net of by-products
|
=E /F
|
$
|
10.09
|
$
|
27.39
|
$
|
16.28
|
$
|
15.54
|
$
|
22.23
|
$
|
15.36
|
$
|
20.76
|
$
|
17.80
|
(1)
|
Totals may not add
due to rounding.
|
(2)
|
Please refer to note
(6) under "Financial & Operating Highlights" table.
|
|
Three months ended
December 31, 2013
|
|
|
|
La
Colorada
|
|
Dolores
|
|
Alamo
Dorado
|
|
Huaron
|
|
Morococha
|
|
San
Vicente
|
|
Manantial
Espejo
|
Consolidated
Total
|
Cash Costs before
by-product credits
|
A
|
$
|
15,161
|
$
|
32,484
|
$
|
18,634
|
$
|
25,198
|
$
|
20,430
|
$
|
16,116
|
$
|
27,464
|
$
|
155,487
|
|
Less gold
credit
|
b1
|
$
|
(690)
|
$
|
(19,818)
|
$
|
(7,527)
|
$
|
(86)
|
$
|
(855)
|
$
|
-
|
$
|
(28,835)
|
$
|
(57,810)
|
|
Less zinc
credit
|
b2
|
$
|
(3,001)
|
$
|
-
|
$
|
-
|
$
|
(5,585)
|
$
|
(6,850)
|
$
|
(2,536)
|
$
|
-
|
$
|
(17,972)
|
|
Less lead
credit
|
b3
|
$
|
(1,697)
|
$
|
-
|
$
|
-
|
$
|
(2,934)
|
$
|
(1,868)
|
$
|
(402)
|
$
|
-
|
$
|
(6,902)
|
|
Less copper
credit
|
b4
|
$
|
-
|
$
|
-
|
$
|
(281)
|
$
|
(5,461)
|
$
|
(3,810)
|
$
|
-
|
$
|
-
|
$
|
(9,552)
|
Sub-total by-product
credits(1)
|
B=( b1+
b2+ b3+ b4)
|
$
|
(5,388)
|
$
|
(19,818)
|
$
|
(7,807)
|
$
|
(14,066)
|
$
|
(13,384)
|
$
|
(2,938)
|
$
|
(28,835)
|
$
|
(92,236)
|
Cash Costs net of
by-product
credits
(1)
|
C=(A+B)
|
$
|
9,773
|
$
|
12,666
|
$
|
10,827
|
$
|
11,132
|
$
|
7,046
|
$
|
13,178
|
$
|
(1,372)
|
$
|
63,251
|
Depreciation,
amortization & reclamation
|
D
|
$
|
2,245
|
$
|
9,021
|
$
|
3,676
|
$
|
3,132
|
$
|
4,622
|
$
|
2,284
|
$
|
7,173
|
$
|
32,153
|
Total production
costs net of by-product credits (1)
|
E=(C+D)
|
$
|
12,018
|
$
|
21,688
|
$
|
14,503
|
$
|
14,263
|
$
|
11,668
|
$
|
15,463
|
$
|
5,801
|
$
|
95,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable ounces of
silver (koz)
|
F
|
|
1,191
|
|
920
|
|
1,228
|
|
760
|
|
543
|
|
907
|
|
869
|
|
6,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per
Ounce of Silver net of by-product credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash cost per
ounce net of by-products
|
=C/F
|
$
|
8.20
|
$
|
13.77
|
$
|
8.81
|
$
|
14.65
(2)
|
$
|
12.97
(2)
|
$
|
14.53
|
$
|
(1.58)
|
$
|
9.85
(2)
|
Total production cost
per ounce net of by-products
|
=E/F
|
$
|
10.09
|
$
|
23.57
|
$
|
11.81
|
$
|
18.77
|
$
|
21.49
|
$
|
17.05
|
$
|
6.67
|
$
|
14.86
|
|
Twelve months ended
December 31, 2013
|
|
|
|
La
Colorada
|
|
Dolores
|
|
Alamo
Dorado
|
|
Huaron
|
|
Morococha
|
|
San
Vicente
|
|
Manantial
Espejo
|
Consolidated
Total
|
Cash Costs before
by-product credits
|
A
|
$
|
61,554
|
$
|
117,203
|
$
|
62,454
|
$
|
99,745
|
$
|
84,087
|
$
|
67,123
|
$
|
110,810
|
$
|
602,976
|
|
Less gold
credit
|
b1
|
$
|
(2,894)
|
$
|
(91,113)
|
$
|
(24,194)
|
$
|
(177)
|
$
|
(2,611)
|
$
|
-
|
$
|
(83,995)
|
$
|
(204,985)
|
|
Less zinc
credit
|
b2
|
$
|
(10,895)
|
$
|
-
|
$
|
-
|
$
|
(22,245)
|
$
|
(24,110)
|
$
|
(9,897)
|
$
|
-
|
$
|
(67,148)
|
|
Less lead
credit
|
b3
|
$
|
(6,605)
|
$
|
-
|
$
|
-
|
$
|
(11,685)
|
$
|
(7,553)
|
$
|
(1,157)
|
$
|
-
|
$
|
(27,000)
|
|
Less copper
credit
|
b4
|
$
|
-
|
$
|
-
|
$
|
(712)
|
$
|
(21,128)
|
$
|
(12,704)
|
$
|
-
|
$
|
-
|
$
|
(34,544)
|
Sub-total by-product
credits(1)
|
B=( b1+
b2+ b3+ b4)
|
$
|
(20,394)
|
$
|
(91,113)
|
$
|
(24,907)
|
$
|
(55,235)
|
$
|
(46,978)
|
$
|
(11,055)
|
$
|
(83,995)
|
$
|
(333,677)
|
Cash Costs net of
by-product
credits
(1)
|
C=(A+B)
|
$
|
41,160
|
$
|
26,090
|
$
|
37,548
|
$
|
44,510
|
$
|
37,109
|
$
|
56,068
|
$
|
26,815
|
$
|
269,299
|
Depreciation,
amortization & reclamation
|
D
|
$
|
8,010
|
$
|
44,210
|
$
|
17,813
|
$
|
11,667
|
$
|
17,648
|
$
|
9,226
|
$
|
32,885
|
$
|
141,460
|
Total production
costs net of by-product credits (1)
