Pan American Silver Q1 2025 Earnings Report

Pan American Silver EPS Results

• Actual EPS: $0.42
• Consensus EPS: $0.19
• Beat/Miss: Beat by +$0.23
• One Year Ago EPS: $0.01

Pan American Silver Revenue Results

• Actual Revenue: $773.20 million
• Expected Revenue: $696.62 million
• Beat/Miss: Beat by +$76.58 million
• YoY Revenue Growth: +28.60%

Pan American Silver Announcement Details

• Quarter: Q1 2025
• Date: 5/7/2025
• Time: After Market Closes
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 11:00AM ET

Pan American Silver (NYSE:PAAS) engages in the exploration, mine development, extraction, processing, refining, and reclamation of silver, gold, zinc, lead, and copper mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile, and Brazil. The company was formerly known as Pan American Minerals Corp. and changed its name to Pan American Silver Corp. in April 1995. Pan American Silver Corp. was incorporated in 1979 and is headquartered in Vancouver, Canada.

Pan American Silver Q1 2025 Earnings Call Transcript

Key Takeaways

• Record mine operating earnings: Q1 mine operating earnings reached $250.8 M, driven by higher metal prices and focused cost management.
• Silver production and costs: Produced just over 5 M oz of silver in Q1 with AISC of $13.94/oz, well below guidance due to higher byproduct credits.
• Gold output and efficiencies: Gold production of 182.2 k oz with AISC of $14.85/oz, outperforming expectations thanks to residual leaching at Dolores and strong byproduct credits.
• Robust cash generation: Q1 operating cash flow was $240 M (pre‐WC), free cash flow of $112.6 M, cash balance of $923 M, and total liquidity of ~$1.7 B funding growth and shareholder returns.
• Growth projects update: Advancing the La Colorada Skarn project and ongoing exploration, while the Escobal restart date remains uncertain amid consultation discussions.

Presentation

[Operator]

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver First Quarter twenty twenty five Results Conference Call. As a reminder, all participants are in listen only mode. The conference is being recorded.

[Operator]

After the presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Cyran Saseki, VP, Investor Relations. Please go ahead, Ms. Saseki.

[Siren Fisekci, Vice President of Investor Relations & Corporate Communications at Pan American Silver]

Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our results for the first quarter of twenty twenty five. This call includes forward looking statements and information and makes reference to non GAAP measures. Please see the cautionary statements in our MD and A, news release and presentation slides for Q1 twenty twenty five results, all of which are available on our website. I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Hello, everyone. I'm glad you could join us to discuss our Q1 results. 2025 is off to a strong start with Pan American posting another quarter of solid operating performance, building on the momentum from last year. Mine operating earnings have been increasing over each quarter in 2024 and this trend continued for the first quarter of twenty twenty five, reaching a record of $250,800,000 in mine operating earnings. The improvements in metal prices have certainly contributed to margin expansions, but I would like to acknowledge the work of our teams in not only maintaining a focus on safe, efficient operations, but also carefully managing costs in order to deliver the margin improvements that resulted in the record mine operating earnings for the quarter.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

La Colorada is contributing strongly to these results. The improvement in mine ventilation conditions has allowed us to accelerate development rates and increase the number of production areas, which is leading to higher throughput and lower per unit costs. In Q1, we produced just over 5,000,000 ounces of silver production, slightly above our guidance range for the quarter. On costs, the performance was even better. Lower than anticipated production costs across the Silver segment contributed to all in sustaining costs of $13.94 per ounce, well below our guided range.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

The low silver segment all in sustaining costs also benefited from higher than expected byproduct credits from higher gold production at Cerro Moro and higher zinc and lead production across our polymetallic operations as well as some lower capital expenditures. Gold production in Q1 of 182,200 ounces was in line with our guidance, while gold segment all in sustaining costs excluding NRV adjustments of $14.85 dollars per ounce were better than expected. The main drivers of strong cost performance in the Gold segment were higher than expected gold and silver production from residual leaching at Dolores and higher silver byproduct credits at El Penon. Revenue in Q1 was $773,000,000 while net earnings in Q1 totaled $169,000,000 or $0.47 per share. Adjusted earnings were $153,000,000 or $0.42 per share.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Operating cash flow before non cash working capital changes was $240,000,000 including $95,000,000 cash taxes. The taxes paid in Q1 represent roughly one third of the cash tax we expect to pay in 2025. After working capital changes, operating cash flow totaled approximately $175,000,000 At the end of Q1, our cash and short term investments increased to a record balance of $923,000,000 and free cash flow for the quarter was $112,600,000 Keep in mind that this increase in cash over the quarter is net of the $95,000,000 in taxes paid, dollars 81,000,000 invested in our sustaining and growth projects, inclusive of lease and loan payments and $56,000,000 we returned to shareholders through dividends and the share buyback. The cash generated by our operations fully funded our business needs, provided returns to shareholders and further improved our balance sheet. Including our undrawn line of credit, we have approximately $1,700,000,000 of total available liquidity, which gives us plenty of capacity to pursue our growth objectives.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Our largest organic growth opportunity, the La Colorada Skarn project continues to move ahead. Over Q1, we advanced engineering work and continued with exploration and infill drilling. We're also continuing to discuss potential partnerships for development of the project. We expect those discussions to take several quarters given the size and long life nature of the project. Our aim is to retain maximum exposure to the silver in this deposit.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

