Pan American Silver Corp. press release

Pan American Silver Reports Third Quarter 2026 Financial Results

2026-11-04

TSX - Toronto Stock Exchange · Silver · Zinc · Lead · Gold · Copper · Canada · Corporate Finance

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.

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

At the Jacobina mine, YTD 2026 project capital of $36 million was directed at: increased mine development to mitigate risks associated with seismicity; several studies as part of the optimization plan; the construction of two new carbon-in-pulp tanks, which were commissioned in Q3 2026; construction activities for upgrades to the main substation and motor control center; and infill exploration drilling directed towards expanding the mineral reserve and mineral resource base.

The Company continues to advance the four key projects under Jacobina's optimization plan, which are aimed at improving long-term operational efficiency. Engineering for the first-phase paste backfill plant is progressing, with permitting expected to commence and the plant submitted for approval by the board of directors in early 2027. Permitting and detailed engineering are targeted for completion by year-end 2027, with construction expected to be completed in early 2029. The Company is also advancing engineering and permitting activities for a tailings filtration plant and filter cake stacking facility, upgrades to the power supply, and extensive studies to assess the potential construction of a new, state-of-the-art processing facility to replace the existing plant.

Escobal, Guatemala

On September 22, 2026, the Ministry of Energy and Mines ("MEM"), in their capacity of leading the ILO 169 consultation process for Escobal, provided an update on the bilateral meetings that have occurred between the various government ministries and the Xinka representatives ("XP") over the past year, stating that the consultation process continues in compliance with the ruling issued by the Constitutional Court of Guatemala. The update also confirmed the advisors appointed to provide technical support to the XP in the bilateral meetings and in the final phase of the consultation process, as well as proposals made by the government ministries to address concerns raised by the XP. The update is available on the MEM's web page at https://mem.gob.gt/derecho-minero-escobal/ . There is currently no timeline for the conclusion of the Escobal ILO 169 consultation process and no date for a restart of operations at the Escobal mine.

Timmins, Canada

For the Timmins Camp Project, the Company completed the drift to the Samson deposit from the active Timmins West workings in Q3 2026, which allows for further exploration drilling of this mineral resource; an initial crosscut from this drift through the deposit is planned over the next few months. The Company is also on track to complete the exploration drift to the Vogel deposit from the active Bell Creek workings in the first quarter of 2027. With the surface drilling of these deposits having been completed, the drills have moved to Gold River and surface drilling of that deposit has commenced, which will provide fresh samples to conduct further metallurgical testing of the deposit.

The conceptual plan for the Timmins Camp Project involves the phased development of these adjacent mineral resources to support potential production growth and extension of mine life at Timmins. In Q3 2026, the Company progressed the Preliminary Economic Assessment ("PEA") that will define the scope, schedule, costs, and benefits for the project, which it plans to complete in the first half of 2027.

CONSOLIDATED FINANCIAL AND OPERATIONAL RESULTS

| | | Three months ended

September 30, | | | | | | | | Unit | | 2026 | | | 2025 | | | FINANCIAL | | | | | | | | | Revenue | $M | $ | 1,006 | | $ | 855 | | | Net earnings | $M | $ | 357 | | $ | 169 | | | Basic earnings per share (1)(2) | $/share | $ | 0.86 | | $ | 0.45 | | | Adjusted earnings (2) | $M | $ | 287 | | $ | 180 | | | Basic adjusted earnings per share (1)(2) | $/share | $ | 0.69 | | $ | 0.48 | | | Cash flow from operations | $M | $ | 377 | | $ | 313 | | | ATTRIBUTABLE FINANCIAL (3) | | | | | | | | | Revenue | $M | $ | 1,137 | | $ | 885 | | | Cash flow from operations | $M | $ | 462 | | $ | 328 | | | Sustaining capital expenditures (4) | $M | $ | (85 | ) | $ | (72 | ) | | Free cash flow (2) | $M | $ | 377 | | $ | 256 | | | ATTRIBUTABLE PRODUCTION (3) | | | | | | | | | Silver Production | koz | | 6,070 | | | 5,462 | | | Gold Production | koz | | 167.9 | | | 183.5 | | | Zinc Production | kt | | 15.2 | | | 12.6 | | | Lead Production | kt | | 7.7 | | | 6.2 | | | Copper Production | kt | | 0.7 | | | 0.8 | | | AISC ( 2)(3) | | | | | | | | | Silver Segment | $/Ag oz | $ | 11.21 | | $ | 15.43 | | | Gold Segment | $/Au oz | $ | 2,281 | | $ | 1,697 | | | AVERAGE REALIZED PRICES (5) | | | | | | | | | Silver | $/oz | $ | 63.74 | | $ | 39.08 | | | Gold | $/oz | $ | 4,267 | | $ | 3,479 | | | Zinc | $/t | $ | 3,910 | | $ | 2,768 | | | Lead | $/t | $ | 1,818 | | $ | 1,955 | | | Copper | $/t | $ | 15,059 | | $ | 9,791 | |

