Stillwater Critical Minerals Corp. press release

Pan American Silver Reports Unaudited 2018 Annual and Fourth Quarter Results

2019-02-20

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Canada NewsWire

VANCOUVER, Feb. 20, 2019

All financial figures are in U.S. dollars unless otherwise indicated.

VANCOUVER, Feb. 20, 2019/CNW/ -Pan American Silver Corp.(NASDAQ: PAAS) (TSX: PAAS) today reported unaudited financial results for the year-ended December 31, 2018 ("YE 2018") and the fourth quarter ("Q4 2018"). These results are preliminary and could change based on final audited results. Preliminary operating results were previously reported on January 21, 2019.

Annual revenue totaled $784.5 million, and net cash generated from operating activities was $155.0 million. Annual net earnings of $12.0 million($0.07basic earnings per share), and adjusted annual earnings of $59.4 million($0.39basic adjusted earnings per share). Annual silver production totaled 24.8 million ounces with all-in sustaining costs per silver ounce sold ("AISCSOS") of $10.73, or $9.68excluding net realizable value ("NRV") inventory adjustments. Cash costs per payable ounce of silver, net of by-product credits ("cash costs") of $3.35per ounce in 2018. Advanced the COSE and Joaquin mine developments for initial production in 2019. At December 31, 2018, the Company had cash and short-term investment balances of $212.5 millionand working capital of $397.8 million. Year-end debt of $6.7 millionrelated entirely to lease liabilities.

"Pan American's operations demonstrated solid performance in 2018, highlighted by the lowest cash costs on record since 2006. This performance resulted in strong cash flow generation and a healthy financial position at year end," said Michael Steinmann, President and Chief Executive Officer of the Company. "Importantly, we advanced our strategy of developing new catalysts to generate value for shareholders. Our acquisition of Tahoe Resources will result in a more diversified Pan American with a strong portfolio of cash-generating assets and superior growth opportunities. In addition, our major exploration discovery at La Coloradademonstrates a significant opportunity for long-term organic growth."

Consolidated Q4 2018 Highlights:

Revenue in Q4 2018 was $173.4 million, reflecting lower prices for all metals and lower quantities of silver, gold, and copper sold due to a build in inventories at San Vicenteand La Colorada(approximate revenue impact of $8.4 million), as well as lower production at Dolores. Net cash generated from operating activities was $11.9 million. Net loss was $63.6 million($0.42basic loss per share), which included a $27.8 millionimpairment charge related to the Manantial Espejo/COSE/Joaquin assets, a $13.3 millionreduction from NRV inventory adjustments, $10.2 millionin costs related to the Tahoe Resources Inc. ("Tahoe") transaction, $8.2 millionin tax expense from changes in foreign exchange rates, and a $4.7 millioncredit loss related to a third party refinery. The impairment of the Manantial Espejo/COSE/Joaquin assets reflects the impact of the new export tax introduced in Argentinain late 2018, and the decline in short-term consensus metal prices. Adjusted loss was $2.0 million($0.01basic adjusted loss per share). Silver production was 6.1 million ounces at cash costs of $6.12per ounce. Q4 2018 cash costs were impacted by lower by-product metal prices and reduced gold production. AISCSOS were $15.86in Q4 2018, or $13.36excluding NRV inventory adjustments. AISCSOS were impacted by less silver ounces sold, lower by-product metal prices and higher sustaining capital expenditures. The Board of Directors has approved a cash dividend of $0.035per common share, or approximately $5.4 millionin aggregate cash dividends, payable on or about March 15, 2019, to holders of record of Pan American Silver's common shares as of the close on March 4, 2019. Pan American Silver's dividends are designated as eligible dividends for the purposes of the Income Tax Act (Canada). As is standard practice, the amounts and specific distribution dates of any future dividends will be evaluated and determined by the Board of Directors on an ongoing basis.

The foregoing contains measures that are not generally accepted accounting principle ("non-GAAP") financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures.

