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The Company declares the first dividend of
2015 in the amount of $0.125
(All amounts in US$ unless otherwise stated.
Approximate production figures.)
VANCOUVER, Feb. 19, 2015 /CNW/ -
Pan American Silver Corp.
(NASDAQ: PAAS; TSX: PAA) (the "Company", or "Pan American"),
today reported unaudited financial results for the quarter and
year ended December 31, 2014 to accompany production figures
already reported for the same period on January 19, 2015.
The Company also announced today that its Board of Directors
has approved its first quarterly cash dividend of 2015 in the
amount of $0.125 per common share. Should the Company's Board of
Directors continue to approve future quarterly dividends in the
same amount, the annual cash dividend paid by Pan American would
be $0.50 per common share, which represents a yield of
approximately 4.4% based on the Company's closing share price on
NASDAQ on February 18, 2015. The cash dividend will be payable on
or about Friday, March 13, 2015 to holders of record of common
shares as of the close of Monday, March 2, 2015. Specific
distribution dates and amounts of future dividends will be
determined by the Board of Director on an ongoing basis. Pan
American's dividends are designated as eligible dividends for the
purposes of the Income Tax Act (Canada).
Fourth Quarter 2014 Highlights
(unaudited)
(1)
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Silver production of 6.75
million ounces
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Gold production of 43,900
ounces
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Consolidated cash costs
(2)
of $11.92 per silver ounce, net of by-product
credits
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All-in sustaining costs per
silver ounce sold ("AISCSOS")
(3)
of $18.62, net of by-product credits
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Revenue of $163.1 million
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Mine operating loss
(4)
of $21.4 million
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Net loss of $525.7 million, or
$(3.48) per share, including non-cash, after-tax
impairment charges of $498.7 million
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Adjusted loss of $21.2 million,
or $(0.14) per share
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Paid a total of $18.9 million in
cash dividends to shareholders, or $0.125 per
share
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Full-year 2014 Highlights
(unaudited)
(1)
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-
Record silver production of
26.11 million ounces
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Record gold production of
161,500 ounces
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Consolidated cash costs
(2)
of $11.46
(5)
per silver ounce, net of by-product credits better
than guidance of $11.70 to $12.70 per ounce
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AISCSOS
(3)
of $17.88, net of by-product credits in line with
guidance of $17.00 to $18.00 per ounce
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Revenue of $751.9 million
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Mine operating earnings
(4)
of $8.1 million
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Net loss
(5)
of $544.8 million, or $(3.60) per share, including
non-cash, after-tax impairment charges of $498.7
million
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Adjusted loss of $20.8 million
or $(0.14) per share
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Net cash generated from
operating activities of $124.2 million or $0.82 per
common share
-
Total dividends paid to common
shareholders of $75.8 million, representing $0.50 per
common share
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Financial Position at December
31, 2014
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Cash and short term investments
of $330.4 million
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Working capital of $522.7
million
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Total debt of $60.4 million
(including capital leases of $8.0 million)
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(1)
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Financial information in this news
release is based on International Financial Reporting
Standards ("IFRS"); results are unaudited;
percentages compare period-on-period.
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(2)
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Cash costs per payable ounce of
silver, net of by-product credits, is a non-GAAP
measure. Cash costs 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 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. See "Financial and Operating
Highlights" in the attached table for a
more detailed discussion of this measure and a
reconciliation of this measure to the Company's
production costs, depreciation and amortization,
and royalties.
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(3)
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All-in sustaining costs per
payable silver ounce sold ("AISCSOS") is a non-GAAP
measure. The Company has adopted the reporting of
AISCSOS as a measure of a silver mining company's
consolidated operating performance and the ability to
generate cash flow from all
operations collectively. We believe it is a more
comprehensive measure of the cost of operating our
consolidated business than traditional
cash and total costs per 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. This measure including its subcomponent
Sustaining Capital are non GAAP measures and readers
should refer to the attached table
in the section under "Sustaining Capital" for a
detailed discussion of this measure.
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(4)
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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.
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(5)
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Previously reported cash costs for
the Company's Peruvian operations overstated copper
by-product credits. Both consolidated and
Peruvian annual cash costs for 2014 and 2013 have been
adjusted to correct for this overstatement. The effect
of these corrections on
2014's annual consolidated cash costs was an increase
of $0.50 per ounce.
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Commenting on the Company's fourth quarter and full-year 2014
results, Geoff Burns, President & CEO said, "The price of
silver on December 31st, 2014 was $15.97 per ounce and in concert
with a strengthening US Dollar required us to record significant
asset impairment charges, negative net realizable value
adjustments, negative concentrate pricing adjustments and a
significant foreign exchange loss on our Canadian Dollar and
Mexican Pesos holdings. Together, these items have overshadowed
what was a very respectable fourth quarter operating performance
from both a production and cost perspective." Burns continued,
"In 2014 we achieved annual records for silver and gold
production and we did this below our guidance for cash costs. Our
AISCSOS were as forecasted and we generated net cash from
operating activities of $124.2 million or $0.82 per common share,
while returning an industry-leading dividend to our shareholders.
We have maintained the strength of our balance sheet and I look
forward to 2015 where we expect similar silver production, higher
gold production and a marked reduction in our AISCOS."
Financial Results
During the fourth quarter of 2014, Pan American
generated $163.1 million in revenue, 15% less than in the same
period of 2013, driven by lower volumes of metal sold and reduced
metal prices. At the end of the current quarter the Company
decided to defer the sale of approximately 7,000 ounces of gold
and 150,000 ounces of silver produced at Manantial Espejo mine
until the first quarter of 2015. While this negatively
impacted fourth quarter revenues and operating cash flows, the
Company did receive approximately $0.8 million of additional
revenue when this production was sold. The Company's revenue for
the full year 2014 was $751.9 million, 9% lower than in 2013.
Lower revenues for the year ended December 31, 2014 were mainly
due to significantly lower realized precious metal prices, partly
offset by greater quantities of gold and base metals sold. In
2014, silver sales volumes remained consistent with the prior
year and gold sales volumes increased significantly; however, the
average realized price of silver declined 20% to $18.53 per ounce
and the average realized price of gold declined 9% to $1,268 per
ounce. During the same period, the average realized price of
copper declined 6% to $6,825 per tonne and the average price of
lead declined 3% to $2,085 per tonne. Zinc was the only exception
to the downward trend as the metal's average price appreciated
during the year to $2,160 per tonne.
Pan American incurred a net loss of $525.7
million during the fourth quarter of 2014, or a loss per share of
$(3.48), compared to a net loss of $293.1 million during the
fourth quarter of 2013 (loss per share of $1.94). The loss was
primarily due to impairment charges that totaled $498.7 million
after-tax.
The decrease in metal prices that occurred in
the second half of 2014, led the Company to lower the silver and
gold prices used to estimate reserves, as well as the prices used
in the discounted life of mine cash flow models, which were
utilized to test for asset impairment. The Company assumed long
term silver and gold prices of $18.50 and $1,250 per ounce,
respectively, substantially lower than the prices used at the end
of 2013.
As a consequence, the Company recognized
impairments on several of its assets. The largest impairment was
on the Navidad property, where lower prices and a relatively high
discount rate combined to significantly reduce the Company's
carrying value of this asset.
The total impairment charges incurred at
December 31, 2014 were as follows:
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Property
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($ Millions)
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Dolores mine
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$ 110.8
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Manantial Espejo mine
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55.9
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Alamo Dorado mine
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17.7
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Mine impairments
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$ 184.4
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Navidad property
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286.1
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La Virginia property
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17.0
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La Bolsa property
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6.4
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Pico Machay property
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4.8
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Development property
impairments
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$ 314.3
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Total
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$ 498.7
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The financial results for the fourth quarter of
2014 were also impacted by negative sales adjustments to
previously reported provisional sales of $4.4 million, by foreign
exchange losses of $4.5 million on holding Canadian Dollars and
Mexican Pesos and by net realizable value adjustments of $2.2
million.
For the full year 2014, Pan American generated
a net loss of $544.8 million, compared to a net loss of $445.8
million generated in 2013. The 2014 loss was directly
attributable to the previously described impairment charges, in
addition to $30.0 million of negative net realizable value
adjustments and foreign exchange losses of $13.3 million.
Adjusting for the impairments and other
non-cash, unrealized items, Pan American generated an adjusted
loss of $21.2 million, or $(0.14) per share in the fourth quarter
and an adjusted loss of $20.8 million or $(0.14) per share for
the full-year of 2014.
Pan American posted $0.8 million in net cash
generated from operating activities during the last quarter of
2014, compared to net cash of $46.2 million generated during the
final quarter of 2013. However, net cash generated from operating
activities for the full year 2014 rose slightly to $124.2
million, compared to $119.6 million generated in 2013, as lower
cash operating margins were more than offset by lower income
taxes paid and working capital movements.
At December 31, 2014, Pan American had $330.4
million in cash and short term investments and working capital of
$522.7 million, with total debt of $60.4 million, including
capital leases of $8.0 million.
Production and Operations
During the fourth quarter of 2014, Pan American's mines
performed within management's expectations and produced 6.75
million ounces of silver and 43,900 ounces of gold.
The Company also produced 10,200 tonnes of zinc, 3,900 tonnes
of lead and a record 3,000 tonnes of copper on account of
quarterly record zinc and lead production at La Colorada and
quarterly record copper production at both Huaron and
Morococha.
Consolidated silver production for the full year 2014 was a
record 26.11 million ounces, slightly higher than 2013 silver
production and well within management's expectations. The new
record was achieved due to production gains at La Colorada,
Manantial Espejo, Dolores and Huaron and despite the expected
decline of silver production at Alamo Dorado.
As anticipated, Pan American also achieved record consolidated
gold production of 161,500 ounces in 2014, 8% greater than 2013
gold production, as a result of more ounces produced at Dolores
and Manantial Espejo.