|
E=(C+D)
|
$
|
49,170
|
$
|
70,301
|
$
|
55,361
|
$
|
56,177
|
$
|
54,757
|
$
|
65,294
|
$
|
59,700
|
$
|
410,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable ounces of
silver (koz)
|
F
|
|
4,365
|
|
3,494
|
|
5,043
|
|
2,879
|
|
2,046
|
|
3,614
|
|
3,138
|
|
24,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per
Ounce of Silver net of by-product credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash cost per
ounce net of by-products
|
=C/F
|
$
|
9.43
|
$
|
7.47
|
$
|
7.45
|
$
|
15.46
(2)
|
$
|
18.14
(2)
|
$
|
15.51
|
$
|
8.55
|
$
|
10.96
(2)
|
Total production cost
per ounce net of by-products
|
=E/F
|
$
|
11.27
|
$
|
20.12
|
$
|
10.98
|
$
|
19.51
|
$
|
26.76
|
$
|
18.07
|
$
|
19.03
|
$
|
16.71
|
(1)
|
Totals may not add
due to rounding.
|
(2)
|
Please refer to note
(6) under "Financial & Operating Highlights" table.
|
All-In Sustaining
Cost per Silver Ounce Sold (Unaudited in thousands of U.S.
dollars)
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Twelve months
ended
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Direct Operating
Costs
|
|
$
|
138,484
|
$
|
127,812
|
$
|
538,251
|
$
|
517,646
|
Net Realizable Value
Adjustments
|
|
|
2,212
|
|
8,411
|
|
29,953
|
|
12,967
|
Production
Costs
|
|
|
140,695
|
|
136,223
|
|
568,204
|
|
530,613
|
Royalties
|
|
|
5,277
|
|
5,570
|
|
27,955
|
|
26,459
|
Smelting, refining
and transportation charges(1)
|
|
|
24,159
|
|
22,063
|
|
86,470
|
|
83,244
|
Less by-product
credits(1)
|
|
|
(84,141)
|
|
(85,696)
|
|
(361,309)
|
|
(331,809)
|
Cash cost of sales
net of by- products (2)
|
|
|
85,989
|
|
78,160
|
|
321,319
|
|
308,507
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital
(3)
|
|
|
24,172
|
|
25,086
|
|
99,083
|
|
111,646
|
Exploration and
project development
|
|
|
4,278
|
|
990
|
|
13,225
|
|
15,475
|
Reclamation cost
accretion
|
|
|
809
|
|
757
|
|
3,238
|
|
3,030
|
General &
administrative expense
|
|
|
3,051
|
|
2,602
|
|
17,908
|
|
17,596
|
All-in sustaining costs
(2)
|
A
|
$
|
118,298
|
$
|
107,595
|
$
|
454,774
|
$
|
456,255
|
Payable ounces
sold ( in koz)
|
B
|
|
6,352.6
|
|
6,436.0
|
|
25,430.5
|
|
25,478.0
|
All-in sustaining
cost per silver ounce sold, net of by-products
|
(A*$1000)/B
|
$
|
18.62
|
$
|
16.72
|
$
|
17.88
|
$
|
17.91
|
All-in sustaining
cost per silver ounce sold, net of by-products (Excludes NRV
Adj.)
|
|
$
|
18.27
|
$
|
15.41
|
$
|
16.71
|
$
|
17.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining
Capital (Unaudited in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
payments for mineral property, plant and equipment and sustaining
capital
|
|
|
Three months
ended
December
31,
|
Twelve months
ended
December
31,
|
|
(in thousands of USD)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Payments for mineral
property, plant and equipment (4)
|
$
|
30,131
|
$
|
33,669
|
$
|
131,761
|
$
|
159,401
|
|
Add/(Subtract)
|
|
|
|
|
|
|
|
|
|
Advances received for
leases (4)
|
|
636
|
|
331
|
|
3,230
|
|
3,331
|
|
Non-Sustaining capital (Dolores, Navidad, La Colorada
projects and other)
|
|
(6,595)
|
|
(8,914)
|
|
(35,908)
|
|
(51,085)
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining Capital
(2)
|
$
|
24,172
|
$
|
25,086
|
$
|
99,083
|
$
|
111,646
|
|
(1)
Included in the revenue line of the unaudited condensed
consolidated income statements and are reflective of realized metal
prices for the applicable periods.
(2) Totals
may not add due to rounding.
(3) Non –
GAAP measure: see section entitled "Sustaining Capital" for
detailed calculation.
(4) As
presented on the unaudited condensed consolidated statements of
cash flows.
|
|
|
SOURCE Pan American Silver Corp.