PP PAN AMERICAN SILVER POSTS RECORD
FINANCIAL RESULTS FOR 2011
The Company
Produced 21.9 Million Ounces of Silver and 78,426 Ounces of Gold in
2011
(All amounts
in US dollars unless otherwise stated and all production figures are
approximate)
Vancouver, B.C. � February 23, 2012 � Pan American
Silver Corp.(NASDAQ: PAAS; TSX: PAA) (the �Company�, or �Pan
American�), today reported strong financial results for the fourth
quarter of 2011 and new all-time Company records for sales, net income,
mine operating earnings and cash flow from operations for the fiscal
year ended December 31, 2011. In addition, the Company provided
an update on its operations, a forecast for consolidated production and
cash costs for 2012, as well as further information with respect to
Management�s expectations for the completion of the proposed
acquisition of Minefinders Corporation Ltd.
("Minefinders").
(1)Financial information in this news
release is based on International Financial Reporting Standards
(�IFRS�); results are unaudited; percentages compare period-on-period.
(2) Cash costs per payable ounce of silver is a non-GAAP
measure. The Company believes that in addition to production costs,
depreciation and amortization, and royalties, cash costs per ounce is a
useful and complementary benchmark that investors use to evaluate the
Company�s performance and ability to generate cash flow and is well
understood and widely reported in the silver mining industry.
However, cash costs per ounce does not have a standardized meaning
prescribed by IFRS as an indicator of performance. Investors are
cautioned that cash costs per ounce 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. The Company�s method of calculating cash costs per ounce
may differ from the methods used by other entities and, accordingly,
the Company�s cash costs per ounce may not be comparable to similarly
titled measures used by other entities. See �Financial and
Operating Highlights� below for a reconciliation of this measure to the
Company�s production costs, depreciation and amortization, and
royalties.
(3) Mine operating earnings is a non-GAAP measure used
by the Company to assess the performance of its silver mining
operations. Mine operating earnings is calculated as revenue less
production costs, depreciation and amortization and royalties.
The Company and certain investors use this information to evaluate the
Company�s performance.
(4)Adjusted earnings is a non-GAAP measure calculated
as net earnings for the period adjusting for the gain or loss recorded
on fair market value adjustments on the Company�s outstanding warrants.
The Company considers this measure to better reflect normalized
earnings as it does not include unrealized gains or losses from
outstanding warrants, which may be volatile from period to period.
(5)Cash flow from operations before changes in working
capital is a non-GAAP measure. This non-GAAP measure is used by the
Company to manage and evaluate operating performance and the Company
considers this measure to better reflect normalized cash flow generated
by operations. Cash flow from operations per share is a non-GAAP
measure. Cash flow from operations before changes in working capital
per share is used as a measure of return on capital and is calculated
using cash flow from operations, before working capital changes,
divided by basic weighted average shares outstanding.
(6)Percentage refers to the total number of issued and
outstanding shares of the Company at the beginning of the normal course
issuer bid.
(7)To illustrate the potential positive impact from the
Minefinders acquisition, the forecast represents Pan American�s 2012
planned production consolidated with Dolores� actual production
achieved in the last nine months of 2011.
Commenting on the fourth quarter and fiscal 2011 results, Geoff Burns,
President and CEO said; �The fourth quarter was not our best production
quarter, but we still generated very respectable earnings and cash
flows. As for the full year, the results speak for themselves,
record sales, record operating cash flows, and record earnings�.
Burns added, �We have resolved the fourth quarter production issues at
Manantial Espejo and Alamo Dorado to start 2012 in excellent shape and
in spite of the rising cost trend that the whole industry is facing,
our operating margins remain strong and we are poised to repeat the
financial success we enjoyed in 2011.�
Financial
Results
Pan American posted strong adjusted earnings and cash flows for the fourth
quarter of 2011. Adjusted earnings generated by the Company�s
seven operations rose 15% from the last quarter of 2010 to $64.5
million, or $0.61 per share. The increase was directly
attributable to higher realized prices for all metals produced by the
Company and lower taxes, partially offset by increased production costs
and depreciation and amortization expenses. For the full year
2011, the Company�s consolidated adjusted earnings grew more than
three-fold to a record $252.3 million, or $2.37 per share.
