- Record Net Earnings: Q4 net earnings reached $452 million and $980 million for 2025, driven by high silver/gold prices ($58/silver, $4,100/gold) and cost control.
- Free Cash Flow Surge: Generated $553 million in Q4 and $1.2 billion for 2025, with cash reserves rising to $1.3 billion (up $408 million).
- Strong Production Growth: Silver output hit 22.8M oz in 2025 (exceeding guidance), with Juanicipio contributing low-cost production and 14% growth expected in 2026.
- Cost Efficiency: Silver all-in sustaining costs averaged $13.88/oz (full year), while gold costs were $1,621/oz, below 2026 guidance ranges.
Operational Highlights
The company's silver production was 22.8 million ounces in 2025, exceeding guidance, while gold production was 742,200 ounces, within guidance. The acquisition of Juanicipio has been performing well, with strong silver production and low costs. Silver segment all-in sustaining costs were $9.51 per ounce in Q4 and $13.88 per ounce for the full year, while gold segment all-in sustaining costs were $1,699 per ounce in Q4 and $1,621 per ounce for the full year.
Guidance and Outlook
Pan American Silver provided 2026 guidance, expecting attributable silver production of 25-27 million ounces and gold production of 700,000-750,000 ounces. The company is evaluating a phased approach to development at La Colorada Skarn, with an updated technical report expected in Q2 2026. CEO Michael Steinmann expressed optimism about the company's prospects, citing strong metal prices and the potential for high returns on capital, as the company has increased its exploration budget for 2026.
Valuation and Cash Management
With a P/E Ratio of 27.72 and an EV/EBITDA of 13.71, the market is pricing in a certain level of growth. The company's cash and short-term investments increased by $408 million to $1.3 billion at year-end, and it has $278 million in senior notes maturing in 2027 at a 4.6% coupon. The company is considering early repayment, but notes that the bonds aren't very liquid. The Dividend Yield is 0.71%, while the Free Cash Flow Yield is 4.52%, indicating a decent return for shareholders.
Growth Prospects
For 2026, silver production is expected to increase by 14%, driven by low-cost production at Juanicipio. The company will also release an updated PEA in La Colorada Skarn in Q2 and provide further information on Jacobina optimization. Analysts estimate next year's revenue growth at -0.5%, but with the company's strong track record and growth projects, there is potential for upside.