Pan American Silver — A taste of things to come

Pan American Silver (NYSE: PAAS)

Last close As at 25/12/2024

USD20.58

0.11 (0.54%)

Market capitalisation

USD7,471m

More on this equity

Research: Metals & Mining

Pan American Silver — A taste of things to come

Pan American Silver (PAAS) has seen an encouraging start to the year with Q124 silver and gold production in line with management expectations and costs for both segments below its quarterly guidance. Q1 is typically one of the slowest quarters for PAAS and the company’s maintained guidance points to significant improvements in production and costs in H224. This should be supported by the current strength in commodity prices. We have increased our FY24 EBITDA estimate by 25% and upgraded our valuation from US$22.2/share to US$23.4. We believe there could be further upside to the share price if commodity prices remain at elevated levels and the company delivers on its operational guidance in FY24.

Written by

Andrey Litvin

Energy and Resources Analyst

Metals & Mining

Pan American Silver

A taste of things to come

Q124 results update

Metals and mining

14 May 2024

Price

US$19.8

Market cap

US$7,200m

Net debt (US$m) at Q124, including short-term investments of US$30m

475

Shares in issue

362.9m

Free float

100%

Code

PAAS

Primary exchange

TSX

Secondary exchange

NYSE

Share price performance

%

1m

3m

12m

Abs

4.2

62.9

21.4

Rel (local)

2.3

54.5

(4.1)

52-week high/low

US$20.63

US$12.21

Business description

Pan American Silver is one of the largest global primary silver producers and a sizeable gold miner, with operations in North, Central and South America since 1994. Following the acquisition of selected assets as part of the Yamana transaction, the company owns 11 producing operations, the currently suspended top-tier Escobal silver mine and several large-scale advanced exploration and development projects.

Next event

Annual mineral resources statement

August 2024

Analysts

Andrey Litvin

+44 (0)20 3077 5700

Andrew Keen

+44 (0)20 3077 5700

Pan American Silver is a research client of Edison Investment Research Limited

Pan American Silver (PAAS) has seen an encouraging start to the year with Q124 silver and gold production in line with management expectations and costs for both segments below its quarterly guidance. Q1 is typically one of the slowest quarters for PAAS and the company’s maintained guidance points to significant improvements in production and costs in H224. This should be supported by the current strength in commodity prices. We have increased our FY24 EBITDA estimate by 25% and upgraded our valuation from US$22.2/share to US$23.4. We believe there could be further upside to the share price if commodity prices remain at elevated levels and the company delivers on its operational guidance in FY24.

Year
end

Revenue
(US$m)

EBITDA
(US$m)

EPS*
(US$)

DPS
(US$)

EV/EBITDA
(x)

Yield
(%)

12/22

1,494.7

272.0

(0.54)

0.45

25.6

2.3

12/23

2,316.1

680.6

0.19

0.41

10.2

2.1

12/24e

2,743.8

958.6

0.58

0.40

7.3

2.0

12/25e

2,400.4

827.9

0.54

0.40

8.4

2.0

Note: *EPS excludes exceptional items.

Q124 results: A good starting point

Q124 silver and gold production was in line with company expectations and cash costs for both segments were below its quarterly guidance. The silver segment cash cost was down 34% q-o-q to US$12.7/oz, while the gold cash cost increased 10% but remained at a very comfortable US$1,207/oz. The strength of the company’s cost performance should be viewed through the prism of a reduction in quarterly silver and gold sales, which sequentially fell 14% and 16%. The decline in sales was partly offset by the higher realised gold price. As a result, PAAS reported Q124 revenues of US$601m, down 10% q-o-q, and EBITDA of US$162m.

Maintained guidance points to strong H224

PAAS has maintained its 2024 operating guidance, which suggests a significant improvement in cost performance and production in H224. Coupled with the current strength in commodity prices, it implies a visible boost to financial performance this year. We have upgraded our FY24e EBITDA by 25% to US$959m.

Escobal consultation delay

PAAS reported a delay in the ILO 169 consultation process at Escobal since the new government took office in Guatemala in January 2024. The government remains committed to completing the consultation process but has not yet provided an update on the timeline. We have changed our approach to the valuation of Escobal and now value the project on a standalone NPV basis.