| | | September 30, 2026 | December 31, 2025 | | Shares outstanding end of period (thousands) | | 412,322 | 421,847 |

| (1) | | Per share amounts are based on basic weighted average common shares. | | (2) | | Non-GAAP measure; 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 MD&A for the period ended September 30, 2026, for a detailed reconciliation of these measures to the Q3 2026 Financial Statements. | | (3) | | Attributable financial, production and AISC figures are inclusive of Pan American's 44.0% interest in the Juanicipio mine less Pan American's non-controlling 5.0% interest in the San Vicente mine. Pan American uses the equity method to account for its interest in Juanicipio, as presented in the Company's Q3 2026 Financial Statements under Note 7 "Investment in Juanicipio". | | (4) | | As included in the AISC reconciliation of payments for mineral properties, plant and equipment and sustaining capital, inclusive of Pan American's 44.0% interest in the Juanicipio mine and reduced for Pan American's non-controlling 5.0% interest in the San Vicente mine. | | (5) | | Metal prices stated are inclusive of final settlement adjustments on concentrate sales. |

2026 OPERATING OUTLOOK

Based on production and costs to date, the Company reiterates its 2026 Operating Outlook for silver production, zinc, lead and copper ("base metal") production, Silver Segment AISC, and sustaining capital expenditures, as provided in the 2025 Annual MD&A. Project capital is now expected to be between $195 and $210 million in 2026 compared to the previous guidance range of $240 to $255 million, as per the MD&A for the period ended March 31, 2026, due to the timing of spending.

The Company now expects 2026 silver production to be at the low end of the annual 2026 guidance range of 25 to 27 million ounces, primarily due to unplanned downtime in Q4 2026 at Huaron to repair the primary grinding mill foundation, as well as from a higher ratio of gold-to-silver production at Cerro Moro. The Company maintains its original outlook for Silver Segment AISC of $15.75 to $18.25 per silver ounce, with AISC expected to be towards the low end of the range.

The Company has revised its 2026 Operating Outlook for gold production to a range of 660 to 680 thousand ounces, reflecting below-plan gold production at Jacobina, El Peñon, Shahuindo and Timmins in 2026.

At Jacobina, the Company has reduced its full year production forecast to reflect measures being implemented during Q4 2026 to address deficiencies noted during a technical inspection from Brazil's National Mining Agency, mainly related to primary ventilation redundancies and completion of secondary egress in certain areas of the mine. Mine sequencing has been modified to allow the remediation work to occur, resulting in lower-than-planned production from affected areas and substitution of lower-grade material from unaffected areas. The Company has also increased processing of stockpile inventory to partially offset the reduced mine production. The Company expects that the remediation of the deficiencies and adjustments to mine sequencing will result in processing lower grade ores for the remainder of 2026. We are evaluating the potential impact on 2027 production.

In addition, the Company continues to manage risks associated with seismicity, as previously reported; these measures require increased pillar size, resulting in decreased mining rates in some higher-grade areas, partially offset by increased production from lower-grade areas in the mine and increased development rates to open new mining zones.

