Stillwater Critical Minerals Corp. press release
Pan American Silver Reports First Quarter 2019 Results
TSXV - TSX Venture Exchange · Nickel · Copper · Cobalt · Platinum · Palladium · Rhodium · Gold · Chromium · Ruthenium · Iridium · Osmium · Canada
Canada NewsWire
VANCOUVER, May 8, 2019
Guidance Updated to Include Mines Acquired Through Tahoe Transaction
All amounts expressed in U.S. dollars unless otherwise indicated. Unaudited tabular amounts are in thousands of U.S. dollars except number of shares and per share amounts.
VANCOUVER, May 8, 2019 /CNW/ - Pan American Silver Corp.(NASDAQ: PAAS) (TSX: PAAS) today reported unaudited results for the first quarter ended March 31, 2019 ("Q1 2019"). Pan American Silver's unaudited condensed interim consolidated financial statements and notes ("financial statements"), as well as Pan American Silver's Management's Discussion and Analysis ("MD&A") for the three months ended March 31, 2019, are available on Pan American Silver's website at panamericansilver.com and on SEDAR atwww.sedar.com.
Pan American Silver completed its previously announced acquisition of all of the issued and outstanding shares of Tahoe Resources Inc. ("Tahoe") on February 22, 2019. Pan American Silver's consolidated financial and operating results for the first quarter of 2019 reflect the contribution from the Tahoe mines (the "Acquired Mines") from February 22, 2019onwards.
Net income of $33.8 million, equivalent to $0.19basic earnings per share Adjusted income of $8.7 million, equivalent to $0.05basic adjusted income per share Revenue of $232.6 million Production on track to achieve annual guidance
"Our mines delivered solid results in the first quarter, despite soft precious metal prices, generating $61.4 millionin operating cash flow before interest, taxes and working capital changes," said Michael Steinmann, President and Chief Executive Officer. "After closing the Tahoe transaction in February, Pan American is now a larger, more diversified company with enhanced growth prospects. As we integrate these new assets into our portfolio, we are focused on capturing synergies and maintaining low-cost, efficient operations across the company."
"The La Coloradaskarn exploration program continues to return wide, high-grade intersects and we are looking forward to advancing this discovery towards releasing a first resource estimate later in the year. We also plan on commencing production from our COSE and Joaquin mines in Argentinain the second half of 2019," added Mr. Steinmann.
Consolidated Q1 2019 Highlights:
Silver production was 6.1 million ounces, which was in line with management's annual guidance. Gold production was 80.5 thousand ounces, which was an increase reflecting the 38-day contribution from the Acquired Mines since acquisition. Zinc, lead and copper production were 16.8 thousand tonnes, 6.5 thousand tonnes, and 2.0 thousand tonnes, respectively. Base metal production is on track to achieve annual 2019 production guidance. Cash Costs(1)were $1.80per ounce, reflecting the contribution of by-product gold credits from the Acquired Mines. All-in sustaining costs per ounce sold ("AISC")(1)were $10.45per ounce, including net realizable value ("NRV") inventory adjustments that increased costs by $1.33per ounce. Net cash used in operating activities of $12.9 millionreflects $33.8 millionin tax payments and a $37.9 millionuse of cash from working capital changes, mostly from closing costs related to the Tahoe acquisition. At March 31, 2019, the Company had a cash and short-term investment balance of $121.6 million, and $165.0 millionavailable under its $500.0 millionrevolving credit facility. Working capital of $771.7 millionincluded $376.4 millionof net assets relating to the Bell Creek and Timminsmines, which are being classified as discontinued operations "held-for-sale" and thus included in working capital as at March 31, 2019. Total debt was $363.1 million, reflecting $335.0 milliondrawn on the credit facility in Q1 2019 to fund, in part, the cash purchase price for the Tahoe acquisition and to repay Tahoe's revolving credit facility, under which $125.0 millionwas outstanding at the date of acquisition. Total debt also includes $28.1 millionin lease liabilities, the majority of which followed from the application of the new IFRS 16 rules. Drilling at the newly discovered skarn deposit at La Coloradacontinues to return exceptional results with wide intersects of polymetallic mineralization; further details are provided below. The shaft upgrade to 1,080 metres at the Bell Creek mine in Canadawas completed in February and is performing at full capacity with limited material being transported via the mine ramp. The Board of Directors has approved a cash dividend of $0.035per common share, or approximately $7.3 millionin aggregate cash dividends, payable on or about June 3, 2019, to holders of record of Pan American Silver's common shares as of the close on May 21, 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.