In addition, Pan American's 2014 full year base metals
production rose significantly. Consolidated zinc production rose
3% from 2013 to 43,500 tonnes, primarily on account of higher
production at La Colorada. Consolidated lead production increased
11% compared to 2013 to 15,000 tonnes, with higher production
achieved at La Colorada and Morococha, partially offset by lower
production at San Vicente. Consolidated copper production rose to
a record 9,000 tonnes, 62% greater than in 2013, due to
significant production increases at Huaron and
Morococha.
Mexico
During the quarter ended December 31, 2014, silver production
at La Colorada was a record 1.29 million ounces, slightly more
than silver produced in the fourth quarter of 2013, mainly due to
record throughput and higher grades. La Colorada also produced a
record 2,200 tonnes of zinc and 1,000 tonnes of lead during the
quarter, 18% and 17% greater than during the fourth quarter of
2013, respectively. The production gains were achieved due to
record zinc grades and zinc and lead recoveries, further enhanced
by higher quantities of sulfide ore mined.
At Dolores, higher throughput pushed silver production to 0.95
million ounces, 3% more than in the last quarter of 2013, while
gold production rose 15% to 18,000 ounces due to higher
throughput and higher grades, which were partially offset by
lower recoveries.
As anticipated, Alamo Dorado's silver production declined 31%
from the fourth quarter of 2013 to 0.87 million ounces as a
result of treating greater amounts of low-grade stockpiled ore as
the open pit mine reaches its final stages.
For the full year 2014, the Company produced 12.43 million
silver ounces in Mexico. With its new annual production record,
La Colorada has become the Company's largest silver producer at
4.98 million ounces, followed by Dolores with 3.98 million ounces
of silver produced. Increased silver production at La Colorada
was due to higher throughput of higher-grade sulfide ores mined
using the additional equipment that has been acquired as part of
the mine's expansion project. Increased sulfide ore throughput
also had a positive effect on base metal grades and recoveries,
yielding records in annual zinc production of 7,700 tonnes and
lead production of 3,700 tonnes, 14% and 12% greater than 2013
production, respectively.
Dolores' 2014 production of 3.98 million ounces of silver and
66,800 ounces of gold benefited from the commissioning in late
2013 of the new leach pad 3. This provided unconstrained crushing
output and increased leaching surface during 2014 and resulted in
higher silver recoveries.
As expected, Alamo Dorado's annual silver production declined
32% from 2013 to 3.47 million ounces, primarily due to the
expected processing of lower grade ores and lower metal
recoveries.
Peru
During the fourth quarter of 2014, the Company's Peruvian
mines produced a total of 1.55 million ounces of silver,
practically flat year-on-year. At Huaron, silver production
increased 8% from the fourth quarter of 2013 to 0.95 million
ounces primarily due to increased throughputs.
In 2014, Huaron's silver production rose 10% from the previous
year to a record 3.63 million ounces due to increased throughput
as a result of a multi-year mine mechanization effort. The
mechanization efforts at the mine focused largely on high-grade
copper ore zones that lead to a 73% increase in copper production
to a record 5,900 tonnes, along with a 3% increase in lead
production to a record 6,000 tonnes, and zinc production of
14,200 tonnes, similar to 2013 production.
Morococha's silver production during the fourth quarter of
2014 fell 6% from the last quarter of 2013, as a result of lower
grades and recoveries, partially offset by increased throughput
rates.
Morococha produced 2.37 million ounces of silver in 2014,
slightly less than in 2013, largely due to mine sequencing into
higher-grade lead and copper ores. This resulted in a 26%
increase in lead production to 4,700 tonnes, a 52% increase in
copper production to a record 3,100 tonnes and a 4% increase in
zinc production to 15,800 tonnes in comparison to 2013
production.
Bolivia
During the quarter ended December 31, 2014, San Vicente's
silver production rose 18% from the same quarter of 2013 to a
record 1.17 million ounces, as a result of increased throughputs,
higher grades and increased recoveries. In contrast, zinc and
lead production fell 13% and 5%, respectively, primarily due to
lower grades driven by mine sequencing.
For the full year 2014, San Vicente produced 3.95 million
ounces of silver, similar to 2013's production, along with a 6%
reduction in zinc production to 5,800 tonnes and an 11% reduction
in lead production to 500 tonnes due to mine
sequencing.
Argentina
Silver production at Manantial Espejo rose 5% during the
fourth quarter of 2014, to 0.91 million ounces. The production
increase was achieved due to higher throughput as a result of
successful debottlenecking, partially offset by lower grades.
Quarterly gold production fell 20% from the fourth quarter of
2013 due to lower grades, partially offset by higher
throughput.
For the full year 2014, Manantial Espejo's silver production
rose 19% from 2013 to 3.72 million ounces and gold production
rose 16% to 70,500 ounces due to record mill throughput.
Cash Costs and All-in Sustaining Costs Per Silver Ounce
Sold
Pan American's consolidated cash costs for the
fourth quarter of 2014 were $11.92 per silver ounce, net of
by-product credits and consolidated cash costs for the full year
2014 were $11.46 per silver ounce, net of by-product credits.
This compares to adjusted cash costs of $9.85 per ounce of silver
during the fourth quarter of 2013 and $10.96 per ounce of silver,
net of by-product credits for the full year 2013. Previously
reported cash costs for the Company's Peruvian operations
overstated copper by-product credits and both consolidated annual
cash costs for 2014 and 2013, and fourth quarter 2013 cash costs
have been adjusted to correct for this overstatement. Please
refer to Note 6 under the table "Financial and Operating
Highlights" attached to this news release for further
details.
As expected, cash costs during the fourth
quarter of 2014 rose primarily on reduced grades at Alamo Dorado,
lower gold production at Manantial Espejo and lower by-product
credits due to lower by-product prices except for zinc.
Consolidated cash costs for the full year 2014 of $11.46 per
silver ounce, were well below management's full year 2014
guidance of $11.80 to $12.80 per ounce, net of by-product
credits, on account of better than expected performances at La
Colorada, Huaron and Morococha, partly offset by slightly higher
than expected cash costs at San Vicente and Manantial Espejo.
AISCSOS for the quarter and year-ended December
31, 2014 were $18.62 and $17.88, respectively, compared to $16.72
and $17.91 per ounce in the respective periods of 2013. AISCSOS
for 2014 remained similar to 2013 as lower sustaining capital and
exploration expense were offset by higher cash cost of sales, net
of by-product credits.
AISCSOS and cash costs are non-GAAP measures. Please refer to
Notes 4 and 5 under the table "Financial and Operating
Highlights" attached to this news release for further discussion
of these measures.
Sustaining and Project Capital
In 2014, Pan American spent $99.1 million in sustaining
capital at its seven mining operations. At La Colorada, the
Company spent $13.5 million, primarily on a tailings dam raise,
mine ventilation and infrastructure, and mine site
exploration.
At Dolores, the Company spent $27.6 million, mainly on open
pit pre-stripping, mine site exploration, access roads and camp
upgrades, and on mining equipment replacements.
At Huaron, Pan American spent $17.3 million to upgrade the
underground 250-level primary drainage and haulage level, to
upgrade the shaft loading pockets, mine site exploration and on a
tailings dam raise.
At Morococha, the Company spent $10.2 million mainly on mine
development and infrastructure, mine site exploration, plant
upgrades and equipment overhauls.
At San Vicente, the Company spent $3.4 million primarily on
mine infrastructure, equipment overhauls and mine site
exploration.
Finally, at Manantial Espejo, Pan American
spent $26.7 million primarily for open pit pre-stripping as well
as a tailings dam expansion and mine site exploration.
In terms of project capital, Pan American
invested $17.3 million on the La Colorada expansion of which $5.6
million were used to purchase new underground mobile mining
equipment and to advance project-related underground mine lateral
development. $5.1 million were spent on engineering work and
equipment purchases for the plant expansion, $3.4 million were
spent on new community infrastructure, $1.5 million were spent on
procurement of the new production hoist, $0.9 million were used
in camp expansions and expanded site infrastructure, and the
remainder was required to fund indirect costs.
The Company also invested $17.3 million on completing the
second phase of Dolores' pad 3 expansion. Approximately $2.0
million remain for the installation of a lime silo and conveyor
belt, which has been carried over into 2015. In addition, $1.4
million were spent on advancing the new power line design and
right-of-way acquisitions, and another $1.0 million were spent on
advancing engineering on the pulp agglomeration and underground
Preliminary Economic Assessment that was disclosed in August
2014.
2015 Outlook
As announced on January 19, 2015, Pan American
expects to maintain current production levels of between 25.50
and 26.50 million ounces of silver at cash costs of between
$10.80 and $11.80 per ounce of silver, net of by-product credits.
In addition, higher gold grades at Dolores are expected to
contribute to an increase in consolidated gold production to
between 165,000 and 175,000 ounces, (between 2% and 8% higher
than in 2014).
The Company's consolidated 2015 base metals
production is expected to total 41,000 to 43,000 tonnes of zinc,
14,500 to 15,000 tonnes of lead and 8,000 to 8,500 tonnes of
copper.
Pan American also expects to spend between $71
to $84 million on sustaining capital in 2015, while investing $98
to $109 million in long term projects, primarily for the
expansion project at La Colorada.
Perhaps most importantly, consolidated AISCSOS are expected to
decline from $17.88 in 2014 to between $15.50 and $16.50, net of
by-product credits in 2015, mainly on lower sustaining capital
expenditures and due to the above-mentioned decline in silver
cash costs. The Company's AISCSOS guidance for 2015 is based on
assumptions of exploration expenses increasing to $16.50 million,
while G&A costs and reclamation cost accretion are expected
to remain steady at $17.50 million and $3.00 million,
respectively. For the purposes of providing AISCSOS guidance for
2015, we have assumed that payable silver sold in 2015 will be
between 24.10 million and 25.10 million ounces.
About Pan American
Pan American Silver's mission is to be the world's pre-eminent
silver producer, with a reputation for excellence in discovery,
engineering, innovation and sustainable development. The Company
has seven operating mines in Mexico, Peru, Argentina and Bolivia.
Pan American also owns several development projects in the USA,
Mexico, Peru and Argentina.
