Pan American Silver (PAAS) 12 May 222022 Q1 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver First Quarter 2022 Results Conference Call.

As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions [Operator Instructions]. to Investor conference Relations like Fisekci, to now President, Vice and would turn over the Siren I Corporate Communications. Ms. ahead, go Please Fisekci.

Thank statements call today XXXX us to non-GAAP information you the American see Michael reference MD&A, for QX the Please Silver's cautionary and our QX of for makes which all conference our forward-looking includes Pan Pan release This measures. statements news in and Web call. I'll and unaudited site. XXXX CEO. and to presentation slides results, call now President American's turn available Steinmann, for joining on over our are

significant Thanks, the in January during early of Omicron the around workforce start February. Siren. was and that quarter experienced spreading quickly The our was reductions by variant Throughout the deployments heavily impacted world. first we operations,

this periods, Fortunately, mandated government COVID largely serious our illness. of to was and screening the process due and because not isolation

of We're half second our and rising. continued levels to was reflects on for impactful out, our achieve the how on to maintaining lack La and Dolores XXXX going Omicron cost at to also Arena Colorada. surge weighted deployment our XXXX. to Omicron subsiding the until workforce forward, on [Technical operational Difficulty] back and that at we the that year. view deployment say guidance the pleased large track guidance This of our play the less demand for La sequencing improvements By were levels guidance February. XXXX workforce production would visibility time, With issuing I'm and delayed are we late

decrease if as shortages. chain uncertain impact In costs overall monitoring QX, produced were pressures in million inflationary of largely Silver We're per ounce. consumables, silver. of global we'll all cost silver driven the segment on ounce. than Despite metal cost we segment are we were as particularly inflationary at higher pressure, expected prices costs cost estimates $XX.XX and our for However, for adjust experiencing pressures, costs per carefully and to the inflationary that were necessary. this X.X byproducts Morococha. sustaining pressures in Omicron the higher $XX.XX and ounces Cash diesel supply well contributed currently

in metal in As at to despite throughput and prices Joaquin. from led of in QX lower the the and production XX% by byproduct because are Manantial DAP. now on strong due anticipated went guidance. contribution production expected from structures grades ore maintenance as QX costs silver running associated impacted Morococha cost decline high February. the operation higher a narrowing La our down QX for from costs in before Espejo were performance vein operations and a grades QX Vicente that at Colorada XXXX of to in Omicron. due negatively and well grade recorded and recorded in We at dilution Silver decrease San in late Mining of care at COSE to greater some COSE

to we accelerating attractiveness of exploration are joint facility. and alternative including Morococha, areas that neighboring disclosed the allow issued mine. the expansion in QX We we processing Amistad in when opportunities could allocating currently enhance monetization, venture our guidance, operation a prospective of investigating February for closure plant XXXX capital plant to decommissioning of will As processing that for or completed a at we the new be build

operation expected La production Gold all of costs all costs QX. sequencing per Arena also ounce. by $X,XXX segment impacted in to Cash our produced XXX,XXX impacted $XXX ounces Gold in gold at value realizable $X,XXX or at ounce, were mine in net adjustment ounce. operations. $XX Omicron inflationary in costs at and to QX. segment increased NRV increased sustaining that ounce. in consolidated inventory gold sustaining large gold all pressures per segment Dolores. by mine costs per Due per gold Dolores by costs and segment were on lower and segment sustaining and A were Moving We at costs as grades.

adjustments XX localized $XX.X due into production by inventory and of expected has fair our which Revenue to performing improved model open lower to Phase sequencing This to accounting ounces As in production was the one-time the reminder, the shortfall were time costs. a than included be cost are and XXX,XXX mined inventory ounces of and mine the impacted production of a to inventory of recognize Shahuindo in three adjustments gold Dolores, affect adjustment million dryer Maverix. oil our drawdowns past Xb includes value stacked This QX been over per $X.XX not in to to the Phase contribution NRV $XX.X weather, interest now market pit. that inventory well $XXX.X or gold on of due us and increase allowed the assessment. heap. blending at earnings do million, the the reconciliation share. the adjustments QX which in of strong for issue gold. appears made tons or mining grades a At years, Net million inventory was the NRV value silver XX,XXX of QX of relative to in we cash pit. as