(1) New Cost Reporting Measures As a result of the Tahoe acquisition and the Company now operating three primary gold mines, we have revised reporting of Cash Costs and AISC to reflect a Silver Segment, a Gold Segment and on a Consolidated Silver Basis. Silver segment Cash Costs and AISC are calculated net of credits for realized revenues from all metals other than silver ("silver segment by-product credits"), and are calculated per ounce of silver sold. Gold segment Cash Costs and AISC are calculated net of credits for realized silver revenues ("gold segment by-product credits"), and are calculated per ounce of gold sold. Consolidated Cash Costs and AISC are based on total silver ounces sold and are net of by-product credits from all metals other than silver ("silver basis consolidated by-product credits"). Consolidated AISC includes Corporate general and administrative expense, and Exploration and project development expense. The "Cash Costs and AISC" table in this news release provides the segmented costs. For more information on these measures, please see the "Alternative Performance (non-GAAP) Measures" section of the MD&A for the period ended March 31, 2019.
Cash Costs, AISC, adjusted earnings, basic adjusted earnings per share, working capital and total debt 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.
La Coloradaexploration drilling Exploration of the skarn mineralization at La Coloradacontinues at depth with over 7,200 metres drilled in Q1 2019. Hole U-26-19 drilled on the same section as drill hole U-68-18 (reported in Pan American Silver's news release dated February 20, 2019, with 308 metres of polymetallic mineralization) shows multiple thick widths of mineralized skarn over 270 metres wide. Pan American Silver's understanding of this large mineralized system continues to evolve, as the Company works toward developing a first resource estimate late in 2019.
Recent drill highlights include:
U-86-18:24.5 mat 37 g/t Ag, 0.28% Cu, 1.95% Pb, 4.27% Zn; and8.7 mat 25 g/t Ag, 0.08% Cu, 3.41% Pb, 4.97% Zn U-08-19:61.1 mat 80 g/t Ag, 0.23% Cu, 0.41% Pb, 3.27% Zn U-12-19:22.1 mat 131 g/t Ag, 0.43% Cu, 0.59% Pb, 3.24% Zn U-22-19:129.2 mat 45 g/t Ag, 0.10% Cu, 1.09% Pb, 4.02% Zn; including84.5 mat 63 g/t Ag, 0.13% Cu, 1.27% Pb, 5.18% Zn U-26-19:276.1 mat 34 g/t Ag, 0.18% Cu, 1.69% Pb, 3.76% Zn; including 47 mat 31 g/t Ag, 0.17% Cu, 2.49% Pb, 4.40% Zn; including151.9 mat 38 g/t Ag, 0.20% Cu, 1.73% Pb, 4.22% Zn; including33.2 m@ 53 g/t Ag, 0.26% Cu, 2.32% Pb, 5.23% Zn
A summary of the drill results from the recently completed 7,200 metres of drilling is provided at the end of this new release. Results from hole U-22-19 are incomplete, as drilling continues on this hole.