Amended and Restated Credit Agreement

On February 1, 2019, the Company entered into an Amending and Restating Credit Agreement with a syndicate of banks to extend and increase its existing credit facility. In conjunction with the closing of the Tahoe transaction, the credit facility is expected to increase to $500 millionand would mature on February 1, 2023.

Tahoe transaction

All required regulatory, shareholder and court approvals have been received for the plan of arrangement (the "Arrangement"), whereby Pan American will acquire all of the outstanding shares of Tahoe. The Arrangement is anticipated to be completed on or about February 22, 2019.

Pan American receives award for social and environmental responsibility

Pan American is pleased to announce that Matt Andrews, Vice President Environment and Sustainability, and Monica Moretto, Director Sustainability, are the 2018 recipients of the Robert R. HedleyAward for Excellence in Social and Environmental Responsibility from the Association for Mineral Exploration (AME). In the AME's news release, dated December 6, 2018, announcing the 2018 winners, the organization states that Mr. Andrews' and Ms. Moretto's leadership "has created an environment within Pan American Silver Corp. of respect for social and environmental principles on all its projects".

CONSOLIDATED RESULTS

| | | | December 31,

2018 | | December 31,

2017 | | | | | | | | | | Shares outstanding (millions) | | | 153,448 | | 153,303 | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended

December 31, | Year ended

December 31, | | | | | | | | | | | | | | 2018 | 2017 | 2018 | 2017 | | | | | | | | | | | FINANCIAL | | | | | | | | | | | | | | | Revenue | $ | 173,357 | | $ | 226,031 | | $ | 784,495 | | $ | 816,828 | | | | Mine operating (loss) earnings | $ | (4,666) | | $ | 43,285 | | $ | 100,897 | | $ | 168,760 | | | | Net (loss) earnings | $ | (63,577) | | $ | 49,664 | | $ | 12,041 | | $ | 123,451 | | | | | Per share (1) | $ | (0.42) | | $ | 0.32 | | $ | 0.07 | | $ | 0.79 | | | Adjusted (loss) earnings (2) | $ | (2,022) | | $ | 19,219 | | $ | 59,434 | | $ | 77,705 | | | | | Per share (1) | $ | (0.01) | | $ | 0.13 | | $ | 0.39 | | $ | 0.51 | | | Net cash generated from operating activities | $ | 11,930 | | $ | 79,291 | | $ | 154,978 | | $ | 224,559 | | | | Net cash generated from operating activities before changes in working capital (2) | $ | 16,827 | | $ | 64,098 | | $ | 159,239 | | $ | 212,850 | | | | Sustaining capital expenditures | $ | 31,329 | | $ | 28,668 | | $ | 105,229 | | $ | 84,420 | | | | Project capital expenditures | $ | 11,849 | | $ | 13,650 | | $ | 41,292 | | $ | 61,429 | | | | Dividend per share | $ | 0.035 | | $ | 0.025 | | $ | 0.14 | | $ | 0.10 | | | | OPERATIONAL | | | | | | | | | | | | | | | Production | | | | | | | | | | | | | | | | Silver (thousand ounces) | 6,128 | | 6,579 | | 24,776 | | 24,979 | | | | | | | | Gold (thousand ounces) | 37.2 | | 43.7 | | 178.9 | | 160.0 | | | | | | | | Zinc (thousand tonnes) | 18.5 | | 14.7 | | 64.8 | | 55.3 | | | | | | | | Lead (thousand tonnes) | 6.3 | | 5.4 | | 22.4 | | 21.5 | | | | | | | | Copper (thousand tonnes) | 2.2 | | 3.0 | | 9.8 | | 13.4 | | | | | | | Average realized prices | | | | | | | | | | | | | | | | Silver ($/ounce) | $ | 14.35 | | $ | 16.65 | | $ | 15.61 | | $ | 16.99 | | | | Gold ($/ounce) | $ | 1,232 | | $ | 1,276 | | $ | 1,272 | | $ | 1,257 | | | | Zinc ($/tonne) | $ | 2,508 | | $ | 3,282 | | $ | 2,846 | | $ | 2,929 | | | | Lead ($/tonne) | $ | 1,914 | | $ | 2,472 | | $ | 2,189 | | $ | 2,351 | | | | Copper ($/tonne) | $ | 6,098 | | $ | 6,811 | | $ | 6,519 | | $ | 6,174 | | | Cash costs (per payable ounce of silver, net of by-product credits)(2) | $ | 6.12 | | $ | 3.18 | | $ | 3.35 | | $ | 4.55 | | | | All-in sustaining costs per silver ounce sold(2) | $ | 15.86 | | $ | 10.86 | | $ | 10.73 | | $ | 10.79 | | | | All-in sustaining costs per silver ounce sold, excluding NRV inventory adjustments(2) | $ | 13.36 | | $ | 10.03 | | $ | 9.68 | | $ | 10.28 | | |