the treatment significant accounting based Maverix that our Maverix. determination for longer on our influence changed on interest no in we have have We

accounts from quarterly which balance recorded and taxes in long-term were earnings of timing million $XX.X million $XX.X asset Our sharing sheet cash or in on is per $XX.X now capital, $X.XX million largely totaled as from a payable XX% $XX Cash and in buildup not receivable. financial interest includes affect working will Maverix earnings. million, Adjusted the flow operations and QX.

QX in annual the payments Our typically are tax highest in QX. and

to financial policy the respect QX. Based with with million. February, introduced dividend per net the position $X.XX common We are dividend a in of we cash in share strong on we $XXX.X announced of

amount the policy our fund sheet. Our in participate per while performance the to balance of our allow provides tied dividend shareholders on $X.XX net growth cash base a dividend This projects. providing share to financial for liquidity to common improving supplemental and

growth the projects. to on Moving

So early this any while The mineralization East, infill for drilling quarter, West. have over XX,XXX the confirmed expanded exploration We single results the we wide Eastern meter in and the completed area Colorada in Skarn. drilling up quarter. additional the continuous drill of Central on most infill we mineralization deposit, week, the drilling and the to in completed South meters the of Skarn nearly a released the XXX part step La

XXXX. of resource last since We drilling infill expiration have estimate over now XXX,XXX the and meters August completed X, dated

the advancing starting for pre-sinking line concrete the Skarn, the commissioning refrigeration of We ventilation and the shaft also for progressed our the projects plant.

been to which We mining evaluating mining bulk appear for attractive alternative have the methods, deposit. often

an At ILO-XXX resource estimate we to and continues against the meeting Escobal, Skarn methods provide these inclusive for assessing May reserve Xth. be with intend next for and planned early in the meeting QX resource will company June that the annual updated the consultation the update. Xth together We pre-consultation with on process held

statement carbon in we we questions, governance environmental, by open from published that, open Report net for at social I And the change released least GHG includes policy areas. last dioxide XXXX Notably, questions. emissions performance by our up like as and report Before we've XX% and to that aspirational for the objective week. goals these our our metrics with Sustainability emissions The climate XXXX. on baseline an sets to our equivalent an would objective reduce XXXX zero call emissions by our of XXXX

Thank you.

now Instructions]. begin the will We question-and-answer session [Operator

comes Turnbull Scotiabank. with question from Trevor first The

Escobal consultation for the just the update checked last the like process, in site February. Web back I it looks and was

you information think June additional in either gave you the the And May. just appreciate or meeting the next I So about said one, July. I

that to about there take place. did sound On meetings site, the needed XX Web it like was

kind right in the seven. And that roughly way take in meetings? ones we the about seems summer so there's May that that length the if going count to Is to think that to the would us of be XX and of process like the

set that think there's a amount so of meetings. don't I

similar now are very due there's schedule. calls, a of the last increase years didn't than and meetings we place of when a in this meetings, that that kind COVID mentioned to Many explained a two last person the of reasons. you that seen think we've saw what quarter, of year, see we for I than that saw more COVID earlier I obvious richer Mines really to for of got Ministry people meetings a call I as lengthy allow delay we lot in with obviously,

at and month think I continuous So every we assume between, I continue. that of in phased schedule that in that now. of so see XX. for guess count will I meetings don't certain us, right definitely see we will amount least and meetings now, just since say check can of that world you so, be sometimes as COVID said, Trevor, But with it's January, this at And hope us, But in I done all that all hopefully we the far. encouraged would

As was the that was Omicron compared as in when we call it see wave the world, a the huge first the really I to change well, really mentioned that call hit -- it last wave.

vaccinated. impact. the not of we are I waves now that subsequent much probably of people that think Lots having an see Omicron, from

have pretty levels the normal I think time I very much And are say to in the of that back everywhere. vaccination. We for a we company first rate can high worker

and as we'll hoped it's for in where see it much too ends. read year the moving beginning don't So think the there, of forward I