CONSOLIDATED FINANCIAL RESULTS
| | March 31, 2019 | December 31, 2018 | | Weighted average shares during period (millions) Basic | 176.5 | 153.3 | | Shares outstanding end of period (millions) | 209.4 | 153.4 | | | | | | | Three months ended March 31, | | | | 2019 | 2018 | | | | | | Revenue | $232,643 | $206,961 | | Mine operating earnings | $17,194 | $55,124 | | Net earnings | $33,812 | $48,156 | | Basic earnings per share (1) | $0.19 | $0.31 | | Adjusted earnings (2) | $8,705 | $30,702 | | Basic earnings per share (1) | $0.05 | $0.20 | | Net cash (used in) generated from operating activities | $(12,911) | $34,400 | | Net cash generated from operating activities before changes in working capital (2) | $25,025 | $45,720 | | Sustaining capital expenditures | $34,742 | $23,903 | | Project capital expenditures | $9,874 | $10,078 | | Cash dividend per share | $0.035 | $0.035 | | Average realized prices | | | | Silver ($/ounce) (3) | 15.52 | 16.78 | | Gold ($/ounce) (3) | 1,300 | 1,333 | | Zinc ($/tonne) (3) | 2,750 | 3,468 | | Lead ($/tonne) (3) | 2,039 | 2,458 | | Copper ($/tonne) (3) | 6,207 | 6,993 |
| | | | (1) | Per share amounts are based on basic weighted average common shares | | (2) | Non- GAAP measures: adjusted earnings, basic adjusted earnings per share, net cash generated from operating activities before changes in working capital are non-GAAP financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures | | (3) | Metal prices stated are inclusive of final settlement adjustments on concentrate sales |
OPERATING PERFORMANCE
Silver and Gold Production The following table provides silver and gold production at each of Pan American Silver's operations for the three month periods ended March 31, 2019and 2018, except for the Acquired Mines, which only include production from February 22, 2019to March 31, 2019:
| | Silver Production
(ounces '000s) | Gold Production (ounces '000s) | | | | | Three months ended March 31, | Three months ended March 31, | | | | | 2019 | 2018 | 2019 | 2018 | | Silver Segment: | | | | | | La Colorada | 1,990 | 1,650 | 1.0 | 1.0 | | Dolores | 1,112 | 1,202 | 30.0 | 34.3 | | Huaron | 937 | 930 | 0.2 | 0.2 | | Morococha(1) | 697 | 731 | 0.6 | 0.8 | | San Vicente(2) | 851 | 764 | 0.1 | 0.1 | | Manantial Espejo/COSE/Joaquin | 524 | 825 | 4.9 | 9.7 | | Gold Segment: | | | | | | La Arena(3) | 3 | | 14.7 | | | Shahuindo(3) | 10 | | 14.5 | | | Assets held for sale: | | | | | | Timmins (3) | 2 | | 14.4 | | | Total (4) | 6,125 | 6,102 | 80.5 | 46.2 |
| | | | (1) | Morococha data represents Pan American Silver's 92.3% interest in the mine's production | | (2) | San Vicente data represents Pan American Silver's 95.0% interest in the mine's production | | (3) | Reflects production results subsequent to the February 22, 2019 closing date of the Acquisition to March 31, 2019. Please refer to the "Acquisition of Tahoe" section of the MD&A for the period ended March 31, 2019 for more information. The Bell Creek and Timmins mines (together, "Timmins") are classified as assets-held-for sale in the Company's Q1 2019 Financial Statements, as described in Note 4 of the Company's Q1 2019 Financial Statements and in the "Acquisition of Tahoe" section of the MD&A for the period ended March 31, 2019 | | (4) | Totals may not add due to rounding |
Base Metal Production
| | Three months ended March 31, | | | | 2019 | 2018 | | Zinc - kt | 16.8 | 14.7 | | Lead - kt | 6.5 | 5.2 | | Copper - kt | 2.0 | 3.0 |
