Pan American Silver Corp. Q3 FY2025 earnings call

• Record attributable free cash flow of $251.7 million in Q3. - Completed acquisition of MAG Silver in September, with Juanicipio showing cost reduction impact even in 1 month. - Attributable revenue $884.4M, net earnings $169.2M. - Operational highlights: Silver production at La Colorada improved, Huaron had lower grades; gold production had technical issues at several mines. - La Colorada Skarn has phased development approach with PEA expected Q2 2026. - Jacobina has optimization studies for mine and plant improvements. - Escobal's ILO 169 consultation ongoing. - Steve Busby transitioning to Special Adviser, Scott Campbell new COO.

Silver Segment: Attributable revenue in Q3 was a record $884.4 million. Attributable silver production was 5.5 million ounces, including 580,000 ounces from Juanicipio's 1-month contribution. Silver segment cash costs were $10.41 per ounce and all-in sustaining costs were $15.43 per ounce. Gold Segment: Attributable gold production was 183,500 ounces. Gold segment cash costs were $1,325 per ounce and all-in sustaining costs, excluding NRV inventory adjustments were $1,697 per ounce.

• Raised attributable silver production guidance to 22-22.5 million ounces. - Lowered Silver segment all-in sustaining costs to $14.50-$16 per ounce. - Gold guidance unchanged. - Confident of achieving Q4 guidance despite Q3 challenges.

• Technical issues at Cerro Moro, Peñon, Timmins, Minera Florida lingering into Q3 affecting production. - Royalty expense at La Colorada. - Exchange rate impacts on costs.

Q: Just curious on the guidance increase. Would it be safe to assume that the prior guidance for Juanicipio has remained the same as under MAG previously? And just wondering if there's been some modest tweaks for within the Silver segment on the guidance?

A: No, it's pretty similar to what MAG had. Obviously, as you can imagine, this is -- we're only in the second month really of having that operation with us. But we assume that the production should be pretty similar to what we've seen in September for the remaining months of the year.

Q: Maybe just on the gold guidance, which didn't change. Can you talk about how you're thinking about the fourth quarter in the context of some of the dilution that you cited at Timmins, El Peñon, some of the development delays you cited at Minera Florida?

A: We had our challenges certainly in Q3, but we're maintaining the guidance for Q4, and we're confident that, that will be achieved. We did have some dilution in Peñon, and we had some challenges and slight delays when it comes to ground support at both of our mines in Chile, but we're maintaining guidance and things in November have already started to look up for gold production in the southern countries.

Q: We know that you produce a little bit of base metals, too. And a large differential exists with zinc at $1.44 and lead at $0.93. Why do you think the zinc price outperformed where world steel output is down a couple of percent this year?

A: John, look, obviously, the base metals -- and by the way, it's I think, at the moment, only about 8% of our revenue. That will, for sure, increase once we have the La Colorada Skarn in production, but it's a small part of our revenue. When you look at the base metal, I'm sure zinc is pushed and outperforming as being included in several countries in their list of critical minerals. By the way, I'm sure you have noticed that silver got included in the U.S. as well on that list. But as you know, the base metal prices really reflect the outlook on the world economy and where that's moving. And I guess there's still some people worried about where this is going over the next few years, and that's reflected in those prices. But for sure, the inclusion of zinc and critical minerals helps the price.