Technical information contained in this news
release with respect to Pan American has been reviewed by Michael
Steinmann, P.Geo., Executive VP Corporate Development &
Geology, and Martin Wafforn, P.Eng., VP Technical Services, who
are the Company's Qualified Persons for the purposes of NI
43-101.
Pan American will host a conference call to discuss these
results on Thursday, February 19, 2015 at 1:00 pm EST (10:00 am
PST). To participate in the conference, please dial toll number
1-604-638-5340.
A live audio webcast and Power
Point presentation will be available at
http://services.choruscall.ca/links/pan150219.html
. The call and webcast will also be available for
replay for one week after the call by dialing
1-604-638-9010 and entering code # 6218 followed by the
# sign.
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NON-GAAP MEASURE CASH COSTS PER PAYABLE OUNCE, NET
OF BY-PRODUCT CREDITS
THIS NEWS RELEASE PRESENTS INFORMATION ABOUT OUR
CASH COSTS OF A PAYABLE OUNCE OF SILVER FOR OUR OPERATING
MINES. CASH COSTS PER PAYABLE OUNCE PRODUCED, NET OF BY-PRODUCT
CREDITS IS CALCULATED AS FOLLOWS:
-
EXCEPT AS OTHERWISE NOTED, CASH COSTS PER PAYABLE OUNCE
PRODUCED IS CALCULATED BY DIVIDING TOTAL CASH COSTS, NET OF
BY-PRODUCT CREDITS BY TOTAL PAYABLE SILVER OUNCES PRODUCED AT
THE RELEVANT MINE OR MINES.
-
TOTAL CASH COSTS INCLUDE MINE OPERATING COSTS SUCH AS
MINING, PROCESSING, ADMINISTRATION, ROYALTIES AND OPERATING
TAXES, BUT EXCLUDE AMORTIZATION, RECLAMATION COSTS, FINANCING
COSTS AND CAPITAL DEVELOPMENT AND EXPLORATION. CERTAIN
AMOUNTS OF STOCK-BASED COMPENSATION ARE EXCLUDED AS
WELL.
CASH COST PER PAYABLE OUNCE OF SILVER PRODUCED, NET OF
BY-PRODUCT CREDITS IS INCLUDED IN THIS NEWS RELEASE BECAUSE
CERTAIN INVESTORS USE THIS INFORMATION TO ASSESS OUR
PERFORMANCE AND ALSO TO DETERMINE OUR ABILITY TO GENERATE CASH
FLOW FOR USE IN INVESTING AND OTHER ACTIVITIES. THE INCLUSION
OF CASH COSTS PER PAYABLE OUNCE PRODUCED MAY ENABLE INVESTORS
TO BETTER UNDERSTAND YEAR-OVER-YEAR CHANGES IN OUR PRODUCTION
COSTS, WHICH IN TURN AFFECT PROFITABILITY AND CASH FLOW. CASH
COSTS PER PAYABLE OUNCE, NET OF BY-PRODUCT CREDITS DOES NOT
HAVE A STANDARDIZED MEANING OR A CONSISTENT BASIS OF
CALCULATION PRESCRIBED BY CANADIAN ACCOUNTING STANDARDS.
INVESTORS ARE CAUTIONED THAT CASH COSTS PER PAYABLE OUNCE
PRODUCED, NET OF BY-PRODUCT
CREDITS SHOULD NOT BE CONSIDERED IN ISOLATION OR CONSTRUED
AS A SUBSTITUTE TO COSTS DETERMINED IN ACCORDANCE WITH CANADIAN
ACCOUNTING STANDARDS AS PRESCRIBED UNDER IFRS AS AN INDICATOR
OF PERFORMANCE. OUR METHOD OF CALCULATING CASH COSTS PER
PAYABLE OUNCE PRODUCED, NET OF BY-PRODUCT CREDITS MAY DIFFER
FROM THE METHODS USED BY OTHER ENTITIES AND, ACCORDINGLY, OUR
CASH COSTS PER PAYABLE OUNCE PRODUCED MAY NOT BE COMPARABLE TO
SIMILARLY TITLED MEASURED USED BY OTHER ENTITIES.
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 OR INFORMATION. FORWARD-LOOKING
STATEMENTS OR INFORMATION IN THIS NEWS RELEASE RELATE TO, AMONG
OTHER THINGS: OUR FORECAST PRODUCTION OF SILVER, GOLD AND OTHER
METALS IN 2015; OUR ESTIMATED CASH COSTS PER OUNCE OF SILVER IN
2014 AND FORECAST CASH COSTS PER OUNCE OF SILVER IN 2015; OUR
ESTIMATED AISCSOS FOR 2015; OUR ANTICIPATED CAPITAL INVESTMENTS
FOR 2015; THE ABILITY OF THE COMPANY TO SUCCESSFULLY COMPLETE ANY
CAPITAL INVESTMENT PROGRAMS AND PROJECTS AND THE IMPACTS OF ANY
SUCH PROGRAMS AND PROJECTS ON THE COMPANY; AND ANY
ANTICIPATED LEVEL OF FINANCIAL AND OPERATIONAL SUCCESS IN
2015.
THESE STATEMENTS REFLECT THE COMPANY'S CURRENT VIEWS WITH
RESPECT TO FUTURE EVENTS AND ARE NECESSARILY BASED UPON A
NUMBER OF ASSUMPTIONS THAT, WHILE CONSIDERED REASONABLE BY THE
COMPANY, ARE INHERENTLY SUBJECT TO SIGNIFICANT OPERATIONAL,
BUSINESS, ECONOMIC AND REGULATORY UNCERTAINTIES AND
CONTINGENCIES. THESE ASSUMPTIONS INCLUDE: TONNAGE OF ORE
TO BE MINED AND PROCESSED; ORE GRADES AND RECOVERIES; PRICES
FOR SILVER, GOLD AND BASE METALS; CAPITAL, DECOMMISSIONING AND
RECLAMATION ESTIMATES; OUR MINERAL RESERVE AND RESOURCE
ESTIMATES AND THE ASSUMPTIONS UPON WHICH THEY ARE BASED; PRICES
FOR ENERGY INPUTS, LABOUR, MATERIALS, SUPPLIES AND SERVICES
(INCLUDING TRANSPORTATION); NO LABOUR-RELATED DISRUPTIONS AT
ANY OF OUR OPERATIONS: NO UNPLANNED DELAYS IN OR INTERRUPTIONS
IN SCHEDULED PRODUCTION; ALL NECESSARY PERMITS, LICENCES AND
REGULATORY APPROVALS FOR OUR OPERATIONS ARE RECEIVED IN A
TIMELY MANNER; AND OUR ABILITY TO COMPLY WITH ENVIRONMENTAL,
HEALTH AND SAFETY LAWS.
THE FOREGOING LIST OF ASSUMPTIONS IS NOT EXHAUSTIVE.
THE COMPANY CAUTIONS THE READER THAT
FORWARD-LOOKING STATEMENTS AND INFORMATION INVOLVE KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE
ACTUAL RESULTS AND DEVELOPMENTS TO DIFFER MATERIALLY FROM THOSE
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS OR
INFORMATION 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 SILVER, GOLD AND BASE METALS PRICES;
FLUCTUATIONS IN PRICES FOR ENERGY INPUTS, LABOUR, MATERIALS,
SUPPLIES AND SERVICES (INCLUDING TRANSPORTATION); FLUCTUATIONS IN
CURRENCY MARKETS (SUCH AS THE CANADIAN DOLLAR, PERUVIAN SOL,
MEXICAN PESO AND BOLIVIAN BOLIVIANO VERSUS THE U.S. DOLLAR);
OPERATIONAL RISKS AND HAZARDS INHERENT WITH THE BUSINESS OF
MINING (INCLUDING ENVIRONMENTAL ACCIDENTS AND HAZARDS, INDUSTRIAL
ACCIDENTS, EQUIPMENT BREAKDOWN, UNUSUAL OR UNEXPECTED GEOLOGICAL
OR STRUCTURAL FORMATIONS, CAVE-INS, FLOODING AND SEVERE WEATHER);
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; OUR ABILITY TO OBTAIN ALL NECESSARY
PERMITS, LICENSES AND REGULATORY APPROVALS IN A TIMELY
MANNER;CHANGES IN LAWS, REGULATIONS AND GOVERNMENT PRACTICES IN
THE JURISDICTIONS WHERE WE OPERATE, INCLUDING ENVIRONMENTAL,
EXPORT AND IMPORT LAWS AND REGULATIONS; DIMINISHING QUANTITIES OR
GRADES OF MINERAL RESERVES AS PROPERTIES ARE MINED; INCREASED
COMPETITION IN THE MINING INDUSTRY FOR EQUIPMENT AND QUALIFIED
PERSONNEL; 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. 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. INVESTORS ARE CAUTIONED AGAINST UNDUE RELIANCE ON
FORWARD-LOOKING STATEMENTS AND INFORMATION. FORWARD-LOOKING
STATEMENTS AND INFORMATION ARE DESIGNED TO HELP READERS
UNDERSTAND MANAGEMENT'S CURRENT VIEWS OF OUR NEAR AND LONGER TERM
PROSPECTS AND MAY NOT BE APPROPRIATE FOR OTHER PURPOSES. THE
COMPANY DOES NOT INTEND, NOR DOES IT ASSUME ANY OBLIGATION TO
UPDATE OR REVISE FORWARD-LOOKING STATEMENTS AND INFORMATION,
WHETHER AS A RESULT OF NEW INFORMATION, CHANGES IN ASSUMPTIONS,
FUTURE EVENTS OR OTHERWISE, EXCEPT TO THE EXTENT REQUIRED BY
APPLICABLE LAW.
Pan American Silver Corp
.
|
|
|
|
|
|
|
|
|
Financial & Operating
Highlights
|
|
|
|
|
|
|
|
|
|
Three
months ended
December 31,
|
Twelve months
ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Consolidated Financial
Highlights
|
|
|
|
|
|
|
|
|
(Unaudited in thousands of U.S.
Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the period
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
Loss per share attributable to
common shareholders (basic)
|
$
|
(3.48)
|
$
|
(1.94)
|
$
|
(3.60)
|
$
|
(2.94)
|
Adjusted loss for the period
(1)
|
$
|
(21,207)
|
$
|
(77,649)
|
$
|
(20,825)
|
$
|
(42,845)
|
Adjusted loss per share
attributable to common shareholders (basic)
(1)
|
$
|
(0.14)
|
$
|
(0.51)
|
$
|
(0.14)
|
$
|
(0.28)
|
Mine operating (loss)
earnings
|
$
|
(21,369)
|
$
|
18,955
|
$
|
8,073
|
$
|
131,519
|
Mine operating (loss) earnings
(Excludes NRV Adj.)
(2)
|
$
|
(19,586)
|
$
|
27,365
|
$
|
37,598
|
$
|
144,486
|
Net cash generated from operating
activities
|
$
|
823
|
$
|
46,156
|
$
|
124,188
|
$
|
119,606
|
Net cash generated from operating
activities per share
|
$
|
0.01
|
$
|
0.30
|
$
|
0.82
|
$
|
0.79
|
Capital spending
|
$
|
30,131
|
$
|
33,669
|
$
|
131,761
|
$
|
159,401
|
Dividends paid
|
$
|
18,933
|
$
|
18,881
|
$
|
75,751
|
$
|
75,755
|
Shares repurchased
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
6,740
|
Cash and short-term
investments
|
$
|
330,413
|
$
|
422,722
|
$
|
330,413
|
$
|
422,722
|
Working capital
(3)
|
$
|
522,655
|
$
|
689,032
|
$
|
522,655
|
$
|
689,032
|
|
|
|
|
|
|
|
|
|
Consolidated Metals
Recovered
|
|
|
|
|
|
|
|
|
Silver metal - million
ounces
|
|
6.75
|
|
6.80
|
|
26.11
|
|
25.96
|
Gold metal - thousand
ounces
|
|
43.9
|
|
46.2
|
|
161.5
|
|
149.8
|
Zinc metal - thousand
tonnes
|
|
10.2
|
|
11.3
|
|
43.5
|
|
42.1
|
Lead metal - thousand
tonnes
|
|
3.9
|
|
3.5
|
|
15.0
|
|
13.5
|
Copper metal - thousand
tonnes
|
|
3.0
|
|
1.7
|
|
9.0
|
|
5.5
|
|
|
|
|
|
|
|
|
|
Average Price
|
|
|
|
|
|
|
|
|
Silver metal ($/oz)
|
$
|
16.50
|
$
|
20.82
|
$
|
19.08
|
$
|
23.79
|
Gold metal ($/oz)
|
$
|
1,201
|
$
|
1,276
|
$
|
1,266
|
$
|
1,411
|
|
|
|
|
|
|
|
|
|
Consolidated Costs per Ounce of Silver (net of
by-product credits)
(4)
|
|
|
|
|
|
|
Cash cost per payable ounce
produced
|
$
|
11.92
|
$
|
9.85
(6)
|
$
|
11.46
(6)
|
$
|
10.96
(6)
|
Total production cost per payable
ounce produced
|
$
|
18.62
|
$
|
14.86
|
$
|
17.80
|
$
|
16.71
|
Payable ounces of silver produced
million ounces
|
|
6.34
|
|
6.42
|
|
24.66
|
|
24.58
|
|
|
|
|
|
|
|
|
|
All-in Sustaining Cost per Silver
Ounce Sold
(5)
|
$
|
18.62
|
$
|
16.72
|
$
|
17.88
|
$
|
17.91
|
All-in Sustaining Cost per Silver
Ounce Sold (Excludes NRV Adjustment)
|
$
|
18.27
|
$
|
15.41
|
$
|
16.71
|
$
|
17.40
|
Payable ounces of silver sold
million ounces
|
|
6.35
|
|
6.44
|
|
25.43
|
|
25.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Adjusted loss and adjusted loss
per share attributable to common shareholders are
Non-GAAP measures. Adjusted (loss)
earnings is calculated as net (loss) earnings for the
period adjusting for the gains or losses recorded on
fair market value adjustments on the
Company's outstanding derivative instruments,
impairment of mineral property, unrealized foreign
exchange gains or losses, unrealized gain or loss
on commodity contracts, net realizable value adjustment
to long term heap inventory, gain or loss on sale of
assets and the effect for taxes on the
above items. The Company considers this measure to
better reflect normalized earnings as it does not
include items which may be volatile from period
to period.
|
|
|
|
|
Three months ended December
31,
|
Twelve months ended December
31,
|
Adjusted Loss
Reconciliation
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Net (loss) earnings for the
period
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
Adjust derivative losses
(gains)
|
|
252
|
|
(1,249)
|
|
(1,348)
|
|
(16,715)
|
|
Adjust gain on sale of mineral
properties
|
|
(945)
|
|
(5,969)
|
|
(1,145)
|
|
(14,068)
|
|
Adjust unrealized foreign exchange
(gains) losses
|
|
(618)
|
|
(656)
|
|
4,034
|
|
(922)
|
|
Adjust net realizable value of
inventory
|
|
10,982
|
|
10,281
|
|
36,578
|
|
10,281
|
|
Adjust realized losses
(gains) on silver and gold hedge program
|
|
-
|
|
(1,127)
|
|
-
|
|
5,127
|
|
Adjust realized and
unrealized losses on commodity contracts
|
|
-
|
|
260
|
|
-
|
|
25
|
|
Adjust severance and acquisition
costs
|
|
-
|
|
-
|
|
-
|
|
617
|
|
Adjust write-down of mining
assets
|
|
596,262
|
|
336,785
|
|
596,262
|
|
540,228
|
|
Adjust for effect of taxes on
above items
|
|
(101,413)
|
|
(122,910)
|
|
(110,383)
|
|
(121,572)
|
|
Adjusted loss for the
period
|
$
|
(21,207)
|
$
|
(77,649)
|
$
|
(20,825)
|
$
|
(42,845)
|
|
Weighted average shares for the
period
|
|
151,534
|
|
151,428
|
|
151,511
|
|
151,501
|
|
Adjusted loss per share for the
period
|
$
|
(0.14)
|
$
|
(0.51)
|
$
|
(0.14)
|
$
|
(0.28)
|
|
|
|
|
|
|
|
|
|
(2)
|
Mine operating loss excluding NRV
Adjustment is a Non-GAAP measure. The Company uses this
measure to reflect the real cost of production
by removing the effects of short term and volatile
commodity price fluctuations.
|
(3)
|
Working capital 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.
|
(4)
|
Consolidated cost per ounce of
silver is a non-GAAP measure. The Company believes that
in addition to production costs, depreciation and
amortization, and
royalties, cash cost per ounce is a useful and
complementary benchmark that investors use to evaluate
the Company's performance and ability to generate
cash flows and is well understood and widely reported
in the silver mining industry. However, cash cost 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.
|
(5)
|
The Company has adopted the
reporting of All-In Sustaining Costs per Silver Ounce
Sold ("AISCSOS") as a measure of a silver mining
company's consolidated
operating performance and the ability to generate cash
flow from all operations collectively. We believe it is
a more comprehensive measure of the cost of
operating our consolidated business than traditional
cash and total costs per 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.
|
(6)
|
Previously reported cash costs for
the Company's Peruvian operations overstated copper
by-product credits. Both consolidated and Peruvian annual
cash costs
for 2014 and 2013 have been adjusted to correct for this
overstatement. The effect of these corrections on 2014's
annual cash costs was as follows: a $0.50 per
ounce increase to consolidated cash costs (2013 - $0.15);
a $2.87 per ounce increase to Huaron cash costs (2013 -
$0.85); and a $1.72 per ounce increase to
Morococha cash costs (2013 - $0.58). The fourth quarter
2013 cash costs have also been adjusted to correct for
this overstatement. The effect of these corrections
on the fourth quarter of 2013's cash costs was as
follows: a $0.29 per ounce increase to consolidated cash
costs; a $1.74 per ounce increase to Huaron cash costs
and a $1.02 per ounce increase to Morococha cash
costs.
|
Pan American Silver
Corp.
|
Consolidated Statements of
Financial Position
|
As at December 31, 2014 and
2013
|
(Unaudited in thousands of U.S.
dollars)
|
|
|
December 31,
2014
|
December 31,
2013
|
|
Assets
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
146,193
|
$
|
249,937
|
Short-term investments
|
|
|
184,220
|
|
172,785
|
Trade and other
receivables
|
|
|
105,644
|
|
114,782
|
Income taxes receivable
|
|
|
37,626
|
|
40,685
|
Inventories
|
|
|
252,549
|
|
284,352
|
Prepaids and other current
assets
|
|
|
4,464
|
|
9,123
|
|
|
|
730,696
|
|
871,664
|
Non-current assets
|
|
|
|
|
|
Mineral property, plant and
equipment,
|
|
|
1,266,391
|
|
1,870,678
|
Long-term refundable tax
|
|
|
7,698
|
|
9,801
|
Deferred tax assets
|
|
|
2,584
|
|
165
|
Other assets
|
|
|
7,447
|
|
8,014
|
Goodwill
|
|
|
3,057
|
|
7,134
|
Total Assets
|
|
$
|
2,017,873
|
$
|
2,767,456
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Accounts payable and accrued
liabilities
|
|
$
|
126,209
|
$
|
125,609
|
Loan payable
|
|
|
17,600
|
|
20,095
|
Current portion long term
debt
|
|
|
34,797
|
|
-
|
Provisions
|
|
|
3,121
|
|
3,172
|
Current portion of finance
lease
|
|
|
3,993
|
|
4,437
|
Current income tax
liabilities
|
|
|
22,321
|
|
29,319
|
|
|
|
208,041
|
|
182,632
|
Non-current liabilities
|
|
|
|
|
|
Provisions
|
|
|
45,063
|
|
43,817
|
Deferred tax liabilities
|
|
|
160,072
|
|
285,947
|
Share purchase warrants
|
|
|
-
|
|
207
|
Long-term portion of finance
lease
|
|
|
4,044
|
|
5,717
|
Long-term debt
|
|
|
-
|
|
34,302
|
Other long-term liabilities
|
|
|
30,716
|
|
26,045
|
Total Liabilities
|
|
|
447,936
|
|
578,667
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
|
Issued capital
|
|
2,296,672
|
|
2,295,208
|
Share option reserve
|
|
|
22,091
|
|
21,110
|
Investment revaluation
reserve
|
|
|
(485)
|
|
(137)
|
Retained (deficit) earnings
|
|
|
(755,186)
|
|
(133,847)
|
Total Equity attributable to
equity holders of the Company
|
|
1,563,092
|
|
2,182,334
|
Non-controlling interests
|
|
6,845
|
|
6,455
|
Total Equity
|
|
1,569,937
|
|
2,188,789
|
Total Liabilities and
Equity
|
$
|
2,017,873
|
$
|
2,767,456
|
|
|
Pan American Silver
Corp.