Cash Costs and AISC The following table reflects the Cash Costs and AISC net of by-product credits at each of Pan American Silver's operations for the three months ended March 31, 2019, as compared to the same periods in 2018 for the Silver Segment mines and 38 days (February 22, 2019through March 31, 2019) for the newly acquired Gold Segment mines:
| | Cash Costs(1) ($ per ounce) | AISC(1) ($ per ounce) | | | | Three months ended March 31, | Three months ended March 31, | | | | | 2019 | 2018(2) | 2019 | 2018(3) | | | La Colorada | 2.16 | (0.11) | 3.37 | 1.87 | | Dolores | 3.34 | (2.14) | 26.45 | 10.02 | | Huaron | 4.38 | (1.07) | 8.54 | 2.95 | | Morococha | (1.01) | (10.18) | 2.20 | (6.89) | | San Vicente | 10.25 | 9.48 | 11.20 | 11.43 | | Manantial Espejo/COSE/Joaquin | 27.53 | 17.14 | 27.94 | 11.43 | | Silver Segment Consolidated | 5.46 | 1.47 | 10.83 | 5.19 | | Shahuindo | 616 | — | 657 | — | | La Arena | 642 | — | 1,263 | — | | Timmins(4) | 976 | — | 1,116 | — | | Gold Segment Consolidated | 768 | — | 1,082 | — | | Consolidated metrics per silver ounce sold(5): | | | | | | All Operations | 1.80 | 1.47 | 10.45 | 6.55 | | All Operations before NRV inventory adjustments | 1.80 | 1.47 | 9.12 | 7.48 |
| | | | (1) | Cash Costs and AISC are non-GAAP measures. Please refer to the section "Alternative Performance (Non-GAAP) Measures" of the MD&A for the period ended March 31, 2019 for a detailed description of these measures and where appropriate a reconciliation of the measures to the Q1 2019 Financial Statements. G&A costs are included in the consolidated AISC, but are not allocated in calculating AISC for each operation | | (2) | Silver Segment Cash Costs per ounce sold are calculated based on Cash Costs, net of by-product credits divided by per ounce of silver sold and they are therefore different from previously reported Q1 2018 "Cash Costs", which were calculated based on cash costs net of by-product credits divided by payable silver ounces produced. The Q1 2018 cash costs per ounce sold included in the table above have been calculated and presented as comparative amounts to conform to the methodology used by the Company to calculate the Q1 2019 Cash Costs per ounce sold | | (3) | 2018 AISC per ounce sold in the table above have been calculated and presented as comparative amounts to conform to the methodology used by the Company to calculate the 2019 AISC per ounce sold. The change in methodology relates to the sustaining capital calculation to account for the adoption of IFRS 16, with sustaining capital now including lease payments. Previously, leased assets were included as sustaining capital in the period of acquisition, while future related lease payments were excluded | | (4) | The Bell Creek and Timmins mines (together, "Timmins") are classified as assets-held-for sale in the Company's Q1 2019 Financial Statements, as described in the "Acquisition of Tahoe" section of the MD&A for the period ended March 31, 2019 | | (5) | Consolidated silver basis total is calculated per silver ounce sold with gold revenues included within by-product credits |