Valuation: Commodity prices remain supportive

We have upgraded our valuation of PAAS from US$22.2/share to US$23.4. The increase is mainly due to the higher FY24 commodity price assumptions. Despite the recent healthy rebound in the share price, we believe there could be a further upside if commodity prices remain at elevated levels and the company continues to deliver on its cost and production guidance throughout 2024.

Q124 results review: An encouraging start to the year

PAAS has had an encouraging start to the year, with Q124 silver and gold production in line with company expectations and cash costs for both segments remaining below its quarterly guidance (Exhibit 2). We note that the results are not directly comparable to Q423 due to seasonality and Q123 due to the timing of the Yamana asset consolidation. Nevertheless, the silver segment cash cost was down 34% q-o-q to US$12.7/oz, mainly because of the reduction in costs at Cerro Moro and La Colorada, while the gold cash cost increased 10% but stayed at a very comfortable level of US$1,207/oz. The strength of the company’s cost performance should be viewed through the prism of a visible reduction in quarterly silver and gold sales, which sequentially fell 14% and 16%, respectively, as Q4 is normally the seasonally strongest quarter. At the top-line level, however, the reduction in sales was partly offset by the higher realised gold price, which increased 5% q-o-q to US$2,078/oz. As a result, PAAS reported Q124 revenues of US$601m, down 10% q-o-q, with EBITDA of US$162m. The company’s adjusted EPS was US$0.01 compared to a loss of US$0.04 in Q423.

PAAS finished the quarter with net debt of US$475m compared to US$361m at end FY23. This increase includes the share buyback of US$21.5m, with an additional US$2.8m spent since the quarter end. The company declared a dividend of US$0.1/share with respect to Q124. Further, on 1 May, PAAS announced the sale of the producing La Arena gold mine and La Arena II project for US$245m in cash, US$50m in deferred consideration and 1.5% in gold royalty. Among other things (see our recent note), the divestment should strengthen the company’s balance sheet, with pro forma Q124 net debt of US$230m.

Exhibit 1: Q124 results summary, US$m

 

Q124

Q423

q-o-q, %

Q123

Silver production, koz

5,009

4,835

3.6

3,891.0

Gold production, koz

223

248

(10.2)

122.7

Silver segment cash cost, US$/oz

12.7

19.3

(34.4)

12.2

Silver segment AISC, US$/oz

15.9

26.6

(40.3)

14.1

Gold segment cash cost, US$/oz

1,207

1,096

10.1

1,120.0

Gold segment AISC, US$/oz

1,580

1,411

12.0

1,196.0

Revenue

601

670

(10.2)

390

Cash production costs

(392)

(441)

(11.1)

(231)

D&A

(124)

(143)

(13.1)

(73)

Royalties

(14)

(20)

(31.5)

(9)

Mine operating earnings

71

65

9.4

77

Care and maintenance

(9)

(9)

(4.4)

(22)

Exploration

(3)

(4)

(26.3)

(1)

G&A

(22)

(19)

21.1

(10)

EBITDA (Edison)

162

201*

(19.8)

117

Reported PBT

4

(48)

N/A

25

Reported EPS, US$

(0.08)

(0.19)

(55.4)

0.08

Adjusted EPS (company), US$

0.01

(0.04)

N/A

0.10

Source: PAAS, Edison Investment Research. Note: *EBITDA includes US$25m in upwards PPA inventory adjustment.

PAAS reported a delay in the ILO 169 consultation process at Escobal since the new government took office in Guatemala in January 2024. The government has confirmed its commitment to completing the consultation process, but has not provided an update on the possible timeline. In light of these developments, we have changed our valuation approach to Escobal and now value the project on a standalone NPV basis (see below).

Revised earnings estimates

The company maintained its FY24 operational guidance and expects to produce 21–23Moz of silver and 880–1,000koz of gold at costs shown in Exhibit 2. Production is expected to be second-half weighted and costs are anticipated to reduce, especially in the silver segment due to the anticipated production recovery at La Colorada, towards the end of the year. Importantly, the company’s cost guidance is based on assumed gold and silver prices of US$1,950/oz and US$23.5/oz. If commodity prices continue to trade above these levels, cost estimates could look increasingly conservative. The spot gold and silver prices are currently c US$2,340/oz and US$28.2/oz, which from a cost point of view should be beneficial for the projects with large silver/gold by-product credits, in particular Cerro Moro and El Penon.