Earnings were boosted by higher realized metals prices for all metals
sold by the Company, which more than offset higher direct operating
costs and increased depreciation and amortization charges.
The Company�s revenue during the fourth quarter of 2011 rose to $212.4
million, 9% higher as compared to sales recorded in the last quarter of
2010. The increase resulted from significantly higher metal
prices, partially offset by lower quantities of metals sold.
Revenue for the full year 2011 surged to a record $855.3 million, or
32% higher than in the previous year.
In 2011, the Company realized average prices for silver and gold of
$35.03 per ounce and $1,568 per ounce respectively, an increase of 76%
and 29% over 2010, respectively. Realized prices for all base
metals produced by the Company also trended higher with copper, zinc
and lead averaging $8,625 per tonne, $2,208 per tonne and $2,402 per
tonne, respectively. On an annualized basis, silver accounted for
74% and gold accounted for 12% of the Company�s revenue, while zinc,
lead and copper contributed a combined 14% of total revenue.
Mine operating earnings generated during the final quarter
of 2011 were $88.3 million, 2% less than in the comparable period of
2010. The slight decline was mainly the result of lower
quantities of precious metals sold, and by higher operating costs
resulting from higher labour and energy expenses at the Peruvian,
Argentinean and Bolivian operations. Mine operating earnings for
the full year 2011 were $409.1 million, an all-time high and an
increase of 70% as compared to 2010.
Cash flow from operations, before changes in operating working capital
was $79.2 million, or $0.74 per shareduring the fourth quarter of 2011,
similar to the comparative period of 2010. 2011 annual cash flow
from operations, before changes in operating working capital, rose 60%
from the previous year to an all-time record of $347.4 million, or
$3.26 per share.
At December 31, 2011, Pan American had cash and short term investments
of $491.2 millionand the Company�s working capital grew by
approximately $136.5 million to $566.4 million. The Company
remains debt free, except for some minor capital leases for facilities
and equipment in the amount of $31.6 million.
Additionally, during the last quarter of 2011
the Company repurchased approximately 2.6 million shares under its
normal course issuer bid for total consideration of approximately $66
million. As of December 31, 2011, the Company had executed 66.4%
of the total allowed under the 12-month program, decreasing the
Company�s issued and outstanding shares to 104,492,743.
The Company�s effective tax rates vary considerably between periods and
from the amounts that would result from applying the Canadian statutory
income tax rates to earnings before income taxes. The main
factors which have affected the effective tax rates for the quarter
(18%) and year ended December 31, 2011 (25%) and the comparable periods
of 2010 (118% & 84% respectively) were the unrealized gains and
losses on the Company�s warrants position, foreign income tax rate
differentials and foreign exchange gains and losses. Although
these and other factors will continue to cause volatility in the
future, the Company expects that the effective tax rate for 2012 would
be between 30% - 35%.
Production and
Operations
During the fourth quarter of 2011, the Company produced 5.3 million
ouncesof silver and 17,239 ouncesof gold, a decrease of 6% and 10%,
respectively from the last quarter of 2010. Production was below
expectations primarily due to three events: (i) a two-week unplanned
plant shutdown to facilitate the repair of the trunion bearing of the
primary ball mill at Manantial Espejo, (ii) poor mobile mine equipment
availability due to the heightened restrictions on imports in
Argentina, which impaired the flow of spare parts for mobile equipment
and resulted in a reduction in mined tonnage at Manantial Espejo, and
(iii) a decision to complete the in-pit Phase 3 exploration drilling
program at Alamo Dorado, which restricted our ability to mine fresh
ore.
The Company�s Mexican operations continued to be Pan American�s largest
silver producers with Alamo Dorado producing 1.2 million ounces and La
Colorada a close second with silver production of 1.1 million ounces
during the current quarter.
Pan American�s Peruvian operations produced a total of 1.4 million
ounces of silver, 37% below production during the 4th
quarter of 2010, but within management�s revised forecast following the
Company�s decision to demobilize a significant number of contractors at
Huaron and Morococha. At Huaron, silver production for the fourth
quarter of 2011 was essentially flat as compared to 2010, with reduced
throughput rates offset by higher silver grades and recoveries.