Consolidated Income
Statements
|
(Unaudited in thousands of U.S.
dollars, except for share and per share amounts)
|
|
|
Three months ended
December 31,
|
Twelve months ended
December 31,
|
|
2014
|
2013
|
2014
|
2013
|
Revenue
|
$
|
163,096
|
$
|
192,360
|
$
|
751,942
|
$
|
824,504
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
Production costs
|
|
(140,695)
|
|
(136,223)
|
|
(568,204)
|
|
(530,613)
|
|
Depreciation and
amortization
|
|
(38,493)
|
|
(31,612)
|
|
(147,710)
|
|
(135,913)
|
|
Royalties
|
|
(5,277)
|
|
(5,570)
|
|
(27,955)
|
|
(26,459)
|
|
|
(184,465)
|
|
(173,405)
|
|
(743,869)
|
|
(692,985)
|
Mine operating (loss)
earnings
|
$
|
(21,369)
|
$
|
18,955
|
$
|
8,073
|
$
|
131,519
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
(3,051)
|
|
(2,602)
|
|
(17,908)
|
|
(17,596)
|
Exploration and project
development
|
|
(4,278)
|
|
(990)
|
|
(13,225)
|
|
(15,475)
|
Impairment charge
|
|
(596,262)
|
|
(336,785)
|
|
(596,262)
|
|
(540,228)
|
Foreign exchange losses
|
|
(4,486)
|
|
(5,958)
|
|
(13,275)
|
|
(14,637)
|
Gains (losses) on commodity and
foreign currency contracts
|
|
-
|
|
1,049
|
|
-
|
|
(4,551)
|
Gain on sale of assets
|
|
945
|
|
5,969
|
|
1,145
|
|
14,068
|
Other income and expenses
|
|
(1,583)
|
|
10,210
|
|
(1,314)
|
|
8,287
|
Loss from continuing
operations
|
|
(630,084)
|
|
(310,152)
|
|
(632,766)
|
|
(438,613)
|
|
|
|
|
|
|
|
|
|
(Loss) gain on derivatives
|
|
(252)
|
|
1,249
|
|
1,348
|
|
16,715
|
Investment income (loss)
|
|
568
|
|
(592)
|
|
2,840
|
|
3,086
|
Interest and finance
expense
|
|
(1,277)
|
|
(2,902)
|
|
(8,739)
|
|
(10,277)
|
Loss before income taxes
|
|
(631,045)
|
|
(312,397)
|
|
(637,317)
|
|
(429,089)
|
Income tax recovery
(expense)
|
|
105,318
|
|
19,333
|
|
92,494
|
|
(16,757)
|
Net loss for the period
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
$
|
(526,706)
|
$
|
(293,615)
|
$
|
(545,588)
|
$
|
(445,851)
|
|
Non-controlling interests
|
|
979
|
|
551
|
|
765
|
|
5
|
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share attributable to
common shareholders
|
|
|
|
|
|
|
|
Basic loss per share
|
$
|
(3.48)
|
$
|
(1.94)
|
$
|
(3.60)
|
$
|
(2.94)
|
Diluted loss per share
|
$
|
(3.48)
|
$
|
(1.94)
|
$
|
(3.60)
|
$
|
(2.96)
|
Weighted average shares
outstanding (in 000's) Basic
|
|
151,534
|
|
151,428
|
|
151,511
|
|
151,501
|
Weighted average shares
outstanding (in 000's) Diluted
|
|
151,534
|
|
151,428
|
|
151,511
|
|
153,430
|
|
|
Consolidated Statements of
Comprehensive Income
|
(unaudited in thousands of U.S.
dollars)
|
|
Three months ended
December 31,
|
Twelve months ended
December 31,
|
|
2014
|
2013
|
2014
|
2013
|
Net loss for the period
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
|
|
|
|
|
|
|
|
|
Unrealized net loss on available
for sale securities
(net of zero dollars tax)
|
|
(485)
|
|
(1,953)
|
|
(1,428)
|
|
(2,163)
|
Reclassification adjustment for
net loss included in earnings
|
|
319
|
|
2,775
|
|
1,081
|
|
1,062
|
Total comprehensive loss for
the period
|
$
|
(525,893)
|
$
|
(292,242)
|
$
|
(545,170)
|
$
|
(446,947)
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the
Company
|
$
|
(526,872)
|
$
|
(292,793)
|
$
|
(545,935)
|
$
|
(446,952)
|
Non-controlling interests
|
|
979
|
|
551
|
|
765
|
|
5
|
|
$
|
(525,893)
|
$
|
(292,242)
|
$
|
(545,170)
|
$
|
(446,947)
|
Pan American Silver Corp
.
|
|
|
|
Consolidated Statements of Cash
Flows
|
|
|
|
(Unaudited in thousands of U.S.
dollars)
|
|
|
|
|
|
Three months ended
|
Twelve months ended
|
|
|
December 31,
|
December 31,
|
|
|
2014
|
2013
|
2014
|
2013
|
Cash flow from operating
activities
|
|
|
|
|
|
|
|
|
Net loss earnings for the
year
|
$
|
(525,727)
|
$
|
(293,064)
|
$
|
(544,823)
|
$
|
(445,846)
|
|
|
|
|
|
|
|
|
|
Current income taxes
expense
|
|
10,136
|
|
12,523
|
|
35,808
|
|
55,691
|
Deferred income tax
recovery
|
|
(115,454)
|
|
(31,856)
|
|
(128,302)
|
|
(38,934)
|
Depreciation and
amortization
|
|
38,493
|
|
31,612
|
|
147,710
|
|
135,913
|
Impairment charge
|
|
596,262
|
|
336,785
|
|
596,262
|
|
540,228
|
Accretion on closure and
decommissioning provision
|
|
809
|
|
757
|
|
3,238
|
|
3,030
|
Unrealized (gains) losses on
foreign exchange
|
|
(618)
|
|
(656)
|
|
4,034
|
|
(922)
|
Share-based compensation
expense
|
|
504
|
|
67
|
|
2,529
|
|
2,173
|
Unrealized (gains) losses on
commodity contracts
|
|
-
|
|
(1,800)
|
|
-
|
|
25
|
Loss (gain) on derivatives
|
|
252
|
|
(1,249)
|
|
(1,348)
|
|
(16,715)
|
Gain on sale of assets
|
|
(945)
|
|
(5,969)
|
|
(1,145)
|
|
(14,068)
|
Net realizable value adjustment
for inventory
|
|
2,212
|
|
8,410
|
|
29,953
|
|
12,967
|
Changes in non-cash operating
working capital
|
|
4,209
|
|
12,956
|
|
16,669
|
|
(14,640)
|
Operating cash flows before
interest and income taxes
|
|
10,133
|
|
68,516
|
|
160,585
|
|
218,902
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
(1,868)
|
|
(309)
|
|
(5,051)
|
|
(3,425)
|
Interest received
|
|
249
|
|
80
|
|
1,792
|
|
2,138
|
Income taxes paid
|
|
(7,691)
|
|
(22,131)
|
|
(33,138)
|
|
(98,009)
|
Net cash generated from
operating activities
|
|
823
|
|
46,156
|
|
124,188
|
|
119,606
|
|
|
|
|
|
|
|
|
|
Cash flow from investing
activities
|
|
|
|
|
|
|
|
|
Payments for mineral property,
plant and equipment
|
|
(30,131)
|
|
(33,669)
|
|
(131,761)
|
|
(159,401)
|
Proceeds (Purchase) of short term
investments
|
|
33,672
|
|
41,187
|
|
(13,524)
|
|
19,920
|
Proceeds from sale of mineral
property, plant and equipment
|
|
1,378
|
|
5,476
|
|
1,852
|
|
13,681
|
Refundable tax and other asset
expenditures
|
|
1,449
|
|
371
|
|
187
|
|
452
|
Net cash generated (used) in
investing activities
|
|
6,368
|
|
13,365
|
|
(143,246)
|
|
(125,348)
|
|
|
|
|
|
|
|
|
|
Cash flow from financing
activities
|
|
|
|
|
|
|
|
|
Proceeds from issue of equity
shares
|
|
3
|
|
-
|
|
3
|
|
-
|
Shares repurchased and
cancelled
|
|
-
|
|
-
|
|
-
|
|
(6,740)
|
Dividends paid
|
|
(18,933)
|
|
(18,881)
|
|
(75,751)
|
|
(75,755)
|
Payment of Proceeds from short
term loan
|
|
(444)
|
|
4,870
|
|
(2,438)
|
|
23,496
|
Payments of construction and
equipment leases
|
|
(1,544)
|
|
(2,554)
|
|
(5,347)
|
|
(30,238)
|
Net distributions to
non-controlling interests
|
|
-
|
|
(621)
|
|
(375)
|
|
(925)
|
Net cash used in financing
activities
|
|
(20,918)
|
|
(17,186)
|
|
(83,908)
|
|
(90,162)
|
Effects of exchange rate changes
on cash
|
|
(62)
|
|
(24)
|
|
(778)
|
|
(367)
|
Net (decrease) increase in
cash
|
|
(13,789)
|
|
42,311
|
|
(103,744)
|
|
(96,271)
|
Cash at the beginning of the
period
|
|
159,982
|
|
207,626
|
|
249,937
|
|
346,208
|
Cash at the end of the
period
|
$
|
146,193
|
$
|
249,937
|
$
|
146,193
|
$
|
249,937
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow
Information
|
|
|
|
|
|
|
|
|
Significant Non-Cash
Items
|
|
|
|
|
|
|
|
|
Contracted other equipment
acquired by leases
|
$
|
636
|
$
|
331
|
$
|
3,230
|
$
|
3,331
|
Stock compensation issued to
employees and directors
|
$
|
1,389
|
$
|
971
|
$
|
1,461
|
$
|
1,035
|
...