Exhibit 2: FY24 quarterly guidance

 

Q124

Q224

Q324

Q424

FY24

Silver production, Moz

4.75–5.30

5.36–5.78

5.44–5.97

5.45–5.95

21.0–23.0

Gold production, koz

204–231

221–252

229–258

226–259

880–1,000

Silver segment cash cost, US$/oz

16.5–18.5

15.5–17.5

10.5–12.9

4.6–7.7

11.7–14.1

Silver segment AISC, US$/oz

21.3–23.3

20.2–22.2

15.6–18.0

7.7–11.0

16.0–18.5

Gold segment cash cost, US$/oz

1,270–1,370

1,170–1,240

1,140–1,220

1,080–1,160

1,165–1,260

Gold segment AISC, US$/oz

1,500–1,700

1,500–1,590

1,460–1,570

1,400–1,500

1,475–1,575

Source: PAAS

We have updated our estimates for the Q124 results and made a number of project-related adjustments. While most of our underlying operational and cost assumptions at the project level remain broadly unchanged, we have made the following adjustments:

We have assumed that the La Arena sale will complete at the end of Q324 and that the project will only contribute for three quarters this year. We have reflected the cash payment of US$245m in our model’s cash flows. La Arena is a relatively high-cost mine and its sale should result in a marginal reduction in the gold segment costs.

At Dolores, we factored in the end of mining activities this year and have modelled the subsequent leaching operations for three years for gold and eight years for silver, in line with the company’s disclosure, based on 4.3Moz of silver and 35.4koz of gold inventory.

Finally, while we assume an improvement in production rates at La Colorada in H224 as ventilation issues are gradually resolved, we take a relatively cautious view and model the project’s FY24 cash cost at the top end of the company’s guidance range of US$16.6–19.3/oz.

Overall, our FY24 silver production estimate is broadly unchanged at 21.9Moz, while the gold production forecast of 922koz is 6% lower. We expect a further 8% reduction in gold production in FY25, mainly due to the La Arena divestment. Our FY24 gold and silver cash cost estimates are little changed and we model a gradual reduction in costs in FY25.

Exhibit 3: Changes to operational and cost estimates

 

FY24e

FY25e

FY24

 

New

Old

New

Guidance

Total silver production, Moz

21.9

22.0

23.4

21–23

Total gold production, koz

922

983

851

880–1,000

Silver segment cash cost, US$/oz

12.7

12.4

10.5

11.7–14.1

Silver segment AISC, US$/oz

16.8

16.6

14.6

16.0–18.5

Silver price, US$/oz

26.2

23.5

25.0

23.5

Gold segment cash cost, US$/oz

1,182

1,207

1,093

1,165–1,260

Gold segment AISC, US$/oz

1,522

1,524

1,373

1,475–1,575

Gold price, US$/oz

2,230

1,987

2,004

1,950

Source: PAAS, Edison Investment Research

We have also revised our commodity price estimates for the year, given the recent strength in gold and silver prices. Our updated gold price of US$2,230/oz is 12% above our previous estimate, while our silver price assumption of US$26.2/oz is 11% higher. We keep our commodity price assumptions beyond FY24 unchanged for now.

Overall, we are upgrading our FY24 revenue estimate by 6% to US$2,744m and our EBITDA estimate by 25% to US$959m. Both forecasts are somewhat above consensus, which currently points to FY24 EBITDA of US$884m. Importantly, we expect PAAS to sell 926koz of gold (0.4% above production vs 2.4% in Q124 and 1.2% in FY23) and 20.9Moz of silver in FY24. We have introduced FY25 estimates, excluding Escobal, which we had previously expected to start production in mid-2025. The anticipated sequential reduction in revenues and EBITDA is mainly due to our assumed lower commodity prices and estimated reduction in gold production.

