Strong Free Cash Flow Generation, $300 million Returned to Shareholders in Q3
All amounts expressed in U.S. dollars unless otherwise indicated.
Unaudited tabular amounts are in millions of U.S. dollars and thousands of shares, except per ounce amounts, unless otherwise noted.
VANCOUVER, British Columbia--(BUSINESS WIRE)--November 04, 2026--
Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) ("Pan American" or the "Company") reports third quarter ("Q3 2026") financial results. The Company will host a conference call and webcast on November 5, 2026 to discuss the results; details provided further in this news release.
"Pan American continues to generate robust free cash flow. In the third quarter, we generated $377 million of Attributable(1) Free Cash Flow and returned $300 million to shareholders. Year-to-date, we have returned $701 million to shareholders through dividends and share repurchases, equivalent to $1.67 per share," said Michael Steinmann, President and Chief Executive Officer. "These returns are supported by $1.2 billion of Attributable(1) Free Cash Flow generated over the first nine months of the year and total available liquidity of $3.4 billion, including cash attributable to our interest in Juanicipio. Our strong financial position and cash flow generation enable us to provide enhanced shareholder returns, as we committed to earlier this year, and simultaneously invest in our organic growth opportunities. Our projects at La Colorada, Jacobina and Timmins are expected to enhance our production and lower our cost profile, creating long-term value for our shareholders."
"Year-to-date silver production remains within our guidance range, and Silver Segment all-in sustaining costs have been better than expected. For the full year, we expect silver production to be at the low end of our guidance range of 25 to 27 million ounces, primarily due to unplanned downtime at Huaron to repair the primary grinding mill foundation as well as from a higher ratio of gold-to-silver production at Cerro Moro. We expect full-year Silver Segment all-in sustaining costs to be towards the low end of our guidance range."
"We have revised our full-year gold production guidance to 660 to 680 thousand ounces, largely due to Jacobina where we are implementing measures to address seismicity and findings from a technical inspection by Brazil's National Mining Agency, primarily related to ventilation and secondary egress in certain areas of the mine."
The following highlights for Q3 2026 include certain measures that are not generally accepted accounting principles ("non-GAAP") financial measures. Please refer to the section titled "Alternative Performance (Non-GAAP) Measures" at the end of this news release for further information on these measures.
Q3 2026 Results:
-- Net earnings of $357 million, or $0.86 basic earnings per share.
-- Adjusted earnings(2) of $287 million, or $0.69 adjusted earnings per
share. The main adjustments to net earnings were the removal of
unrealized fair value adjustments to financial instruments (largely the
mark-to-market gain on the Company's interest in New Pacific Metals
Corp.) and the gain on the sale of the Larder exploration property.
-- Cash flow from operations of $377 million, net of $126 million of
income taxes paid and a $50 million working capital(2) build.
Attributable(1) cash flow from operations was $462 million, inclusive of
the Company's 44% ownership share of cash flow from Juanicipio.
-- Attributable(1) Free Cash Flow(2) of $377 million, inclusive of the
Company's 44% ownership share of Free Cash Flow from Juanicipio.
-- Attributable(1) silver production of 6.07 million ounces, below the
2026 Quarterly Operating Outlook(3), primarily due to mine sequencing at
Juanicipio and Cerro Moro. Annual silver production at Juanicipio remains
within guidance.
-- Attributable(1) gold production of 167.9 thousand ounces, below the
2026 Quarterly Operating Outlook(4), primarily reflecting lower than
expected production at Timmins and Shahuindo.
-- Silver Segment all-in sustaining costs ("AISC")(2)(5) of $11.21 per
silver ounce, better than the 2026 Quarterly Operating Outlook(3).
-- Gold Segment AISC(2)(6) of $2,281 per gold ounce, above the 2026
Quarterly Operating Outlook(3), due to lower-than-expected production and
higher costs for development, labour and consumables.
-- 2026 silver guidance reiterated(3): production of 25 to 27 million
ounces, now expected to be at the low end of the range, primarily due to
unplanned downtime in the fourth quarter of 2026 ("Q4 2026") at Huaron to
repair the primary grinding mill foundation and a higher ratio of
gold-to-silver production at Cerro Moro. Silver Segment AISC of $15.75 to
$18.25 per silver ounce are expected to be towards the low end of the
range.