| (1) | Per share amounts are based on basic weighted average common shares. | | (2) | Non-GAAP measures: adjusted (loss) earnings, basic adjusted (loss) earnings per share, net cash generated from operating activities before changes in working capital, cash costs, and all-in sustaining costs per silver ounce sold (inclusive and exclusive of NRV inventory adjustments) are not generally accepted accounting principle ("non-GAAP") financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures. |

MINE OPERATING RESULTS

| | Three Months Ended

December 31, 2018 | | Three Months Ended

December 31, 2017 | | | | | | | | | | | Production | Cash Costs(1) | | Production | Cash Costs(1) | | | | | | | | | Ag (Moz) | | Au (koz) | | | Ag (Moz) | | Au (koz) | | | | | La Colorada | 2.1 | | 1.2 | | $1.73 | | 1.9 | | 1.3 | | $0.43 | | Dolores | 0.8 | | 29.4 | | $7.06 | | 1.3 | | 31.2 | | ($3.93) | | Alamo Dorado | — | | — | | NA | | — | | 0.1 | | $2.09 | | Huaron | 1.0 | | 0.2 | | $2.82 | | 1.0 | | 0.2 | | $2.08 | | Morococha (2) | 0.7 | | 0.2 | | $0.61 | | 0.7 | | 0.8 | | ($7.42) | | San Vicente (3) | 0.9 | | 0.1 | | $9.23 | | 1.1 | | 0.1 | | $9.04 | | Manantial Espejo | 0.6 | | 6.2 | | $25.53 | | 0.6 | | 10.0 | | $26.52 | | TOTAL | 6.1 | | 37.2 | | $6.12 | | 6.6 | | 43.7 | | $3.18 |

| | Year Ended

December 31, 2018 | | Year Ended

December 31, 2017 | | | | | | | | | | | Production | Cash Costs(1) | | Production | Cash Costs(1) | | | | | | | | | Ag (Moz) | | Au (koz) | | | Ag (Moz) | | Au (koz) | | | | | La Colorada | 7.6 | | 4.4 | | $2.02 | | 7.1 | | 4.3 | | $2.08 | | Dolores | 4.1 | | 136.6 | | ($1.87) | | 4.2 | | 103.0 | | ($1.65) | | Alamo Dorado | — | | — | | NA | | 0.6 | | 2.1 | | $16.49 | | Huaron | 3.6 | | 0.8 | | $1.63 | | 3.7 | | 1.1 | | $1.35 | | Morococha(2) | 2.9 | | 2.1 | | ($4.34) | | 2.6 | | 3.5 | | ($5.34) | | San Vicente(3) | 3.5 | | 0.5 | | $10.12 | | 3.6 | | 0.5 | | $11.85 | | Manantial Espejo | 3.1 | | 34.6 | | $13.91 | | 3.1 | | 45.3 | | $18.25 | | TOTAL | 24.8 | | 178.9 | | $3.35 | | 25.0 | | 160.0 | | $4.55 |

| Totals may not add up due to rounding. |

| (1) | Cash costs 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. | | (2) | Morococha data represents Pan American Silver's 92.3% interest in the mine's production. | | (3) | San Vicente data represents Pan American Silver's 95.0% interest in the mine's production. |