Mine Operations Highlights
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
La Colorada
|
|
|
|
|
|
|
|
|
Tonnes milled - kt
|
|
119.7
|
|
117.7
|
|
471.3
|
|
448.7
|
Average silver grade grams per
tonne
|
|
373
|
|
366
|
|
366
|
|
352
|
Average silver recovery - %
|
|
89.7
|
|
89.9
|
|
89.8
|
|
89.9
|
Silver koz
|
|
1,286
|
|
1,246
|
|
4,979
|
|
4,566
|
Gold koz
|
|
0.72
|
|
0.68
|
|
2.57
|
|
2.58
|
Zinc kt
|
|
2.19
|
|
1.86
|
|
7.70
|
|
6.76
|
Lead kt
|
|
1.02
|
|
0.87
|
|
3.74
|
|
3.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per ounce of silver
net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce net of
by-products
(2)
|
$
|
7.57
|
$
|
8.20
|
$
|
8.14
|
$
|
9.43
|
Total cost per ounce net of
by-products
(2)
|
$
|
9.54
|
$
|
10.09
|
$
|
10.09
|
$
|
11.27
|
|
|
|
|
|
|
|
|
|
Payable silver koz
|
|
1,202
|
|
1,191
|
|
4,756
|
|
4,365
|
|
|
|
|
|
|
|
|
|
Sustaining Capital Expenditures -
thousands
|
$
|
1,488
|
$
|
2,250
|
$
|
13,476
|
$
|
13,574
|
|
|
|
|
|
|
|
|
|
Dolores
|
|
|
|
|
|
|
|
|
Tonnes milled - kt
|
|
1,611.9
|
|
1,223.2
|
|
6,053.9
|
|
5.351.9
|
Average silver grade grams per
tonne
|
|
42
|
|
45
|
|
40
|
|
48
|
Average gold grade grams per
tonne
|
|
0.48
|
|
0.43
|
|
0.44
|
|
0.46
|
Average silver recovery - %
|
|
44.2
|
|
51.9
|
|
51.8
|
|
42.7
|
Average gold recovery - %
|
|
72.6
|
|
91.3
|
|
78.3
|
|
82.1
|
Silver koz
|
|
954
|
|
922
|
|
3,982
|
|
3,503
|
Gold koz
|
|
17.99
|
|
15.60
|
|
66.82
|
|
65.23
|
|
|
|
|
|
|
|
|
|
Cash cost per ounce of silver
net of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce net of
by-products
(2)
|
$
|
12.99
|
$
|
13.77
|
$
|
12.94
|
$
|
7.47
|
Total cost per ounce net of
by-products
(2)
|
$
|
31.22
|
$
|
23.57
|
$
|
27.39
|
$
|
20.12
|
|
|
|
|
|
|
|
|
|
Payable silver koz
|
|
951
|
|
920
|
|
3,969
|
|
3,494
|
|
|
|
|
|
|
|
|
|
Sustaining Capital Expenditures -
thousands
|
$
|
7,962
|
$
|
10,411
|
$
|
27,632
|
$
|
36,159
|
|
|
|
|
|
|
|
|
|
Alamo Dorado
|
|
|
|
|
|
|
|
|
Tonnes milled - kt
|
|
481.4
|
|
460.0
|
|
1,763.0
|
|
1,790.3
|
Average silver grade grams per
tonne
|
|
63
|
|
98
|
|
75
|
|
101
|
Average gold grade grams per
tonne
|
|
0.40
|
|
0.41
|
|
0.37
|
|
0.36
|
Average silver recovery - %
|
|
83.8
|
|
83.8
|
|
81.4
|
|
87.1
|
Silver koz
|
|
865
|
|
1,239
|
|
3,473
|
|
5,079
|
Gold koz
|
|
5.67
|
|
5.94
|
|
17.56
|
|
17.60
|
Copper kt
|
|
10
|
|
50
|
|
30
|
|
120
|
|
|
|
|
|
|
|
|
|
Cash cost per ounce of silver net
of by-product credits
|
|
|
|
|
|
|
|
|
Cash cost per ounce net of
by-products
(2)
|
$
|
14.07
|
$
|
8.81
|
$
|
12.89
|
$
|
7.45
|
Total cost per ounce net of
by-products
(2)
|
$
|
16.96
|
$
|
11.81
|
$
|
16.28
|
$
|
10.98
|
|
|
|
|
|
|
|
|
|
Payable silver - koz
|
|
859
|
|
1,228
|
|
3,454
|
|
5,043
|
|
|
|
|
|
|
|
|
|
Sustaining Capital Expenditures -
thousands
|
$
|
67
|
$
|
542
|
$
|
293
|
$
|
7,621
|
|
|
|
|
|
|
|
|
|
Huaron
|
|
|
|
|
|
|
|
|
Tonnes milled - kt
|
|
236.8
|
|
218.7
|
892.8
802.3
Average silver grade – grams per tonne
157
154
154
158
Average zinc grade - %
2.34
2.36
2.41
2.53
Average silver recovery - %
82.5
81.8
83.2
81.8
Silver – koz
952
885
3,635
3,304
Gold – koz
0.30
0.26
1.16
0.94
Zinc – kt
3.37
3.51
14.20
14.02
Lead – kt
1.63
1.49
6.03
5.84
Copper – kt
1.71
0.99
5.88
3.39
Cash cost per ounce of silver net of by-product credits
Cash cost per ounce net of by-products (2) (3)
$
12.22
$
14.65
$
11.56
$
15.46
Total cost per ounce net of by-products (2)
$
16.16
$
18.77
$
15.54
$
19.51
Payable silver - koz
818
760
3,120
2,879
Sustaining Capital Expenditures - thousands
$
4,970
$
3,019
$
17,327
$
15,474
Morococha
Tonnes milled - kt
148.9
143.0
566.3
573.3
Average silver grade – grams per tonne
145
161
152
149
Average zinc grade - %
3.09
3.70
3.60
3.20
Average silver recovery - %
86.69
88.1
86.39
87.9
Silver – koz
603
643
2,370
2,397
Gold – koz
0.91
0.91
2.92
2.65
Zinc – kt
3.29
4.31
15.80
15.16
Lead – kt
1.10
0.94
4.74
3.77
Copper – kt
1.26
0.65
3.08
2.03
Cash cost per ounce of silver net of by-product credits
Cash cost per ounce net of by-products (2) (3)
$
12.53
$
12.97
$
13.22
$
18.14
Total cost per ounce net of by-products (2)
$
21.38
$
21.49
$
22.23
$
26.76
Payable silver - koz
516
543
2,010
2,046
Sustaining Capital Expenditures - thousands
$
3,149
$
2,822
$
10,199
$
18,652
San Vicente
Tonnes milled - kt
85.1
79.7
316.0
319.4
Average silver grade – grams per tonne
454
415
417
412
Average zinc grade - %
2.10
2.58
2.37
2.48
Average silver recovery - %
94.5
93.4
93.2
93.8
Silver – koz
1,172
994
3,949
3,967
Zinc – kt
1.38
1.59
5.84
6.20
Lead – kt
0.16
0.17
0.50
0.56
Cash cost per ounce of silver net of by-product credits
Cash cost per ounce net of by-products (2)
$
11.88
$
14.53
$
13.16
$
15.51
Total cost per ounce net of by-products (2)
$
13.84
$
17.05
$
15.36
$
18.07
Payable silver - koz
1,084
907
3,636
3,614
Sustaining Capital Expenditures - thousands
$
992
$
1,864
$
3,415
$
8,165
Manantial Espejo
Tonnes milled - kt
210.4
191.4
796.9
719.6
Average silver grade – grams per tonne
144
159
157
150
Average gold grade – grams per tonne
2.86
4.16
2.82
2.81
Average silver recovery - %
92.0
91.6
92.1
91.3
Average gold recovery - %
94.8
96.2
95.2
95.4
Silver – koz
913
871
3,725
3,144
Gold – koz
18.27
22.83
70.47
60.82
Cash cost per ounce of silver net of by-product credits
Cash cost per ounce net of by-products (2)
$
13.93
$
(1.58)
$
10.12
$
8.55
Total cost per ounce net of by-products (2)
$
25.36
$
6.67
$
20.76
$
19.03
Payable silver - koz
911
869
3,717
3,138
Sustaining Capital Expenditures - thousands
$
5,543
$
4,362
$
26,741
$
12,002
(1)
|
Reported metal figures in the tables in this section are quantities of metal produced.
|
(2)
|
Cash costs per ounce and total costs per ounce are non-GAAP measurements. Please refer to section Alternative Performance (Non-GAAP) Measures for a
detailed reconciliation of these measures to our cost of sales.
|
(3)
|
Please refer to note (6) under "Financial & Operating Highlights" table.