At Morococha, silver production fell 35% to 0.4 million ounces on lower
mining rates and reduced ore grades, as efforts focused on miner
training, in-fill drilling, infrastructure improvements and, more
importantly, increased development rates. Underground development
rates at Morococha increased to over 4,300 meters during the fourth
quarter of 2011, a 20% increase from the third quarter of 2011.
In January 2012, both Huaron and Morococha posted improving results,
producing approximately 0.3 and 0.2 million ounces of silver,
respectively.
During the last quarter of 2011, the San Vicente mine increased silver
production by 25% compared to the same quarter of 2010 to 0.8 million
ounces, in large part due to higher throughput.
Due to the issues previously mentioned, fourth quarter production at
Manantial Espejo was 0.8 million ounces of silver and 11,114 ounces of
gold, or 18% and 11% less than a year ago, respectively and well below
expectations. However, with the repair to the ball mill complete,
January 2012 production was back to normal levels at approximately 0.3
million ounces of silver and 5,200 ounces of gold.
In 2011, Pan American�s silver production reached 21.9 million
ounces. As was the case in 2010, Alamo Dorado and La Colorada
were the Company�s largest silver producers with output of 5.3 million
ounces and 4.3 million ounces, respectively. Manantial Espejo and
San Vicente contributed 3.8 million ounces and 3.1 million ounces of
silver, while Huaron, Morococha, and Quiruvilca contributed 2.8
million, 1.7 million and 0.9 million ounces of silver, respectively.
Gold production in 2011 was 78,426 ounces, a decrease of 12% in
comparison to 2010, primarily due to the plant shut down and poor
mobile equipment availability at Manantial Espejo. Consolidated
base metal production during 2011 was 37,234 tonnes of zinc, 12,701
tonnes of lead, both about 5% above expectations, and 4,544 tonnes of
copper, which was in-line with expectations.
Consolidated cash costs for the fourth quarter of 2011 rose to
$11.18per ounce of silver, net of by-product creditsdue to a 17% increase in operating costs and a 6% reduction
in ounces of silver produced. 2011 consolidated cash costs were
$9.44 per ounce of silver, net of by-product credits, a 66% increase
from the $5.69 recorded in 2010 and a direct reflection of the cost
escalation that has been affecting the entire mining industry in
addition to the increases in tariffs and royalties that Pan American
pays primarily in Bolivia and Argentina, which increase when the price
of silver increases.
2012 Outlook �
Current Operations
In 2012 the Company expects silver production to be between 21.5 and
22.5 million ounces, as planned increases in production at Manantial
Espejo and San Vicente will likely be offset by a slight decline in
production at Alamo Dorado. Inflationary cost pressures, led by
increasing labor demands, increasing smelter charges and increased
royalties are expected to continue throughout 2012 and management estimates
that direct site operating expenses will rise approximately 10% on a
consolidated basis. In addition, management is forecasting a
modest decline in the Company�s base metal by-product production,
partially off-set by a small increase in gold production. The
combined effect of the increased operating expenses and slight decline
in by-product credits means that the Company expects an increase in
cash costs to between $12.50 and $13.50 per ounce of silver in 2012,
net of by-product credits.
In 2012, the Company is also forecasting production of 75,000 to 80,000
ounces of gold, 33,000 to 34,000 tonnes of zinc, 11,000 to 11,500
tonnes of lead and 2,500 to 3,000 tonnes of copper. Planned
silver production and cash costs for each of Pan American�s existing operations
are detailed below:
(1)For purposes of estimating 2012�s cash costs, the Company
assumed the following price levels for its by-product production: Zn
$1,900/tonne; Pb $2,000/tonne; Cu $7,300/tonne; Au $1,600/oz.
(2) The forecast for Quiruvilca only includes
estimates for the first quarter of 2012. The Company is currently
assessing strategic alternatives for the mine, which may include
continued operations, divestiture, or placing the mine on care and
maintenance.
Growth Projects
At the Navidad project in the province of Chubut, Argentina, the
Company invested $16.4 million in project development during the fourth
quarter of 2011. Work focused on
activities geared towards the completion of a Feasibility Study and
included: the completion of the expanded 2011 exploration program to
carry out infill drilling of known deposits, updating Mineral Resource
estimates, the completion of additional metallurgical tests, project
design and production plan optimization, and the completion of the
Environmental Impact Assessment. In addition, the Company
continued to invest in community relations and support initiatives to
improve communication with the public, expand the understanding of
mining activities and their potential impact and help the local
communities that continue to endure the prolonged effects of ash fall
from a volcanic eruption. During 2011, Pan American invested a
total of $33.2 million in development activities at Navidad, not
including $17 million the Company spent to purchase equipment for the
future Navidad processing plant.