CAPITAL EXPENDITURES(1)

| | Annual

Forecast(2) | Year ended

December 31, | | | | | | (in millions of USD) | 2018 | | 2018 | | 2017 | | | La Colorada | 17.5 – 18.5 | | 16.9 | | 13.3 | | | Dolores | 42.0 – 44.0 | | 48.5 | | 38.4 | | | Huaron | 17.0 – 17.5 | | 15.9 | | 8.8 | | | Morococha | 14.5 – 15.0 | | 14.1 | | 12.5 | | | San Vicente | 6.5 – 7.0 | | 7.0 | | 8.1 | | | Manantial Espejo | 2.5 – 3.0 | | 2.8 | | 3.3 | | | Sustaining Capital Total(1) | 100.0 - 105.0 | | 105.2 | | 84.4 | | | Mexico project capital | 15.5 | | 15.9 | | 56.8 | | | Joaquin and COSE projects(3) | 24.5 | | 25.4 | | 4.7 | | | Project Capital Total(1) | 40.0 | | 41.3 | | 61.5 | | | Consolidated Total | 140.0 – 145.0 | | 146.5 | | 145.9 | |

| (1) | The total sustaining capital amounts capitalized in 2018 were $0.8 million less than the $106.0 million of 2018 sustaining capital cash outflows. Project capital amounts capitalized in 2018 were $3.4 million less than the $44.7 million of 2018 project capital cash outflows. The sustaining capital cash outflows are included in the 2018 AISCSOS calculation, shown in the "Alternative Performance (non-GAAP) Measures" section of this news release, and in the tables included for the individual mines in the "Mine Operating Results" section of this news release; these amounts are different than the amounts capitalized in the period, which are provided in the table above. These differences are due to the timing difference between the cash payment of capital investments compared with the period in which investments are capitalized. | | (2) | Forecast amount per Q3 2018 MD&A dated November 6, 2018. | | (3) | Total expenditures of $9.7 million were incurred in 2017 for the Joaquin and COSE projects, of which $5.0 million was expensed as part of 2017 exploration and project development expenses, and the remaining $4.7 million was capitalized. All Joaquin and COSE project expenditures were capitalized in 2018. |

Sustaining capital of $105.2 millionin 2018 was slightly above our forecast range of $100to $105 million, reflecting higher pre-stripping and leach pad expansionary activities at Dolores, largely offset with savings on the tailings storage facility expansion at Huaron and deferral of certain exploration spending, infrastructure upgrades and equipment procurements.

Project capital of $41.3 million, compared with a forecast of $40 million, was directed at the COSE and Joaquin mine developments in Argentina, as well as investments at Doloresand La Colorada.

2019 GUIDANCE

There are no revisions to the guidance for 2019 that Pan American provided in its news release dated January 21, 2019, as provided in the table below. The guidance does not include the assets to be acquired under the Arrangement with Tahoe. Management intends to update the guidance to include these assets and allocation of new general and administrative costs in the second quarter of 2019. We may also revise guidance during the year to reflect actual results to date and those anticipated for the remainder of the year.

| | 2019 Guidance | | | Production | | | | Silver (million ounces) | 26.5 - 27.5 | | | Gold (thousand ounces) | 162.5 - 172.5 | | | Zinc (thousand tonnes) | 65.0 - 67.0 | | | Lead (thousand tonnes) | 24.0 - 25.0 | | | Copper (thousand tonnes) | 9.8 - 10.3 | | | Cash Costs(1)($/ounce) | 6.50 - 7.50 | | | AISCSOS(1) ($) | 10.80 - 12.30 | | | Sustaining capital ($millions) | 85 - 90 | | | Project capital ($millions) | 30 | | | | | | | Assumptions used to forecast total cash costs and AISCSOS for 2019 | | | | Metal prices | | | | Silver ($/ounce) | 14.50 | | | Gold ($/ounce) | 1,250 | | | Zinc ($/tonne) | 2,600 | | | Lead ($/tonne) | 1,950 | | | Copper ($/tonne) | 6,150 | | | Average annual exchange rates relative to 1.00 U.S. dollar | | | | Mexican peso | 19.50 | | | Peruvian sol | 3.33 | | | Argentine peso | 41.80 | | | Bolivian boliviano | 6.91 | |