-- 2026 gold guidance revised(3): production of 660 to 680 thousand ounces
compared to the previously indicated low end of the original guidance
range of 700 to 750 thousand ounces. Gold Segment AISC of $2,000 to
$2,150 per gold ounce, compared to prior guidance of $1,700 to $1,850 per
gold ounce. Please refer to the "2026 Operating Outlook" section of this
news release for further details.
-- Strong liquidity position: $1.9 billion in cash, cash equivalents and
short-term investments and $3.4 billion in total available liquidity,
including $180 million of cash at Juanicipio and $1.5 billion available
under the Company's amended senior unsecured revolving Credit Facility,
as at September 30, 2026.
-- $300 million returned to shareholders in Q3, through share repurchases
and dividends, bringing year-to-date shareholder returns to $701 million.
Over the nine-months ended September 30, 2026 ("YTD 2026"), approximately
9.6 million shares have been repurchased and cancelled.
-- Quarterly dividend declared: $0.185 per common share, or approximately
$76 million in aggregate, with respect to Q3 2026 was declared on
November 4, 2026, payable on or about November 27, 2026, to holders of
record of Pan American's common shares as of the close of markets on
November 16, 2026. The dividends are eligible dividends for Canadian
income tax purposes. The declaration, timing, amount and payment of any
future dividends remain at the discretion of the Company's Board of
Directors.
-- Strategic investment in Cadillac Mines: Pan American completed the sale
of its Larder exploration property in Ontario, Canada, resulting in Pan
American owning approximately 5.6% of the issued and outstanding common
shares of Cadillac Mines Corporation ("Cadillac Mines") on an undiluted
basis. The Larder property comprises over 6,400 hectares along the Larder
Lake Cadillac Break, immediately west of Cadillac Mines' Kerr-Addison
property.
-- Juanicipio conveyor project completed: Construction of the underground
transfer conveyor project at the Juanicipio mine was completed and
commissioning is expected to be completed by the end of 2026. The
conveyor is expected to improve efficiency and reduce the cost of
transporting ore from the San José del Valle ramp to surface.
(1) References to "Attributable" refer to the Company's ownership share of
results, which includes results from the operations that the Company
has a 100% interest in, as well as from the operations, specifically
Juanicipio and San Vicente, that the Company does not own a 100%
interest in.
(2) Adjusted earnings, Attributable Free Cash Flow, AISC, and total
available liquidity are non-GAAP measures; AISC are presented on an
Attributable basis; please refer to the "Alternative Performance
(Non-GAAP) Measures" section of this news release for a description of
the composition and usefulness of these non-GAAP measures; please also
refer to the Management Discussion and Analysis ("MD&A") for the period
ended September 30, 2026, for a detailed reconciliation of these
measures to the Q3 2026 Financial Statements.
(3) The 2026 Operating Outlook and the 2026 Quarterly Operating Outlook
were provided in the Company's annual MD&A dated February 18, 2026
("2025 Annual MD&A").
(4) The Company revised its outlook for Q3 2026 gold production, as per the
Company's MD&A dated August 12, 2026.
(5) Silver Segment AISC are calculated net of credits for realized revenues
from all metals other than silver and are calculated per ounce of
silver sold on an Attributable basis.
(6) Gold Segment AISC are calculated net of credits for realized revenues
from all metals other than gold and are calculated per ounce of gold
sold.
PROJECT UPDATES
La Colorada Skarn, Mexico
With respect to the La Colorada Skarn Project, YTD 2026 project capital of $33 million was largely directed at: exploration drilling, initial advances of the 588 Decline Project, and engineering work. The contractor selected for excavating the 12.4 km, 588 Decline Project has fully mobilized equipment and personnel to site and completed 168 metres of advance on the ramp and 56 metres of secondary development to the end of October 2026 since initiating the first cut in August 2026. The 588 Decline Project is expected to take 4 years to complete, representing the longest-lead component of the La Colorada Skarn project. The second long-lead component, the hoisting and ventilation shafts, is planned to be submitted for approval by the board of directors in early 2027 following the selection of the contractor and progress on engineering work over the remainder of 2026.
Jacobina, Brazil
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