As previously reported, production at El Peñon has been impacted by underperformance in certain higher-grade stopes, resulting in lower gold grades. The Company is advancing plans for infill drilling in areas scheduled for production in 2027, while continuing resource-definition drilling and evaluating additional exploration targets with potential to define high-grade mineralization.

At Shahuindo, the revision reflects a deferral of some production due to an increase in leach pad inventory and the potential impacts from managing heavier-than-normal rainfall related to a very strong El Niño weather system during Q4 2026.

Timmins production in 2026 has been impacted by a delay in accessing higher grade stopes and grade underperformance.

Gold Segment AISC is now expected to be between $2,000 to $2,150 per gold ounce in 2026 as a result of: the lower estimated production; increased development rates at Jacobina and El Peñon; higher labour and consumables costs, driven in part by currency appreciation and energy markets; and the El Niño-related weather impact on operations.

Please see Pan American's 2025 Annual MD&A, for further details on the Company's original 2026 Operating Outlook, including the original breakdown of the 2026 Operating Outlook by quarter, and the MD&A dated August 12, 2026 for revisions to the original 2026 Operating Outlook. Please also refer to the "Cautionary Note Regarding Forward-Looking Statements and Information" at the end of this news release.

| | | YTD 2026 Operating Outlook | YTD Actual | Original 2026 Operating Outlook (1) | Revised 2026 Operating Outlook (2) | | Attributable Silver Production | Moz | 18.65 - 20.15 | 18.97 | 25.00 - 27.00 | no change (3) | | Attributable Gold Production | koz | 517.5 - 554.0 | 503.1 | 700.0 - 750.0 | 660.0 - 680.0 | | Silver Segment AISC (4) | $/oz | 15.09 - 17.42 | 12.20 | 15.75 - 18.25 | no change | | Gold Segment AISC (4) | $/oz | 1,775 - 1,916 | 2,036 | 1,700 - 1,850 | 2,000 - 2,150 | | Sustaining Capital Expenditures | $M | 247 - 263 | 252 | 320 - 340 | no change |

| (1) | | The Original 2026 Operating Outlook was provided in the Company's MD&A dated February 18, 2026. The Original 2026 AISC forecasts assume average metal prices of $70.00/oz for silver, $4,200/oz for gold, $3,000/tonne ($1.36/lb) for zinc, $2,000/tonne ($0.91/lb) for lead, and $10,000/tonne ($4.54/lb) for copper; and average annual exchange rates relative to 1 USD of $18.50 for the Mexican peso ("MXN"), $3.45 for the Peruvian sol ("PEN"), $1,427 for the Argentine peso ("ARS"), $7.00 for the Bolivian boliviano ("BOB"), $1.39 for the Canadian dollar ("CAD"), $950 for the Chilean peso ("CLP") and $5.50 for the Brazilian real ("BRL"). | | (2) | | The revised 2026 AISC forecasts assume YTD 2026 realized metal prices and exchange rates, and the following metal prices for Q4 2026: $60.00/oz for silver, $4,150/oz for gold, $3,800/tonne ($1.72/lb) for zinc, $1,800/tonne ($0.82/lb) for lead, and $14,000/tonne ($6.35/lb) for copper; and average exchange rates relative to 1 USD for Q4 2026 of: $17.50 for the Mexican peso ("MXN"), $3.40 for the Peruvian sol ("PEN"), $1,579 for the Argentine peso ("ARS"), $11.30 for the Bolivian boliviano ("BOB"), $1.40 for the Canadian dollar ("CAD"), $920 for the Chilean peso ("CLP") and $5.20 for the Brazilian real ("BRL"). | | (3) | | Attributable silver production is expected to be at the low end of the Original 2026 Operating Outlook range. | | (4) | | AISC is a non-GAAP measure. Please refer to the "Alternative Performance (Non-GAAP) Measures" section of this news release for further information on this measure. |