Exhibit 4: Changes to financial estimates

 

FY24e

FY25e

US$m

New

Old

% change

New

Revenue

2,744

2,578

6.4

2,400

Cash production costs

(1,603)

(1,640)

(2.3)

(1,402)

D&A

(492)

(496)

(0.9)

(396)

Royalties

(64)

(62)

4.5

(58)

Exploration, care and maintenance

(40)

(39)

3.3

(38)

G&A

(78)

(73)

7.6

(75)

EBITDA

959

765

25.4

828

Reported EPS, US$

0.55

0.24

128.5

0.54

Normalised EPS (Edison), US$

0.58

0.24

140.8

0.54

Source: Edison Investment Research

Valuation: Supportive commodity prices

We have upgraded our valuation of PAAS from US$22.2/share to US$23.4. The main increase in the valuation comes from our revised earnings estimates on the back of the higher commodity prices. We have also changed our approach to the valuation of Escobal. We previously assumed the project would start production in mid-2025. However, given the likely delay in completing the ILO 169 consultation process, we now value it on a standalone NPV basis using a real discount rate of 5%, which we increased by 1pp to account for the higher uncertainty introduced by the recent political changes in Guatemala, and our long-term silver price of US$24/oz. We make no changes to the operational assumptions for Escobal, which are based on the feasibility study and discussed in more detail in our PAAS initiation report. Our valuation now includes the sale of La Arena (the cash consideration only), which we assume will complete at the end of Q324, and the recent share buyback.

Despite the recent healthy recovery in the share price, which we believe was mainly driven by the strength in the commodity prices and the share buyback, on our estimates PAAS still trades at FY24 EV/EBITDA of 7.3x (7.9x consensus). We believe there is further upside to the share price if commodity prices remain at elevated levels and the company continues to deliver on its operational outlook throughout 2024. Any progress on bringing the Escobal project back into production could be an additional strong catalyst for the share price.

Exhibit 5: PAAS valuation summary

WACC – nominal (FY24-28e)/real (from FY28e)

7.4%/5.0%

Tax on EBIT

40%

Number of shares outstanding, including share buyback

362.9m

US$m

US$/share

Sum of discounted free cash flow, currently producing operations

5,763

15.9

Add exploration/development assets

748

2.1

Add Escobal

2,087

5.8

Less FY23 net debt, adjusted for La Arena sale

111

0.3

Implied equity value

8,487

23.4

Source: Edison Investment Research

Exhibit 6: Financial summary

US$m

2022

2023

2024e

2025e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

1,494.7

2,316.1

2,743.8

2,400.4

Cash production costs

(1,094.4)

(1,479.2)

(1,602.6)

(1,401.7)

DD&A

(316.0)

(484.2)

(491.9)

(395.7)

Royalties

(35.9)

(55.9)

(64.3)

(57.5)

Gross Profit

48.4

296.8

585.0

545.4

G&A

(29.0)

(61.4)

(78.0)

(75.0)

Other operating costs

(63.5)

(96.8)

(40.3)

(38.3)

Operating profit (before amort. and excepts.)

 

 

(44.1)

196.4

466.7

432.1

EBITDA

 

 

272.0

680.6

958.6

827.9

Other operating expenses

(6.4)

3.4

0.0

0.0

Exceptionals

(211.8)

(103.9)

0.0

0.0

Reported operating profit

(262.3)

38.1

466.7

432.1

Net Interest and other finance expense

(22.5)

(91.4)

(92.0)

(74.2)

Profit Before Tax (norm)

 

 

(73.0)

108.4

374.7

358.0

Investment income (loss)

(16.2)

(5.5)

(10.8)

0.0

Profit Before Tax (reported)

 

 

(301.0)

(58.8)

363.9

358.0

Reported tax

(39.1)

(46.1)

(163.8)

(161.1)

Profit After Tax (norm)

(112.1)

62.3

211.0

196.9

Profit After Tax (reported)

(340.1)

(104.9)

200.2

196.9

Minority interests

1.7

(1.2)

0.8

0.8

Net income (normalised)

(113.8)

63.5

210.2

196.1

Net income (reported)

(341.8)

(103.7)