The province of Chubut still prohibits the open pit exploitation of
mineral deposits. However, the legislative environment is
improving, as evidenced by the fact that in January of 2012, the
neighbouring province of Rio Negro, where Pan American�s Calcatreu gold
deposit is located, revoked the ban on the use of sodium cyanide in
mineral processing. There is no doubt that the Central Meseta
region, which straddles the border between
Chubut and Rio Negro, would greatly benefit from the investment and
related economic activity that the responsible development of mining
projects like Navidad would provide. The Company remains
confident that the restrictive legislation in Chubut will be amended
during 2012 to allow for the development of Navidad. In 2012, Pan
American expects to invest $22.8 million to complete a Feasibility
Study for Navidad.
At the La Preciosa joint-venture project in Mexico, the Company
invested $0.7 million during the last three months of 2011 to complete
an alternative development evaluation in advance of completing a full
Feasibility Study in 2012. During 2011, Pan American invested a
total of $2.4 million at La Preciosa and management expects to invest
approximately $1 million in the first quarter of 2012 to advance the project�s
Feasibility Study.
In 2012, Pan American is planning to invest approximately $87.7 million
in sustaining capital at its seven operating mines, including $15.5
million for brownfield exploration. In addition, the Company
expects to spend another $7.8 million in selected greenfield
exploration activities.
Proposed
Acquisition of Minefinders
On January 23, 2012, Pan American and Minefinders announced that they
had entered into a definitive agreement (the �Arrangement Agreement�)
pursuant to which Pan American will acquire all of the issued and
outstanding common shares of Minefinders by way of a plan of
arrangement. Under the terms of the Arrangement Agreement,
Minefinders shareholders will be entitled to elect to receive, in
exchange for each Minefinders share held, either: (i) 0.55 shares of
Pan American and CDN$1.84 in cash; or (ii) 0.6235 shares of Pan
American; or (iii) CDN$15.60 in cash, subject to pro-ration under total
aggregate cash and share pools. The consideration represents a
total offer value of CDN$15.60 per Minefinders share and implies a
total transaction value of CDN$1.38 billion. Following completion
of the transaction, former Minefinders securityholders will own up to
approximately 32% of Pan American, on a fully-diluted basis. The
Arrangement Agreement was amended by Pan American and Minefinders
pursuant to an amendment agreement dated February 14, 2012 (the
�Amendment Agreement�). The Arrangement Agreement and the
Amendment Agreement can be obtained under Pan American�s profile on
SEDAR at www.sedar.com.
The proposed acquisition is subject to approval by Pan American�s
shareholders and Mindefinders� securityholders, and the terms and
conditions for the proposed transaction will be summarized in the
management information circulars to be provided to Pan American�s
shareholders and Minefinders� securityholders. The Company
expects that its management information circular relating to the
acquisition will be mailed out to its shareholders on or about Friday,
February 24, 2012 and that a special meeting of the Company�s
shareholders will take place on March 26th, 2012. If
approved by Pan American�s shareholders and Minefinders�
securityholders, the Company expects to complete the proposed
transaction on or about March 30, 2012.
Management and the Company�s Board of Directors fully support the
proposed acquisition and, assuming all necessary approvals are obtained
and the transaction completes, believe that significant strategic
benefits to Pan American�s shareholders resulting from the acquisition
will include: (i) enhanced operating and development portfolio
diversification towards producing assets, (ii) additional near-term
cash flow, (iii) creation of the leading growth profile in the silver
sector, (iv) a meaningful reduction our average silver cash costs
across our production portfolio, (v) addition of significant silver and
gold mineral reserves and resources with excellent potential to
increase even further through exploration (vi) a number of attractive
near-term opportunities to drive production growth, and (vii) a strong
balance sheet and access to capital; and (viii) increases the Company�s
exposure to the prices of silver and gold.
