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PAAS Delivers Strong Mine Operating Earnings: Can the Rally Keep Going?
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Key Takeaways
PAAS reported Q1 2025 mine operating earnings of $250.8M, a 255% increase from the prior-year quarter.
Results marked five straight quarters of gains for PAAS, aided by cost control.
PAAS' mine operating earnings saw an 11% CAGR from 2021-2024, despite a sharp 2022 decline.
Pan American Silver Corp. (PAAS - Free Report) reported record mine operating earnings of $250.8 million in the first quarter of 2025, marking a 255% year-over-year surge. This impressive performance was driven by higher metal prices and lower production costs.
Importantly, this represents the fifth consecutive quarter of sequential improvement in mine operating earnings for Pan American Silver, underscoring its successful execution of cost control strategies. The gains were especially pronounced in the silver segment, where the all-in sustaining costs (AISC) came in significantly lower than expected.
Mine operating earnings serve as a vital indicator of a miner’s profitability and operational efficiency, reflecting how effectively it controls costs while generating revenues from its mining operations.
From a long-term perspective, Pan American’s track record has been positive, with mine operating earnings witnessing a compound annual growth rate (CAGR) of 11% between 2021 and 2024.
However, the journey has not been without volatility. In 2021, the company had reported mine operating earnings of $368 million, but this fell sharply to $48 million in 2022 as inflation and supply-chain disruptions pushed production and royalty costs up by 18%. This, however, had impacted the industry at large. PAAS rebounded strongly in 2023, posting a 516% increase in mine operating earnings to $296.8 million, driven by the acquisition of Yamana Gold assets and operational improvements. This recovery gained further momentum in 2024, when the metric climbed 84% to $548.5 million.
Looking ahead, the potential acquisition of MAG Silver Corp. (MAG - Free Report) could mark a transformative step for Pan American Silver. MAG Silver has a 44% stake in the Juanicipio project, which is the world’s largest-scale, highest-grade and lowest-cost primary silver mine. Juanicipio is expected to drive a meaningful reduction in Pan American Silver’s costs for the silver segment. PAAS expects to close the MAG Silver deal in the second half of 2025.
A Look at Its Peer’s Mine Operating Earnings Trends
First Majestic Silver (AG - Free Report) reported mine operating earnings of $63.8 million in the first quarter of 2025, representing a significant improvement from the mine operating loss of $0.3 million in the first quarter of 2024. This was attributed to the addition of Cerro Los Gatos mine, as well as the strong performance at San Dimas and Santa Elena mines. However, First Majestic Silver reported a 69% year-over-year increase in mine operating costs in the quarter.
First Majestic Silver had reported mine operating earnings of $101.4 million in 2021, which dropped a drastic 84% in 2022 due to inflationary costs as well as lower-than-expected production at Jerritt Canyon. The company managed to deliver a 53% rise in 2023, followed by a 258% improvement in 2024 to reach $91.9 million. However, despite this, First Majestic has lagged Pan American Silver with a 4% decline in CAGR over the 2021-2024 time period.
PAAS’ Price Performance, Valuation & Estimates
Year to date, PAAS shares have gained 43.5%, outpacing the industry's 35.5% growth. In comparison, the Basic Materials sector has risen 9.6%, while the S&P 500 has moved up 1.2%.
Image Source: Zacks Investment Research
PAAS is currently trading at a forward 12-month price-to-earnings multiple of 17.40X compared with the industry average of 18.97X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Pan American Silver’s earnings for 2025 has moved up 5.76% over the past 60 days. The same for 2026 has moved down 4.55%.
Image Source: Zacks Investment Research
The consensus mark for 2025 earnings is pegged at $1.47 per share, indicating a year-over-year surge of 86.1%. The estimate for 2026 of $1.89 indicates an increase of 28.7%.
PAAS stock currently carries a Zacks Rank #3 (Hold).
Image: Shutterstock
PAAS Delivers Strong Mine Operating Earnings: Can the Rally Keep Going?
Key Takeaways
Pan American Silver Corp. (PAAS - Free Report) reported record mine operating earnings of $250.8 million in the first quarter of 2025, marking a 255% year-over-year surge. This impressive performance was driven by higher metal prices and lower production costs.
Importantly, this represents the fifth consecutive quarter of sequential improvement in mine operating earnings for Pan American Silver, underscoring its successful execution of cost control strategies. The gains were especially pronounced in the silver segment, where the all-in sustaining costs (AISC) came in significantly lower than expected.
Mine operating earnings serve as a vital indicator of a miner’s profitability and operational efficiency, reflecting how effectively it controls costs while generating revenues from its mining operations.
From a long-term perspective, Pan American’s track record has been positive, with mine operating earnings witnessing a compound annual growth rate (CAGR) of 11% between 2021 and 2024.
However, the journey has not been without volatility. In 2021, the company had reported mine operating earnings of $368 million, but this fell sharply to $48 million in 2022 as inflation and supply-chain disruptions pushed production and royalty costs up by 18%. This, however, had impacted the industry at large.
PAAS rebounded strongly in 2023, posting a 516% increase in mine operating earnings to $296.8 million, driven by the acquisition of Yamana Gold assets and operational improvements. This recovery gained further momentum in 2024, when the metric climbed 84% to $548.5 million.
Looking ahead, the potential acquisition of MAG Silver Corp. (MAG - Free Report) could mark a transformative step for Pan American Silver. MAG Silver has a 44% stake in the Juanicipio project, which is the world’s largest-scale, highest-grade and lowest-cost primary silver mine. Juanicipio is expected to drive a meaningful reduction in Pan American Silver’s costs for the silver segment. PAAS expects to close the MAG Silver deal in the second half of 2025.
A Look at Its Peer’s Mine Operating Earnings Trends
First Majestic Silver (AG - Free Report) reported mine operating earnings of $63.8 million in the first quarter of 2025, representing a significant improvement from the mine operating loss of $0.3 million in the first quarter of 2024. This was attributed to the addition of Cerro Los Gatos mine, as well as the strong performance at San Dimas and Santa Elena mines. However, First Majestic Silver reported a 69% year-over-year increase in mine operating costs in the quarter.
First Majestic Silver had reported mine operating earnings of $101.4 million in 2021, which dropped a drastic 84% in 2022 due to inflationary costs as well as lower-than-expected production at Jerritt Canyon. The company managed to deliver a 53% rise in 2023, followed by a 258% improvement in 2024 to reach $91.9 million. However, despite this, First Majestic has lagged Pan American Silver with a 4% decline in CAGR over the 2021-2024 time period.
PAAS’ Price Performance, Valuation & Estimates
Year to date, PAAS shares have gained 43.5%, outpacing the industry's 35.5% growth. In comparison, the Basic Materials sector has risen 9.6%, while the S&P 500 has moved up 1.2%.
PAAS is currently trading at a forward 12-month price-to-earnings multiple of 17.40X compared with the industry average of 18.97X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Pan American Silver’s earnings for 2025 has moved up 5.76% over the past 60 days. The same for 2026 has moved down 4.55%.
Image Source: Zacks Investment Research
The consensus mark for 2025 earnings is pegged at $1.47 per share, indicating a year-over-year surge of 86.1%. The estimate for 2026 of $1.89 indicates an increase of 28.7%.
PAAS stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.