199.4

196.1

Average Number of Shares Outstanding (m)

211

327

364

363

EPS - basic normalised ($)

 

 

(0.54)

0.19

0.58

0.54

EPS - normalised fully diluted ($)

 

 

(0.54)

0.19

0.58

0.54

EPS - basic reported ($)

 

 

(1.62)

(0.32)

0.55

0.54

Dividend ($)

0.45

0.41

0.40

0.40

BALANCE SHEET

Fixed Assets

 

 

2,444.1

5,823.1

5,456.7

5,339.5

Tangible assets

2,226.4

5,675.1

5,308.7

5,191.5

Investments

121.2

0.0

0.0

0.0

Other

96.6

148.0

148.0

148.0

Current Assets

 

 

804.4

1,389.9

1,745.5

1,863.4

Inventories

471.6

711.6

746.4

710.4

Receivables

136.6

138.0

142.8

131.5

Cash

107.0

399.5

715.4

880.6

ST investments

35.3

41.3

41.3

41.3

Other

53.8

99.5

99.5

99.5

Current Liabilities

 

 

(380.8)

(624.2)

(609.2)

(587.0)

Creditors

(308.1)

(498.0)

(483.0)

(460.8)

Short term borrowings and leases

(27.3)

(52.4)

(52.4)

(52.4)

Other

(45.5)

(73.8)

(73.8)

(73.8)

Long Term Liabilities

 

 

(666.0)

(1,816.4)

(1,786.4)

(1,756.4)

LT debt and leases

(199.5)

(749.2)

(749.2)

(749.2)

Other long term liabilities

(466.5)

(1,067.2)

(1,037.2)

(1,007.2)

Net Assets

 

 

2,201.6

4,772.4

4,806.6

4,859.4

Minority interests

(6.1)

(11.8)

(12.6)

(13.4)

Shareholders' equity

 

 

2,195.5

4,760.6

4,794.0

4,846.0

CASH FLOW

Operating Cash Flow

(340.1)

(104.9)

200.2

196.9

D&A, exceptionals, other

555.2

663.5

709.7

609.6

Working capital movement

(42.0)

68.9

(54.7)

25.1

Tax

(137.8)

(149.4)

(188.8)

(191.1)

Net Interest

(3.4)

(27.9)

(54.1)

(52.8)

Net operating cash flow

 

 

31.9

450.2

612.4

587.8

Capex

(274.7)

(379.0)

(374.5)

(277.5)

Acquisitions/disposals

8.7

759.3

0.0

0.0

Equity financing

0.9

0.0

0.0

0.0

Dividends

(94.7)

(130.4)

(145.5)

(145.1)

Other

20.0

(15.3)

223.5

0.0

Net Cash Flow

(307.9)

684.8

316.0

165.2

Opening net debt/(cash), including ST investments

 

 

(289.4)

84.5

360.7

44.8

FX and other

(66.0)

(961.0)

0.0

0.0

Closing net debt/(cash)

 

 

84.5

360.7

44.8

(120.4)

Closing net debt/(cash), excluding ST investments

119.9

402.0

86.1

(79.1)

Source: Pan American Silver accounts, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Pan American Silver and prepared and issued by Edison, in consideration of a fee payable by Pan American Silver. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Pan American Silver and prepared and issued by Edison, in consideration of a fee payable by Pan American Silver. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on Pan American Silver

View All

Latest from the Metals & Mining sector

View All Metals & Mining content

Research: Financials

JDC Group — Well on track in 2024

JDC Group (JDC) reported strong Q124 results. Revenue growth accelerated to 21.6% from 10% in FY23, driven by its Advisortech division (+22.6%). In terms of profitability, the EBITDA margin increased to 7.6% from 7.3% in Q123. JDC reiterated its FY24 revenue guidance of €205–220m, 24% y-o-y growth at the midpoint, partly driven by the acquisition of Top Ten Financial Network, which management expects to contribute more than €18m in revenues this year. EBITDA is also expected to increase to a guided range of €14.5–16.0m (FY23: €11.7m). We make no changes to our estimates. Our DCF provides a valuation of €34.0/share.

Continue Reading

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free