No, bit. lead of kind does that recommence you up what and need outcomes, it could do of to asking I'm a to would obviously provide timing operations, sense any get seem speculation how though, you maybe sort or be And moving picking recommissioned? allowed long, without you provided pace wonder glad of time on are hear to to for I

care environmental in care can have and is plan Well, the on to mine management that and we and maintenance do the is maintenance program. there for and work that

mine, and the underground part keep mill the we course, shape. Of good in the

all that's ready to So go.

some would not stope are to would have like need workforce. or and underground equipment that up. any of so the course, development higher we replace course, something And pick Of to we doing of that,

But good can I said a in is care said, the to but constant plant, shape. So maintenance as in programs production, as back few you everything go imagine, would is be months. the I that to and mine, as everything and

that, where saw about you spent a -- that $X on million month program. million we that's probably to and So $X.X

of in work a that's imagine going can bit there. you quite So

And about my last question is La Colorada Skarn. then just

this resources You previous was It of up It estimate. is areas. of know into Is to more the update to to have out been on more resource and some potentially drilling later step was adding I upgrading the more the provide expect inferred the should work XX% with resources almost infill just And by like a drilling, it some or time be the to be update. we huge done you pending inferred looks the new going appears amount holes? year. how step going I of the focused. this wondered this focused coming be just since drilling you've about about the out

Well, holes, the step did not infill with much we find of it we mean, more them fringes we orebody we both. have do will XX ends were drilling. of information But or and from looking the still the I out obviously, kind this yet.

around for amazing continuation it's those you an sure many So open it's amazing look familiar Trevor, with if are of actually at deposit, you kind you this And still there of holes. Skarn mineralization. pretty see actually, directions, the many,

than have this. I have much, much normally I've that in seen my career. irregular variable Skarn more lots seen of and You

growing. resource so so It's really that looking So, still growing, far forward good. update. And to

since we last As over said, one. meters a the XXX,XXX we drilled

very We active. are

have XX, We XX on it. drilling rigs constantly

So it's on quite drilling. a that production

so just on both. expect And

sure as lot resource but for the I info a drilling As will of well. infill the increase step we have said outs

[Operator Bank Instructions]. from DeMarco question The next with Don National comes Financial.

Just continuing the some Skarn. with on maybe, questions Michael,

steps in that the this resource last to in update? But year maybe been technical the for you back resource look So a what course, a deferred. PEA was scheduled was Of calendar, we next be beyond to the order that had at know there at calendar? to put to certainly report some point, that in put into forward update need that point would one that point back What QX. do

we Well, high growing high mining we it, grade that a everywhere. that call in veins. late big, engineering the finding, lot on zones, some published the will bigger right optimization obviously, work we November intercepts value we I similar kind And than Remember, grade extremely or when our now, then very in or wide the talked side in year and of like of is zones when it's size to last define them suddenly November, in start is that of the method. about see of this and going really

minable methods. now can or that bigger mining So mining bulk the at bulk we possible fact look

to the really on minable once define on well, the that mining have resource. going for define to down, as engineering be it's method, main the mining. that's can And So driver that cost part nailed what's that imagine, obviously that that of we you the will the

those steps. So really are the next

we at about that be think, we equipment, daily obviously management cetera. I the once have et will of And know the dictate that that, more cetera, have it. what access, et have we for will size, exactly the the to build and much to look tailings tonnage plant we size

So forward that's steps really here. kind of the

of of lot of side, on that's I looking forward really why is parallel know that for that, -- to mining now first So resource, those a the that's the doing engineering course, method team and a the lot doing to that work We're results. step.

second I a Dolores. to question, shifting may, if As

So Dolores. year? to here the cost and factors contributed they're reiterate you Dolores the or over on on you whether the and of transient rebound and expect rest call you the the had to that at discussion the not Could Dolores, comment guidance, whether well some above costs just about cost

in biggest did area We anticipated. ores phase driver look the high the the area. grade hole costs little of that we mine an was project of to had up a the of drill into open grade like ore lower exploration, we the exploration processing bit that it overextended in QX we that the that on Probably pit the got fact -- nine that pit than original from did end a

see ore what for We're the haven't a to years, pit issue. been into very and reiterate grade, now at as really was quite three that we XX. that over encountered We that that's the localized the it Phase drove performing So incredibly we're I'd and a of we using It that phase. bit model bottom lower it's like costs was really those up. adjusted well.