| (1) | Cash Costs and AISCSOS are non-GAAP measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures. |

Additional details on the Company's 2019 guidance can be found in the January 21, 2019 news release entitled, "Pan American Silver Announces Preliminary 2018 Operating Results and Guidance for 2019" available atwww.panamericansilver.comand as filed on SEDAR atwww.sedar.com.

Fourth Quarter and Year End 2018 Unaudited Results Conference Call and Webcast

Callers should dial in 5 to 10 minutes prior to the scheduled start time. The live webcast and presentation slides will be available on the Company's website at www.panamericansilver.com. An archive of the webcast will also be available for three months.

Corporate Office:

625 Howe Street, Suite 1440 Vancouver, British Columbia V6C 2T6 Canada

Tel: +1 604 684-1175 Fax: +1 604 684-0147

About Pan American Silver

Pan American Silver Corp. is the world's second largest primary silver producer, providing enhanced exposure to silver through a diversified portfolio of assets, large reserves and growing production. We own and operate six mines in Mexico, Peru, Argentinaand Bolivia. Pan American Silver maintains a strong balance sheet, has an established management team with proven operating expertise, and is committed to responsible development. Founded in 1994, the Company is headquartered in Vancouver, B.C.and our shares trade on NASDAQ and the Toronto Stock Exchange under the symbol "PAAS".

For more information, visit: www.panamericansilver.com.

Alternative Performance (Non-GAAP) Measures

In this news release we refer to measures that are not generally accepted accounting principle ("non-GAAP") financial measures. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning as prescribed by IFRS as an indicator of performance, and may differ from methods used by other companies with similar descriptions. These non-GAAP financial measures include:

Cash costs per payable ounce of silver, net of by-product credits ("cash costs"). 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. Investors are cautioned that cash costs 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. Adjusted earnings (loss) and adjusted earnings (loss) per share. The Company believes that these measures better reflect normalized earnings as they eliminate items that in management's judgment are subject to volatility as a result of factors which are unrelated to operations in the period, and/or relate to items that will settle in future periods. All-in sustaining costs per silver ounce sold ("AISCSOS"). The Company has adopted AISCSOS as a measure of its consolidated operating performance and its ability to generate cash from all operations collectively, and the Company believes it is a more comprehensive measure of the cost of operating our consolidated business than traditional cash costs per payable 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. Net cash generated from operating activities before changes in working capital is calculated as "Net cash generated from operating activities" less "Changes in non-cash operating working capital", as shown on the Consolidated Statements of Cash Flows. The Company believes the exclusion of changes in non-cash operating working capital better reflects the cash from operating activities generated in the period. Net cash generated from operating activities before changes in working capital does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies.

Readers should refer to the "Alternative Performance (non-GAAP) Measures" section following the Consolidated Statements of Cash Flows included in this news release for a more detailed discussion of these and other non-GAAP measures and their calculation.

Technical information contained in this news release with respect to Pan American has been reviewed and approved by Martin Wafforn, P.Eng., Senior Vice President, Technical Services & Process Optimization, who is the Company's Qualified Person for the purposes of National Instrument 43-101. For additional information about the Company's material mineral properties, other than the Joaquin property, please refer to the Company's Annual Information Form dated March 22, 2018, filed at www.sedar.com. Mineral resources that are not mineral reserves have no demonstrated economic viability.