Assuming the necessary approvals are obtained and the transaction
completes, the addition of the Dolores mine�s production to Pan
American�s current portfolio of producing assets should have a
significant positive impact on the Company�s 2012 forecast (Note: technical information
contained in this press release relating to Minefinders has been
reviewed by Mark H. Bailey, M.Sc. P.Geo., who is Minefinders� Qualified
Person for the purposes of NI 43-101). The additional
ounces from Dolores are also expected to meaningfully reduce Pan
American�s silver cash costs. To illustrate the potential positive
impact to silver and gold production, the following table shows Pan
American�s forecasted production for 2012, consolidated with Dolores�
actual production achieved in the last nine months of 2011:
(1)Assuming a March 30, 2012 closing, Pan American will only
consolidate 9 months of Dolores� mine production in 2012 and as such
are using the Dolores� mine actual production for the nine-month period
from April 1, 2011 to December 31, 2011. The production figures
contained in this press release relating to the Dolores mine are based
on actual production figures announced by Minefinders by way of a news
release dated January 9, 2012.
On a silver-equivalent basis, using a silver-gold ratio of 53 to one
(at assumed prices of $30 per ounce of silver and $1,600 per ounce of
gold), Pan American�s 2012 consolidated silver-equivalent production
would rise from approximately 26 to 27 million ounces to approximately
31 to 32 million ounces.
Commenting on the proposed acquisition, Geoff Burns, President &
CEO, said, �This is very much a strategic de-risking transaction for
Pan American. Acquiring Minefinders, with its Dolores property
adds a proven, long-life, low-cost operating mine with significant
reserves and resources and outstanding exploration and expansion
potential. It clearly increases and diversifies our operating and
cash flow base into a highly preferred mining jurisdiction�.
***
About Pan
American Silver
Pan American Silver�s mission is to be the world�s largest and lowest
cost primary silver mining company by increasing its low cost silver
production and silver Mineral Reserves. The Company has seven
operating mines in Mexico, Peru, Argentina and Bolivia. Pan American
also owns the Navidad silver development project in Chubut, Argentina,
the Calcatreu gold project in Rio Negro, Argentina and is the operator
of the La Preciosa joint venture project in Durango, Mexico.
Technical
information contained in this news release with respect to Pan American
has been reviewed by Michael Steinmann, P.Geo., Executive VP Geology
& Exploration, and Martin Wafforn, P.Eng., VP Technical Services,
who are the Company�s Qualified Personsfor the purposes of NI 43-101.
Neither Pan American nor Messrs. Steinmann or Wafforn accept any
responsibility in respect of technical information of Minefinders
contained in this press release.
Pan American will host a conference call
to discuss the results on Thursday, February 23, 2012 at 11:00 am ET
(08:00 am PT). To access the conference, North American
participants dial toll free 1-800-319-4610. International
participants dial 1-604-638-5340. A live audio webcast can be
accessed athttps://services.choruscall.com/links/pan120223.html
Listeners may also gain access by logging on at www.panamericansilver.com. The
call will be available for replay for one week after the call by
dialing 1-604-638-9010 and entering code 6218 followed by # sign.
Information
Contact
Kettina Cordero
Coordinator, Investor Relations
(604) 684-1175
info@panamericansilver.com
www.panamericansilver.com
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the
statements and information in this news release constitute �forward-looking
statements� within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and �forward-looking information� within
the meaning of applicable Canadian provincial securities laws.