2019 GUIDANCE The following table provides our guidance for 2019, which has been updated to include certain forecast amounts for the Acquired Mines from February 22, 2019to December 31, 2019. The production in 2019 reflects a full year of production for the Silver Segment mines and from February 22, 2019to December 31, 2019for the Gold Segment mines. These estimates are forward-looking statements and information that are subject to the cautionary note associated with forward-looking statements and information at the end of this news release.
| | Silver Production
(million ounces) | Gold Production (thousand ounces) | Cash Costs
($ per ounce)(1) | AISC ($ per ounce)(1) | | Silver Segment | | | | | | La Colorada | 8.0 - 8.2 | 4.1 - 4.8 | 2.50 - 3.50 | 3.50 - 4.50 | | Dolores | 5.2 - 5.5 | 114.5 - 120.0 | 4.50 - 5.50 | 14.00 - 16.00 | | Huaron | 3.6 - 3.7 | 0.5 | 6.00 - 7.00 | 7.50 - 9.25 | | Morococha (92.3%)(2) | 2.8 - 2.9 | 1.2 - 1.5 | 3.10 - 4.00 | 7.00 - 9.00 | | San Vicente (95.0%)(3) | 3.5 - 3.7 | 0.3 | 10.60 - 11.50 | 12.25 - 13.50 | | Manantial Espejo/COSE/Joaquin | 3.4 - 3.6 | 42.0 - 45.0 | 17.00 - 18.50 | 17.75 - 19.50 | | Total(4) | 26.5 - 27.5 | 162.5 - 172.5 | 6.50 - 7.50 | 9.75 - 11.25 | | Gold Segment: | | | | | | Shahuindo | 0.1 | 135.0 - 165.0 | 550 - 625 | 875 - 1,000 | | La Arena | — | 117.5 - 122.5 | 800 - 850 | 1,275 - 1,325 | | Timmins(5) | — | 155.0 - 160.0 | 890 - 940 | 1,025 - 1,075 | | Total(4) | 0.1 | 407.5 - 447.5 | 740 - 810 | 1,025 - 1,125 | | Total Production(6) | 26.6 - 27.6 | 570.0 - 620.0 | — | — | | Consolidated Silver Basis | — | — | (2.25) - 0.50 | 7.75 - 10.75 |
| | | | (1) | Cash Costs and AISC are non-GAAP measures. Please refer to the section "Alternative Performance (Non-GAAP) Measures" of the MD&A for the period ended March 31, 2019, for a detailed description of these measures and where appropriate a reconciliation of the measure to the Q1 2019 Financial Statements. The Cash Costs and AISC forecasts assume metal prices of $14.50/oz for silver, $2,600/tonne ($1.18/lb) for zinc, $1,950/tonne ($0.88/lb) for lead, $6,150/tonne ($2.79/lb) for copper, and $1,250/oz for gold; and average annual exchange rates relative to 1 USD of 19.50 for the Mexican peso ("MXN"), 3.33 of the Peruvian sol ("PEN"), 41.80 for the Argentine peso ("ARS"), 6.91 for the Bolivian boliviano ("BOL"), and $1.30 for the Canadian dollar ("CAD") | | (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 | | (4) | As shown in the detailed quantification of consolidated AISC, included in the "Alternative Performance (Non-GAAP) Measures" section of the MD&A for the period ended March 31, 2019, Corporate general and administrative expense, and Exploration and project development expense are included in Consolidated (silver basis) AISC, though are not allocated amongst the operations and thus are not included in either the silver or gold segment totals | | (5) | The Bell Creek and Timmins mines (together, "Timmins") are classified as assets held for sale in the Company's Q1 2019 Financial Statements, as described in the Note 4 of the Company's Q1 2019 Financial Statements, and in the "Acquisition of Tahoe" section of the MD&A for the period ended March 31, 2019. The gold production from the Timmins operations is included in the consolidated guidance, pending resolution from the sale process | | (6) | Totals may not add due to rounding |
Updated 2019 Capital Expenditure Guidance The following table summarizes the Q1 2019 capital expenditures and updated 2019 guidance, which includes the Acquired Mines.