those just So today and numbers this come lack as COVID kind our throughout of bit. face, was our could in QX kind we really an quite lack fuel just you've strong the of that deployment big during that brought unit to say, up average. on of With didn't up and kind the prices We I that of grades productivities costs period. down, that drove costs, it said, consumables, ounce during last other that lower up workforce and with came of couple over months. I on It per of was the kind But impact, the rates happened of one as have and inflation seeing area that cost maybe of a our mean QX. really supplies brought during heated explosives, seen world, people inflation

drivers But wouldn't that is COVID. QX closely driver. lower inefficiencies I watching the grade and big So inflation on, point are very real keen as the very It really today. with of Dolores at a factors something to being that was we

makes mostly out big either metal probably heap add difference. a sooner if we Don, our prices pressure obviously, Dolores to And change depending prices -- of and are impacting as lives But but on impacted you obviously,the seen on sooner we and daily inflationary a you for driven that adjustment the to comes impact kind you NRV different an this of quite that cost sizeable seen where and the costs, that, drivers the cash there know, in definitely adjustments this world the metal as or costs And that. that, course the our to and adjustments go. cost. there add quite And there we that cost world have at take see by energy NRV will higher to the to values that in quite inflationary we across off, see NRV not have and adjustments Just everywhere the see, well. definitely noncash pressure the that

question, what to point? or intention planning it even me Arena give of third updated an issue shifting Could La expand asset? doesn't that Are potentially drill, a strategic at X. an just your some maybe report, air a of as just technical for get candidate? this divestment a is develop asset time, Is you you And lot yours to

And lot why think doesn't I a get of reasons it two main time. fair

gold La The will I have mine La ago the expand exploration first the in one Arena that Resources], the Arena. is oxides, three mined his of La we at recall that oxide, out successful when assets the at been Tower Chris call assumed of, with or with current XXXX. it, be incredibly to looked Arena years and we life we the [Pan production team the X

I there. drilling think we are still successfully

us mid-year, there. positive outcome that new see will but and update reserve We with what brings very our resource

by production So X. at quite oxides now we a added of gold few additional years from the La Arena

the which of looked few said, that's one but a think Arena Arena I X, why at believe about has short a so obviously transaction, they a by questions now, very And La quite the [Tower] mean I pit, below. of changed imagine, substantially, remind open everybody copper, And at because study, is La that's as gold did did everybody to all that a their XX% and interesting then, as And gold looking revenue. we ago more La $X.XX Arena used do pit $X when XX% on Today years the got copper large just below gold study. is somewhere time gold three technical look reasons who quite the reason. copper I X when the that very nobody I La X is basically with I the around life, can looks thought or one didn't you it’s to definitely it, as lot people X There interesting. about there probably it's a And familiar would the copper, sits that not make that pit project. out porphyry mine and Arena basically current that bigger porphyry gold

looking companies a a So asset of metal type are for. that of process definitely lot

come longer to side you can So definitely on we there definitely price quite said, getting copper portfolio, more been lot copper producing is hasn't a obviously. while so Today's as company at as and few interesting gold imagine. big and at due probably the But years. my copper fact change for as it's think the of and have there's happened the gold prices interest more metals while, one in radar that I the that it due already keep on porphyry I the in just for last and precious to for And Arena to start porphyry, a well La outlook very it interest a on prices the we fact project. looking metal

conference This for over I concludes session. to back any now the Michael question-and-answer the closing turn to like remarks. would Steinmann

calling everyone thank Thanks, operator and you in. for

to forward an you which August update results, QX Looking give already. will on be our well

spring August. in summer and your you, early and Thank talk everybody. enjoy So

today's This concludes call. conference

disconnect have and for a participating pleasant day. your Thank may You you lines.