|
Total Cash Costs and Total Production Costs per Ounce of Payable Silver, net of by-product credits (1)
|
(Unaudited in thousands of U.S. dollars)
|
|
|
Three months ended
December 31,
|
Twelve months ended
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Production costs
|
|
$
|
140,695
|
$
|
136,223
|
$
|
568,204
|
$
|
530,613
|
Add/(Subtract)
|
|
|
|
|
|
|
|
|
|
Royalties
|
|
|
5,277
|
|
5,570
|
|
27,955
|
|
26,459
|
Smelting, refining, and transportation charges
|
|
|
21,195
|
|
19,767
|
|
76,968
|
|
76,547
|
Worker's participation and voluntary payments
|
|
|
113
|
|
(531)
|
|
(484)
|
|
(1,067)
|
Change in inventories
|
|
|
8,966
|
|
4,050
|
|
15,835
|
|
(624)
|
Other
|
|
|
(1,461)
|
|
1,311
|
|
(5,653)
|
|
(5,408)
|
Non-controlling interests (2)
|
|
|
(1,204)
|
|
(1,239)
|
|
(4,746)
|
|
(5,967)
|
Metal Inventory write-down
|
|
|
(2,212)
|
|
(8,411)
|
|
(29,953)
|
|
(12,967)
|
Cash Operating Costs before by-product credits
|
|
|
171,369
|
|
156,740
|
|
648,126
|
|
607,586
|
|
|
|
|
|
|
|
|
|
|
Less gold credit
|
|
|
(51,794)
|
|
(57,882)
|
|
(201,317)
|
|
(205,204)
|
Less zinc credit
|
|
|
(19,676)
|
|
(18,680)
|
|
(81,357)
|
|
(69,688)
|
Less lead credit
|
|
|
(7,412)
|
|
(7,079)
|
|
(29,903)
|
|
(27,694)
|
Less copper credit
|
|
|
(16,935)
|
|
(9,872)
|
|
(52,856)
|
|
(35,609)
|
Cash Operating Costs net of by-product credits
|
A
|
|
75,554
|
|
63,228
|
|
282,693
|
|
269,391
|
|
|
|
|
|
|
|
|
|
|
Add/(Subtract)
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
38,493
|
|
31,612
|
|
147,710
|
|
135,913
|
Closure and decommissioning provision
|
|
|
809
|
|
758
|
|
3,238
|
|
3,030
|
Change in inventories
|
|
|
3,712
|
|
525
|
|
7,422
|
|
5,451
|
Other
|
|
|
-
|
|
(248)
|
|
-
|
|
(971)
|
Non-controlling interests (2)
|
|
|
(493)
|
|
(494)
|
|
(1,938)
|
|
(2,109)
|
Total Production Costs net of by-product credits (1)
|
B
|
$
|
118,072
|
$
|
95,381
|
$
|
439,124
|
$
|
410,706
|
|
|
|
|
|
|
|
|
|
|
Payable Silver Production (koz)
|
C
|
|
6,340.4
|
|
6,419.1
|
|
24,663.4
|
|
24,578.5
|
Cash Costs per ounce net of by-product credits
|
(A*$1000)/C
|
$
|
11.92
|
$
|
9.85 (3)
|
$
|
11.46 (3)
|
$
|
10.96 (3)
|
Total Production Costs per ounce net of by-product credits
|
(B*$1000)/C
|
$
|
18.62
|
$
|
14.86
|
$
|
17.80
|
$
|
16.71
|
(1)
|
Figures in this table and in the associated tables below may not add due to rounding.
|
(2)
|
Figures presented in the reconciliation table above are on a 100% basis as presented in the statements with an adjustment line item to account for the portion
of the Morococha and San Vicente mines owned by non-controlling interests, an expense item not included in operating cash costs. The associated tables below
are for the Company's share of ownership only.
|
(3)
|
Please refer to note (6) under "Financial & Operating Highlights" table.
|
|
Three months ended December 31, 2014
|
|
|
|
La
Colorada
|
|
Dolores
|
|
Alamo
Dorado
|
|
Huaron
|
|
Morococha
|
|
San
Vicente
|
|
Manantial
Espejo
|
Consolidated
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
Cash Costs before by-product credits
|
A
|
$
|
15,824
|
$
|
33,909
|
$
|
18,896
|
$
|
29,001
|
|
22,046
|
$
|
15,736
|
$
|
34,500
|
$
|
169,913
|
|
Less gold credit
|
b1
|
$
|
(681)
|
$
|
(21,555)
|
$
|
(6,775)
|
$
|
(36)
|
$
|
(798)
|
$
|
(67)
|
$
|
(21,812)
|
$
|
(51,724)
|
|
Less zinc credit
|
b2
|
$
|
(4,154)
|
$
|
-
|
$
|
-
|
$
|
(6,177)
|
$
|
(6,110)
|
$
|
(2,586)
|
$
|
-
|
$
|
(19,028)
|
|
Less lead credit
|
b3
|
$
|
(1,897)
|
$
|
-
|
$
|
-
|
$
|
(3,049)
|
$
|
(2,069)
|
$
|
(211)
|
$
|
-
|
$
|
(7,227)
|
|
Less copper credit
|
b4
|
$
|
-
|
$
|
-
|
$
|
(32)
|
$
|
(9,746)
|
$
|
(6,604)
|
$
|
-
|
$
|
-
|
$
|
(16,382)
|
Sub-total by-product credits(1)
|
B=( b1+
b2+ b3+ b4)
|
$
|
(6,731)
|
$
|
(21,555)
|
$
|
(6,807)
|
$
|
(19,009)
|
$
|
(15,581)
|
$
|
(2,864)
|
$
|
(21,812)
|
$
|
(94,360)
|
Cash Costs net of by-product
credits (1)
|
C=(A+B)
|
$
|
9,093
|
$
|
12,354
|
$
|
12,089
|
$
|
9,993
|
$
|
6,465
|
$
|
12,872
|
$
|
12,688
|
$
|
75,553
|
Depreciation, amortization & reclamation
|
D
|
$
|
2,371
|
$
|
17,337
|
$
|
2,484
|
$
|
3,223
|
$
|
4,566
|
$
|
2,131
|
$
|
10,414
|
$
|
42,526
|
Total production costs net of by-product credits (1)
|
E=(C+D)
|
$
|
11,464
|
$
|
29,691
|
$
|
14,573
|
$
|
13,216
|
$
|
11,031
|
$
|
15,003
|
$
|
23,102
|
$
|
118,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable ounces of silver (koz)
|
F
|
|
1,202
|
|
951
|
|
859
|
|
818
|
|
516
|
|
1,084
|
|
911
|
|
6,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per Ounce of Silver net of by-product credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash cost per ounce net of by-products
|
=C/F
|
$
|
7.57
|
$
|
12.99
|
$
|
14.07
|
$
|
12.22
|
$
|
12.53
|
$
|
11.88
|
$
|
13.93
|
$
|
11.92
|
Total production cost per ounce net of by-products
|
=E/F
|
$
|
9.54
|
$
|
31.22
|
$
|
16.96
|
$
|
16.16
|
$
|
21.38
|
$
|
13.84
|
$
|
25.36
|
$
|
18.62
|
|
Twelve months ended December 31, 2014
|
|
|
|
La
Colorada
|
|
Dolores
|
|
Alamo
Dorado
|
|
Huaron
|
|
Morococha
|
|
San
Vicente
|
|
Manantial
Espejo
|
Consolidated
Total
|
Cash Costs before by-product credits
|
A
|
$
|
62,635
|
$
|
135,665
|
$
|
66,727
|
$
|
107,990
|
$
|
83,915
|
$
|
59,287
|
$
|
126,500
|
$
|
642,720
|
|
Less gold credit
|
b1
|
$
|
(2,534)
|
$
|
(84,317)
|
$
|
(22,048)
|
$
|
(295)
|
$
|
(2,730)
|
$
|
(254)
|
$
|
(88,898)
|
$
|
(201,075)
|
|
Less zinc credit
|
b2
|
$
|
(14,128)
|
$
|
-
|
$
|
-
|
$
|
(25,414)
|
$
|
(28,381)
|
$
|
(10,504)
|
$
|
-
|
$
|
(78,426)
|
|
Less lead credit
|
b3
|
$
|
(7,265)
|
$
|
-
|
$
|
-
|
$
|
(11,817)
|
$
|
(9,340)
|
$
|
(663)
|
$
|
-
|
$
|
(29,086)
|
|
Less copper credit
|
b4
|
$
|
-
|
$
|
-
|
$
|
(164)
|
$
|
(34,394)
|
$
|
(16,884)
|
$
|
-
|
$
|
-
|
$
|
(51,442)
|
Sub-total by-product credits(1)
|
B=( b1+
b2+ b3+ b4)
|
$
|
(23,927)
|
$
|
(84,317)
|
$
|
(22,212)
|
$
|
(71,920)
|
$
|
(57,335)
|
$
|
(11,420)
|
$
|
(88,898)
|
$
|
(360,028)
|
Cash Costs net of by-product
credits (1)
|
C=(A+B)
|
$
|
38,708
|
$
|
51,347
|
$
|
44,516
|
$
|
36,070
|
$
|
26,581
|
$
|
47,867
|
$
|
37,602
|
$
|
282,692
|
Depreciation, amortization & reclamation
|
D
|
$
|
9,278
|
$
|
57,372
|
$
|
11,716
|
$
|
12,417
|
$
|
18,118
|
$
|
7,979
|
$
|
39,551
|
$
|
156,432
|
Total production costs net of by-product credits (1)
|
E=(C+D)
|
$
|
47,986
|
$
|
108,720
|
$
|
56,231
|
$
|
48,488
|
$
|
44,699
|
$
|
55,846
|
$
|
77,154
|
$
|
439,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable ounces of silver (koz)
|
F
|
|
4,756
|
|
3,969
|
|
3,454
|
|
3,120
|
|
2,010
|
|
3,636
|
|
3,717
|
|
24,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per Ounce of Silver net of by-product credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash cost per ounce net of by-products
|
=C/F
|
$
|
8.14
|
$
|
12.94
|
$
|
12.89
|
$
|
11.56 (2)
|
$
|
13.22 (2)
|
$
|
13.16
|
$
|
10.12
|
$
|
11.46 (2)
|
Total production cost per ounce net of by-products
|
=E /F
|
$
|
10.09
|
$
|
27.39
|
$
|
16.28
|
$
|
15.54
|
$
|
22.23
|
$
|
15.36
|
$
|
20.76
|
$
|
17.80
|
(1)
|
Totals may not add due to rounding.
|
(2)
|
Please refer to note (6) under "Financial & Operating Highlights" table.