| (in millions of USD) | Q1 2019 Actual | Updated 2019 Guidance | | La Colorada | 2.2 | 6.5 - 7.0 | | Dolores | 13.1 | 53.0 - 54.0 | | Huaron | 3.2 | 6.5 - 7.5 | | Morococha | 1.9 | 11.0 - 12.0 | | San Vicente | 1.0 | 6.5 - 7.5 | | Manantial Espejo | 0.7 | 1.5 - 2.0 | | Shahuindo | 0.2 | 47.5 - 49.0 | | La Arena | 10.5 | 54.0 - 56.0 | | Timmins(1) | 1.9 | 16.5 - 18.0 | | Sustaining Capital Sub-total(1) | 34.7 | 203.0 - 213.0 | | Morococha projects | 0.1 | 2.5 | | Mexico projects | 2.0 | 7.5 | | Joaquin and COSE projects | 5.9 | 20.0 | | Acquired Mines projects(1) | 1.9 | 10.0 | | Project Capital Sub-total(1) | 9.9 | 40.0 | | Total Capital | 44.6 | 243.0 - 253.0 |
| | | | (1) | The Timmins mines are classified as assets-held-for sale in the Company's Q1 2019 Financial Statements, as described in Note 4 of the Company's Q1 2019 Financial Statements, and in the "Acquisition of Tahoe" section of the MD&A for the period ended March 31, 2019. The capital expenditures for the Timmins' operations are included in the consolidated guidance pending resolution from the sale process |
La Colorada Drill Results A summary of results from the recently completed 7,200 metres of drilling at La Coloradais provided in the following table(1)(2):
| | | | | | | | | | Drill hole ID | From (m) | To (m) | Interval (m) | Ag g/t | Cu% | Pb% | Zn% | | U-86-18 | 57.6 | 57.7 | 0.2 | 46,654 | 0.49 | 1.82 | 1.62 | | and | 160.7 | 161.6 | 0.9 | 944 | 0.56 | 2.36 | 3.73 | | and | 273.9 | 289.4 | 15.5 | 19 | 0.10 | 1.74 | 4.32 | | and | 323.3 | 347.8 | 24.5 | 37 | 0.28 | 1.95 | 4.27 | | and | 451.9 | 554.1 | 102.2 | 20 | 0.09 | 1.70 | 2.91 | | incl | 451.9 | 506.9 | 55.0 | 16 | 0.04 | 1.71 | 3.16 | | incl | 530.1 | 547.5 | 17.4 | 30 | 0.04 | 2.62 | 3.90 | | and | 661.8 | 670.5 | 8.7 | 25 | 0.08 | 3.41 | 4.97 | | U-01-19 | 90.1 | 94.4 | 4.4 | 297 | 0.19 | 1.15 | 2.44 | | and | 409.7 | 414.3 | 4.6 | 121 | 0.04 | 5.38 | 4.57 | | and | 630.4 | 634.1 | 3.7 | 149 | 0.24 | 0.60 | 0.47 | | U-10-19 | 706.0 | 708.6 | 2.5 | 37 | 0.22 | 0.79 | 11.35 | | and | 743.8 | 748.2 | 4.5 | 39 | 0.15 | 0.86 | 5.83 | | and | 762.7 | 766.7 | 4.1 | 64 | 0.07 | 0.48 | 4.40 | | U-08-19 | 230.7 | 245.3 | 14.6 | 51 | 0.25 | 2.88 | 5.97 | | and | 472.1 | 474.7 | 2.6 | 824 | 0.06 | 10.91 | 11.87 | | and | 551.8 | 567.9 | 16.1 | 44 | 0.11 | 4.22 | 8.03 | | and | 616.9 | 657.7 | 40.8 | 37 | 0.12 | 0.83 | 3.44 | | and | 677.1 | 738.2 | 61.1 | 80 | 0.23 | 0.41 | 3.27 | | and | 771.4 | 784.5 | 13.1 | 42 | 0.21 | 0.14 | 4.06 | | and | 793.5 | 895.7 | 102.2 | 15 | 0.16 | 0.34 | 3.14 | | incl | 793.5 | 815.3 | 21.8 | 21 | 0.12 | 1.56 | 4.99 | | U-12-19 | 110.9 | 140.4 | 29.5 | 47 | 0.28 | 1.46 | 3.11 | | and | 657.7 | 669.4 | 11.7 | 98 | 0.22 | 1.47 | 5.72 | | and | 718.1 | 800.8 | 82.7 | 61 | 0.25 | 0.56 | 2.34 | | incl | 718.1 | 740.2 | 22.1 | 131 | 0.43 | 0.59 | 3.24 | | incl | 769.6 | 795.1 | 25.5 | 61 | 0.24 | 0.92 | 4.11 | | and | 884.8 | 887.6 | 2.8 | 753 | 1.03 | 4.82 | 6.48 | | U-22-19 | 41.8 | 60.6 | 18.8 | 93 | 0.24 | 5.43 | 4.99 | | and | 106.7 | 121.9 | 15.2 | 87 | 0.20 | 2.02 | 6.13 | | and | 648.7 | 777.9 | 129.2 | 45 | 0.10 | 1.09 | 4.02 | | incl | 693.4 | 777.9 | 84.5 | 63 | 0.13 | 1.27 | 5.18 | | U-26-19 | 441.0 | 475.8 | 34.8 | 20 | 0.06 | 1.71 | 3.02 | | and | 482.7 | 501.4 | 18.8 | 21 | 0.09 | 1.74 | 2.93 | | and | 536.3 | 812.3 | 276.1 | 34 | 0.18 | 1.69 | 3.76 | | incl | 536.3 | 583.2 | 47.0 | 31 | 0.17 | 2.49 | 4.40 | | incl | 593.0 | 744.9 | 151.9 | 38 | 0.20 | 1.73 | 4.22 | | incl | 779.2 | 812.3 | 33.2 | 53 | 0.26 | 2.32 | 5.23 |