All statements, other than statements of historical fact, are
forward-looking statements. When used in this news release the
words, �believes�, �expects�, �intends�, �plans�, �forecast�,
�objective�, �OUTLOOK�, �POSITIONING�, �POTENTIAL�, �ANTICIPATED�,
�budget�, and other similar words and expressions, identify
forward-looking statements or information. These forward-looking
statements or information relate to, among other things: future
production of silver, gold and other metals and the timing of such
production; future cash costs per ounce of silver; the price of silver
and other metals; THE EFFECTS OF LAWS, REGULATIONS AND GOVERNMENT
POLICIES AFFECTING PAN AMERICAN�S OPERATIONS OR POTENTIAL FUTURE
OPERATIONS, INClUDING But NOT LIMITED TO, pan american�s shareholders
and minefinders� securityholders approving the acquisition of
minefinders by pan american and the completion of the acquisition; LAWS
IN THE PROVINCE OF CHUBUT, Argentina, WHICH, currently have significant
restrictions on mining; the recent changes to the laws of bolivia with
respect to mining, and laws in Argentina which impact pan american�s
ability to repatriate funds; the ability of the companies to maintain
and repair equipment necessary to operate their mines, particularly for
example, in light of recent changes to import and export restrictions
in Argentina; future successful expansion of minefinders� dolores mine
and development of the navidad project, the la preciosa project, and
other development projects of the companies, including the
addition of a mill at minefinders� dolores mine; the sufficiency of the
Company�s current working capital, anticipated operating cash flow or
its ability to raise necessary funds; timing ofrelease of technical or
other reports; the estimates of expected or anticipated economic
returns from the Company�s mining projects; estimated exploration
expenditures to be incurred on the Company�s various properties;
forecast capital and non-operating spending; future sales of the
metals, concentrates or other products produced by the Company; and the
Company�s plans and expectations for its properties and operations.
These statements
reflect the Company�s current views with respect to future events and
are necessarily based upon a number of assumptions and estimates that,
while considered reasonable by the Company, are inherently subject to
significant business, economic, competitive, political and social
uncertainties and contingencies. Many factors, both known and
unknown, could cause actual results, performance or achievements to be
materially different from the results, performance or achievements that
are or may be expressed or implied by such forward-looking statements
contained in this News Release and the Company has made assumptions and
estimates based on or related to many of these factors. Such
factors include, without limitation: fluctuations in spot and forward
markets for silver, gold, base metals and certain other commodities
(such as natural gas, fuel oil and electricity); fluctuations in
currency markets (such as the Canadian dollar, Peruvian sol, Mexican
peso, Argentine peso and Bolivian boliviano versus the U.S. dollar);
risks related to the technological and operational nature of the
Company�s business; changes in national and local government,
legislation, taxation, controls or regulations including among others,
changes to import and export regulations and laws relating to the
repatriation of capital and foreign currency controls; political or
economic developments in Canada, the United States, Mexico, Peru,
Argentina, Bolivia or other countries where the Company may carry on
business in the future; risks and hazards associated with the business
of mineral exploration, development and mining (including environmental
hazards, industrial accidents, unusual or unexpected geological or structural
formations, pressures, cave-ins and flooding); RISKS RELATING TO THE
CREDIT WORTHINESS OR FINANCIAL CONDITION OF SUPPLIERS, REFINERS AND
OTHER PARTIES WITH WHOM THE COMPANY DOES BUSINESS; inadequate
insurance, or inability to obtain insurance, to cover these risks and
hazards; employee relations; RELATIONSHIPS WITH AND CLAIMS BY LOCAL
COMMUNITIES AND INDIGENOUS POPULATIONS; availability and increasing
costs associated with mining inputs and labour; the speculative nature
of mineral exploration and development, including the risks of
obtaining necessary licenses and permits AND THE PRESENCE OF LAWS AND
REGULATIONS THAT MAY IMPOSE RESTRICTIONS ON MINING, INCLUDING THOSE
CURRENTLY IN THE PROVINCE OF CHUBUT, Argentina; diminishing quantities
or grades of mineral reserves as properties are mined; global financial
conditions; the Company�s ability to complete and successfully
integrate acquisitions AND TO MITIGATE OTHER BUSINESS COMBINATION
RISKS; challenges to, OR DIFFICULTY IN MAINTAINING, the Company�s title
to properties AND CONTINUED OWNERSHIP THEREOF; the actual results of
current exploration activities, conclusions of economic evaluations,
and changes in project parameters to deal with unanticipated economic
or other factors; increased competition in the mining industry for
properties, equipment, qualified personnel, and their costs; and those
factors identified under the caption �Risks Related to Pan American�s
Business� in the Company�s most recent Form 40-F and Annual Information
Form filed with the United States Securities and Exchange Commission
and Canadian provincial securities regulatory authorities.
Investors are cautioned against attributing undue certainty or reliance
on forward-looking statements. Although the Company has attempted
to identify important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be as
anticipated, estimated, described or intended. The Company does
not intend, and does not assume any obligation, to update these
forward-looking statements or information to reflect changes in
assumptions or changes in circumstances or any other events affecting
such statements or information, other than as required by applicable
law.
