Pan American Silver (NYSE:PAAS) reported $377 million in attributable free cash flow for the third quarter of 2026 and adjusted its full-year gold outlook after production challenges and higher costs at several mines.
The company maintained its annual silver production outlook of 25 million to 27 million ounces, though President and CEO Michael Steinmann said output is expected at the low end of that range. For gold, Pan American now expects 660,000 to 680,000 ounces for the year and all-in sustaining costs of $2,000 to $2,150 per ounce.
Third-quarter net earnings were $357 million, or $0.86 per share, including a gain on the sale of the Larder exploration property and a mark-to-market gain on the company’s interest in New Pacific Metals. Adjusted earnings were $287 million, or $0.69 per share. Cash flow from operations, including Pan American’s share of cash flow from Juanicipio, was $462 million.
Silver outlook maintained despite mine disruptions
Attributable silver production was 6.1 million ounces in the quarter, below the company’s quarterly outlook. Steinmann said strong production at La Colorada, Huaron and San Vicente was offset by a shortfall at Juanicipio and Cerro Moro.
Juanicipio moved into lower-silver-grade ore in the second half after higher-than-planned grades boosted first-half production, but the mine remains on track for its annual guidance, Steinmann said. At Cerro Moro, mine sequencing favored higher-gold-grade ore, while heavy rainfall disrupted ore transport and processing.
The company also expects unplanned downtime at Huaron in the fourth quarter to weigh on silver output. COO Scott Campbell said repairs to the primary grinding mill foundation were expected to result in approximately 40 days of downtime, with the plant fully operational again by the middle of November.
Steinmann said the mine remained in production and was stockpiling ore. Processing and recovery of the accumulated material will extend into the first and second quarters of 2027, he said.
Silver segment all-in sustaining costs were $11.21 per ounce in the third quarter, below the company’s quarterly outlook. Pan American expects full-year costs toward the lower end of its $15.75 to $18.25 per ounce guidance range. Steinmann said higher zinc and other base-metal prices contributed by-product credits that lowered silver costs.
Gold outlook reflects operating challenges
Third-quarter attributable gold production was 168,000 ounces. At Timmins, production was affected by delayed access to higher-grade stopes and grade underperformance, while recovered ounces at Shahuindo were delayed by increased leach pad inventories, Steinmann said.
Gold segment all-in sustaining costs were $2,281 per ounce in the quarter, above the company’s outlook. The revised annual cost forecast reflects lower expected production, increased development at Jacobina and El Peñón, higher labor and consumable costs, and weather-related impacts, Steinmann said.
At Jacobina in Brazil, Pan American reduced its production forecast after a National Mining Agency inspection identified deficiencies primarily involving ventilation redundancies and completion of secondary exits in some areas. The company changed mine sequencing to allow remediation work, substituting lower-grade material for the rest of 2026.
Campbell said the inspection issues were separate from previously disclosed seismicity concerns. Steinmann said remediation would extend into early 2027 and affect production at the beginning of the year, though the company was still assessing the full impact.
The company is also accounting for possible heavy rainfall at Shahuindo. Steinmann said strong El Niño weather had already affected several operations, including Cerro Moro and El Peñón.
Capital returns and growth projects
Pan American returned $300 million to shareholders through dividends and share repurchases in the third quarter. For the first nine months of 2026, it generated $1.2 billion in attributable free cash flow and returned $701 million to shareholders, including $228 million in dividends and the repurchase and cancellation of approximately 9.6 million shares.
The board declared a quarterly dividend of $0.185 per common share. Steinmann said the company’s earlier plan for up to $1 billion in returns corresponded to a target of roughly 11.6 million shares at the prices used when the plan was announced. Lower share prices meant the company would not need to spend the full $1 billion to reach that repurchase target, he said.
Pan American ended the quarter with $1.9 billion in cash and equivalents, including cash at Juanicipio, and $3.4 billion in total available liquidity. It lowered its 2026 project capital estimate to $195 million to $210 million from $240 million to $255 million because of spending timing.
On growth projects, work began in August on the 12.4-kilometer decline at La Colorada in Mexico. The company plans to submit the hoisting and ventilation shaft component for board approval early in 2027. At Timmins, Pan American completed an exploration drift to the Samson deposit and expects a preliminary economic assessment for the wider camp in the first half of 2027.
For Escobal in Guatemala, Steinmann said the government-led consultation with Xinka representatives continues, but there is no timeline for its conclusion or a restart date. He said Guatemalan courts would decide whether the consultation had been fulfilled.
About Pan American Silver (NYSE:PAAS)
Pan American Silver Corp. is a mining company focused on the exploration, development and operation of silver and gold mines. Its products also include by-products such as zinc, lead and copper, which are recovered during mining and processing.
Founded in 1994 and headquartered in Vancouver, British Columbia, the company operates mines and holds exploration and development interests in Canada and Latin America. Its portfolio has expanded over time through acquisitions, including its 2023 acquisition of Yamana Gold’s Canadian assets and interests in several mines in Latin America.
Pan American Silver’s activities span the mining lifecycle, from mineral exploration and project development to ore processing and the sale of produced metals.