|
|
Three months ended December 31, 2013
|
|
|
|
La
Colorada
|
|
Dolores
|
|
Alamo
Dorado
|
|
Huaron
|
|
Morococha
|
|
San
Vicente
|
|
Manantial
Espejo
|
Consolidated
Total
|
Cash Costs before by-product credits
|
A
|
$
|
15,161
|
$
|
32,484
|
$
|
18,634
|
$
|
25,198
|
$
|
20,430
|
$
|
16,116
|
$
|
27,464
|
$
|
155,487
|
|
Less gold credit
|
b1
|
$
|
(690)
|
$
|
(19,818)
|
$
|
(7,527)
|
$
|
(86)
|
$
|
(855)
|
$
|
-
|
$
|
(28,835)
|
$
|
(57,810)
|
|
Less zinc credit
|
b2
|
$
|
(3,001)
|
$
|
-
|
$
|
-
|
$
|
(5,585)
|
$
|
(6,850)
|
$
|
(2,536)
|
$
|
-
|
$
|
(17,972)
|
|
Less lead credit
|
b3
|
$
|
(1,697)
|
$
|
-
|
$
|
-
|
$
|
(2,934)
|
$
|
(1,868)
|
$
|
(402)
|
$
|
-
|
$
|
(6,902)
|
|
Less copper credit
|
b4
|
$
|
-
|
$
|
-
|
$
|
(281)
|
$
|
(5,461)
|
$
|
(3,810)
|
$
|
-
|
$
|
-
|
$
|
(9,552)
|
Sub-total by-product credits(1)
|
B=( b1+
b2+ b3+ b4)
|
$
|
(5,388)
|
$
|
(19,818)
|
$
|
(7,807)
|
$
|
(14,066)
|
$
|
(13,384)
|
$
|
(2,938)
|
$
|
(28,835)
|
$
|
(92,236)
|
Cash Costs net of by-product
credits (1)
|
C=(A+B)
|
$
|
9,773
|
$
|
12,666
|
$
|
10,827
|
$
|
11,132
|
$
|
7,046
|
$
|
13,178
|
$
|
(1,372)
|
$
|
63,251
|
Depreciation, amortization & reclamation
|
D
|
$
|
2,245
|
$
|
9,021
|
$
|
3,676
|
$
|
3,132
|
$
|
4,622
|
$
|
2,284
|
$
|
7,173
|
$
|
32,153
|
Total production costs net of by-product credits (1)
|
E=(C+D)
|
$
|
12,018
|
$
|
21,688
|
$
|
14,503
|
$
|
14,263
|
$
|
11,668
|
$
|
15,463
|
$
|
5,801
|
$
|
95,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable ounces of silver (koz)
|
F
|
|
1,191
|
|
920
|
|
1,228
|
|
760
|
|
543
|
|
907
|
|
869
|
|
6,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per Ounce of Silver net of by-product credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash cost per ounce net of by-products
|
=C/F
|
$
|
8.20
|
$
|
13.77
|
$
|
8.81
|
$
|
14.65 (2)
|
$
|
12.97 (2)
|
$
|
14.53
|
$
|
(1.58)
|
$
|
9.85 (2)
|
Total production cost per ounce net of by-products
|
=E/F
|
$
|
10.09
|
$
|
23.57
|
$
|
11.81
|
$
|
18.77
|
$
|
21.49
|
$
|
17.05
|
$
|
6.67
|
$
|
14.86
|
|
Twelve months ended December 31, 2013
|
|
|
|
La
Colorada
|
|
Dolores
|
|
Alamo
Dorado
|
|
Huaron
|
|
Morococha
|
|
San
Vicente
|
|
Manantial
Espejo
|
Consolidated
Total
|
Cash Costs before by-product credits
|
A
|
$
|
61,554
|
$
|
117,203
|
$
|
62,454
|
$
|
99,745
|
$
|
84,087
|
$
|
67,123
|
$
|
110,810
|
$
|
602,976
|
|
Less gold credit
|
b1
|
$
|
(2,894)
|
$
|
(91,113)
|
$
|
(24,194)
|
$
|
(177)
|
$
|
(2,611)
|
$
|
-
|
$
|
(83,995)
|
$
|
(204,985)
|
|
Less zinc credit
|
b2
|
$
|
(10,895)
|
$
|
-
|
$
|
-
|
$
|
(22,245)
|
$
|
(24,110)
|
$
|
(9,897)
|
$
|
-
|
$
|
(67,148)
|
|
Less lead credit
|
b3
|
$
|
(6,605)
|
$
|
-
|
$
|
-
|
$
|
(11,685)
|
$
|
(7,553)
|
$
|
(1,157)
|
$
|
-
|
$
|
(27,000)
|
|
Less copper credit
|
b4
|
$
|
-
|
$
|
-
|
$
|
(712)
|
$
|
(21,128)
|
$
|
(12,704)
|
$
|
-
|
$
|
-
|
$
|
(34,544)
|
Sub-total by-product credits(1)
|
B=( b1+
b2+ b3+ b4)
|
$
|
(20,394)
|
$
|
(91,113)
|
$
|
(24,907)
|
$
|
(55,235)
|
$
|
(46,978)
|
$
|
(11,055)
|
$
|
(83,995)
|
$
|
(333,677)
|
Cash Costs net of by-product
credits (1)
|
C=(A+B)
|
$
|
41,160
|
$
|
26,090
|
$
|
37,548
|
$
|
44,510
|
$
|
37,109
|
$
|
56,068
|
$
|
26,815
|
$
|
269,299
|
Depreciation, amortization & reclamation
|
D
|
$
|
8,010
|
$
|
44,210
|
$
|
17,813
|
$
|
11,667
|
$
|
17,648
|
$
|
9,226
|
$
|
32,885
|
$
|
141,460
|
Total production costs net of by-product credits (1)
|
E=(C+D)
|
$
|
49,170
|
$
|
70,301
|
$
|
55,361
|
$
|
56,177
|
$
|
54,757
|
$
|
65,294
|
$
|
59,700
|
$
|
410,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable ounces of silver (koz)
|
F
|
|
4,365
|
|
3,494
|
|
5,043
|
|
2,879
|
|
2,046
|
|
3,614
|
|
3,138
|
|
24,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash cost per Ounce of Silver net of by-product credits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash cost per ounce net of by-products
|
=C/F
|
$
|
9.43
|
$
|
7.47
|
$
|
7.45
|
$
|
15.46 (2)
|
$
|
18.14 (2)
|
$
|
15.51
|
$
|
8.55
|
$
|
10.96 (2)
|
Total production cost per ounce net of by-products
|
=E/F
|
$
|
11.27
|
$
|
20.12
|
$
|
10.98
|
$
|
19.51
|
$
|
26.76
|
$
|
18.07
|
$
|
19.03
|
$
|
16.71
|
(1)
|
Totals may not add due to rounding.
|
(2)
|
Please refer to note (6) under "Financial & Operating Highlights" table.
|
All-In Sustaining Cost per Silver Ounce Sold(Unaudited in thousands of U.S. dollars)
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Direct Operating Costs
|
|
$
|
138,484
|
$
|
127,812
|
$
|
538,251
|
$
|
517,646
|
Net Realizable Value Adjustments
|
|
|
2,212
|
|
8,411
|
|
29,953
|
|
12,967
|
Production Costs
|
|
|
140,695
|
|
136,223
|
|
568,204
|
|
530,613
|
Royalties
|
|
|
5,277
|
|
5,570
|
|
27,955
|
|
26,459
|
Smelting, refining and transportation charges(1)
|
|
|
24,159
|
|
22,063
|
|
86,470
|
|
83,244
|
Less by-product credits(1)
|
|
|
(84,141)
|
|
(85,696)
|
|
(361,309)
|
|
(331,809)
|
Cash cost of sales net of by- products (2)
|
|
|
85,989
|
|
78,160
|
|
321,319
|
|
308,507
|
|
|
|
|
|
|
|
|
|
|
Sustaining capital (3)
|
|
|
24,172
|
|
25,086
|
|
99,083
|
|
111,646
|
Exploration and project development
|
|
|
4,278
|
|
990
|
|
13,225
|
|
15,475
|
Reclamation cost accretion
|
|
|
809
|
|
757
|
|
3,238
|
|
3,030
|
General & administrative expense
|
|
|
3,051
|
|
2,602
|
|
17,908
|
|
17,596
|
All-in sustaining costs (2)
|
A
|
$
|
118,298
|
$
|
107,595
|
$
|
454,774
|
$
|
456,255
|
Payable ounces sold ( in koz)
|
B
|
|
6,352.6
|
|
6,436.0
|
|
25,430.5
|
|
25,478.0
|
All-in sustaining cost per silver ounce sold, net of by-products
|
(A*$1000)/B
|
$
|
18.62
|
$
|
16.72
|
$
|
17.88
|
$
|
17.91
|
All-in sustaining cost per silver ounce sold, net of by-products (Excludes NRV Adj.)
|
|
$
|
18.27
|
$
|
15.41
|
$
|
16.71
|
$
|
17.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining Capital(Unaudited in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of payments for mineral property, plant and equipment and sustaining capital
|
|
|
Three months ended
December 31,
|
Twelve months ended
December 31,
|
|
(in thousands of USD)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Payments for mineral property, plant and equipment (4)
|
$
|
30,131
|
$
|
33,669
|
$
|
131,761
|
$
|
159,401
|
|
Add/(Subtract)
|
|
|
|
|
|
|
|
|
|
Advances received for leases (4)
|
|
636
|
|
331
|
|
3,230
|
|
3,331
|
|
Non-Sustaining capital (Dolores, Navidad, La Colorada projects and other)
|
|
(6,595)
|
|
(8,914)
|
|
(35,908)
|
|
(51,085)
|
|
|
|
|
|
|
|
|
|
|
|
Sustaining Capital (2)
|
$
|
24,172
|
$
|
25,086
|
$
|
99,083
|
$
|
111,646
|
|
(1) Included in the revenue line of the unaudited condensed consolidated income statements and are reflective of realized metal prices for the applicable periods.
(2) Totals may not add due to rounding.
(3) Non – GAAP measure: see section entitled "Sustaining Capital" for detailed calculation.
(4) As presented on the unaudited condensed consolidated statements of cash flows.
|
|
|
|
|