Pan
American Silver Corp.
|
Financial
& Operating Highlights
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
Consolidated
Financial Highlights (in thousands of U.S. Dollars)
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) for the period
|
$
|
95,467
|
$
|
(5,837)
|
$
|
354,146
|
$
|
15,707
|
Earnings
(loss) per share attributable to common shareholders
|
$
|
0.89
|
$
|
(0.06)
|
$
|
3.31
|
$
|
0.13
|
Adjusted
earnings for the period(1)
|
$
|
64,473
|
$
|
55,855
|
$
|
252,318
|
$
|
106,368
|
Adjusted
earnings per share
|
$
|
0.61
|
$
|
0.52
|
$
|
2.37
|
$
|
0.99
|
Mine
operating earnings(2)
|
$
|
88,270
|
$
|
89,775
|
$
|
409,125
|
$
|
241,115
|
Cash
flow from operations before changes in working capital(3)
|
$
|
79,158
|
$
|
80,855
|
$
|
347,359
|
$
|
217,242
|
Capital
spending
|
$
|
(41,890)
|
$
|
(24,279)
|
$
|
(123,579)
|
$
|
(78,010)
|
Cash
and short-term investments
|
$
|
491,222
|
$
|
360,504
|
$
|
491,222
|
$
|
360,504
|
Working
capital(4)
|
$
|
566,430
|
$
|
429,929
|
$
|
566,430
|
$
|
429,929
|
|
|
|
|
|
|
|
|
|
Consolidated
Ore Milled & Metals Recovered to Concentrate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tonnes
milled
|
|
1,147,571
|
|
1,188,648
|
|
4,625,847
|
|
4,657,936
|
Silver
metal - ounces
|
|
5,334,537
|
|
5,667,665
|
|
21,853,582
|
|
24,285,794
|
Gold
metal - ounces
|
|
17,239
|
|
19,249
|
|
78,426
|
|
89,556
|
Zinc
metal - tonnes
|
|
10,730
|
|
10,509
|
|
37,234
|
|
43,103
|
Lead
metal - tonnes
|
|
3,400
|
|
3,527
|
|
12,701
|
|
13,628
|
Copper
metal - tonnes
|
|
1,173
|
|
1,261
|
|
4,544
|
|
5,221
|
|
|
|
|
|
|
|
|
|
Consolidated
Cost per Ounce of Silver (net of by-product credits)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
cash cost per ounce
|
$
|
11.18
|
$
|
6.61
|
$
|
9.44
|
$
|
5.69
|
Total
production cost per ounce
|
$
|
16.74
|
$
|
10.54
|
$
|
13.51
|
$
|
9.51
|
|
|
|
|
|
|
|
|
|
Payable
ounces of silver (used in cost per ounce calculations)
|
|
5,020,804
|
|
5,410,003
|
|
20,753,040
|
|
23,224,367
|
|
|
|
|
|
|
|
|
|
1.Adjusted earnings is a non-GAAP measure calculated
as net earnings for the period adjusting the gain or loss recorded on
fair market value adjustments on the Company�s outstanding warrants.
2.Mine operating earnings is a non-GAAP measure
used by the Company to assess the performance of its silver mining
operations. Mine operating earnings is calculated as revenue
less production costs, depreciation and amortization and
royalties. The Company and certain investors use this
information to evaluate the Company�s performance.
3.Cash flow from operations before changes in
working capital is a non-GAAP measure. This non-GAAP measure is used
by the Company to manage and evaluate operating performance and the
Company considers this measure to better reflect normalized cash flow
generated by operations. Cash flow from operations before
changes in working capital is calculated by taking cash flow from
operations before interest and income taxes less the working capital
adjustments and current income tax expense. Investors are
cautioned that this measure is not defined in current GAAP and there
is no comparable measure defined in GAAP.
4.Working capital spending is a non-GAAP measure
calculated as current assets less current liabilities. The Company
and certain investors use this information to evaluate whether the
Company is able to meet its current obligations using its current
assets.
5.Consolidated cost per ounce of silver is a non-GAAP
measure. Refer to the cash costs and total production costs per
ounce of payable silver reconciliation on page 11 for a breakdown of
the calculation.
|
|