Pan American Silver Reports 3Q Loss On Inventory Adjustments
(Kitco News)- Pan American Silver Corp.(Nasdaq: PAAS, TSX: PAAS), the world’s second-largest primary silver producer,late Tuesday reported that it flipped to a loss in the third quarter, hurt bylower metals prices and their impact on “net realizable value” inventory adjustments.
The adjusted loss was listedat $4.7 million, or 3 cents per share, impacted by approximately $23.4 millionin negative NRV inventory adjustments, Pan American said. In the same quarter ayear ago, the company posted a net profit of $23.3 million, or 15 cents.
The net loss was $9.2 million,or 6 cents per share, compared to a profit of $17.8 million, or 11 cents, inthe same quarter of 2017.
"The depressed metal prices had asignificant impact on both settlement adjustments on concentrate shipments andNRV inventory adjustments, which together reduced earnings in the quarter byapproximately $33.2 million," said Michael Steinmann, president and chiefexecutive officer.
Silver production was 6.3million ounces, up from 5.9 million ounces. Gold output rose to 42,100 ouncesfrom 40,800. Zinc, lead and copper production were 16,700 tonnes, 5,700 tonnes,and 2,600 tonnes, respectively, compared to 14,100 for zinc, 5,300 for lead and3,700 for copper in the third quarter of 2017.
However, while production wasup for all but copper, prices for all five metals declined from a year ago. Theaverage realized silver price eased to $14.88 an ounce from $16.68, and theaverage gold price fell to $1,212 from $1,277.
Still, Steinmann said thecompany increased its cash and short-term investments to $252.7 million despitethe lowest metals prices of the year.
“Operationally, our LaColorada asset is exceeding expectations,” he said. “The expansion isperforming above design capacity, achieving record quarterly silver productionof 2 million ounces in Q3 2018.”
The company maintained itsfull-year production guidance. The company projects 2018 silver output of 25million to 26.5 million ounces, with gold output of 175,000 to 185,000.
Pan American’s board of directors approved a cash dividend of $0.035 percommon share, same as after the second quarter, payable around Nov. 30 toshareholders of record as of the close on Nov. 19.
By Allen SykoraFor Kitco News
Follow @AllenSykora
asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication. |