We're also investing at the La Colorada vein mine operations to explore extensions to the mineral resource in the higher grade Candelaria zone to the east and Southeast of our current operation. At Escobal, Pan American had four working meetings with the Guatemalan government during Q1 twenty twenty five as part of the ILO one hundred sixty nine consultation process. Currently, there is no date for the completion of the consultation process or the potential restart of operations at Escobar. The comprehensive mine and plant optimization studies at Jacobina are progressing well and we expect to include the findings of the first phase in early August twenty twenty five. The initial findings will include evaluations of modifying mining and tailings disposal methods to maximize the long term value for this flagship asset.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

In closing, 2025 is off to a very strong start. Operating performance is in line or better than expected and our forecast shows higher production over the balance of 2025 as per the quarterly guidance we provided in February. We are maintaining the guidance we provided in February for consolidated production, cost and annual expenditures. That outlook combined with today's favorable precious metal prices points to the potential of generating very strong profit margins this year. We generated $112,600,000 of free cash flow in Q1 alone and gold prices are currently trading substantially higher than the average in Q1.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

This is an incredible exciting time to be in precious metals and invested in Pan American. I would now be happy to take your questions together with the other members of our management team.

[Operator]

We will now begin the question and answer session. The first question comes from Oveit Sabib with Scotiabank. Please go ahead.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Thank you, operator. Good morning, Michael and Pan American team. Congrats to a strong start to the year, especially on cost. Michael, a couple of questions from me, just starting off with just remaining on the cost side. So costs both at the silver and the gold segments really outperformed the quarterly guidance that was provided.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Now with Q1 trending ahead of guidance, should we expect subsequent quarters to adjust for this cost improvement? How should we be looking at costs kind of going into Q2 and kind of beyond?

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Good morning, Uves. I'll have Scott answering the question. Just in general, obviously, great performance on the cost as you mentioned. We normally don't make adjustments after one quarter, but we're pretty happy what we're seeing. But I'll let Scott answer the rest of the question please.

[Scott Campbell, Senior Vice President of Operations & Projects at Pan American Silver]

Yes. Good morning. Scott Campbell here. We're very encouraged by the strong cost performance in both silver and gold segment operations. That's in large part a function of our commitment to cost control, the high byproduct metal prices and in some cases, favorable exchange rates in the countries where we operate.

[Scott Campbell, Senior Vice President of Operations & Projects at Pan American Silver]

We're maintaining our cost guidance for the year. And as Michael said, we don't usually make an adjustment after only one quarter, but we're encouraged by our cost performance so far this year. And we think this will continue provided metal prices and exchange rates maintain their levels. Well run, we'll see a cost increase on a per ounce basis as we get into the placement and compaction of our thickened tailings from our new tailings filtration plant. And sustaining capital spending will also increase at several operations, specifically Shawindo as we get into the dry season and our large capital projects begin.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Thanks for that, Scott. So essentially, I get a little bit of an uptick in Q2, but as kind of production increases going into the second half, your per ounce cost essentially should come down in the second half. Is that how we should look at it?

[Michael Steinmann, President, CEO & Director at Pan American Silver]

I think as Scott said, if everything stays the same, right, as you know our costs have different important inputs. One of course is our operation and how we perform there. The other one because this is not a byproduct credits, the other big input is byproduct metal prices which we all know are very high right now. So if that continues of course it has a positive impact to our cost. And the last big one is exchange rates And as we have some favorable exchange rates in some of the countries at the moment, that helps us as well.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

So if those inputs that are out of our control maintain their position and of course, we will continue to have very strong control of our cost on-site and you're right, always.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Perfect. Thanks for that Michael and Scott. Just then just moving on to in terms of gold and silver sold, that seemed to be the high this quarter as compared to previous quarters. Are you able to give any sort of information on what the drivers were on that?

[Ignacio Couturier, Chief Financial Officer at Pan American Silver]

Ovez. This is Ignacio speaking. Yes, the main driver there was, as you remember, we had a very strong Q4 production and a lot of that production came in late in December. So we did sell in January that extra production And you'll see in some of our slides, think it's over 445,000 ounces of gold inventory that we sold in Q1.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Really just timing of shipment, which happens many quarters, sometimes there is an increase of inventory, sometimes a decrease depending on how the production ends at the end of the month. Obviously, little bit easier to control timing on the dore shipment, a bit harder sometimes with the concentrate that we sell there where we have to wait for ships and ports to be ready. So that's just kind of the normal course of business at the end of each quarter. And as I said, sometimes it's a bit more, sometimes a less. But as Ignacio said after a very strong Q4, that's kind of the rest of selling that went on there in January.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

That's great. Thanks for that. And just one more question at Minera Florida, you're talking about costs that were high and you noted that absenteeism as one of the causes. Are you able to kind of shed some more light on what's happening there? And how should we kind of position ourselves going into Q2?

[Scott Campbell, Senior Vice President of Operations & Projects at Pan American Silver]

Minera Florida had a rough quarter. Certainly, we were affected by mine sequencing, some lower grade than expected, some absenteeism out of operation there and delays regarding plant and equipment delivery, mobile equipment delivery. We expect to claw that loss of production back and get those costs per ounce back in line in Q3 and Q4.

[Steve Busby, COO at Pan American Silver]

Yes. Hope, this is Steve. If I can just add on the absenteeism. January is the big month for holidays in Chile. And this year, it was a particularly hard hit month in terms of the number of holidays that we had our people out on. That's really what affected us in Q1 at Florida.

[Ovais Habib, Precious Metals Analyst at Scotiabank]

Got it. That's great color. And maybe that's it for me guys. Again, congrats on a great quarter and thanks for taking my questions.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Thanks, Owais.

[Operator]

The next question comes from Cosmos Chiu with CIBC. Please go ahead.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Hi. Thanks, Michael and team. Congrats on, I agree, very strong start, very strong Q1. Maybe if I can ask about Bell Creek. I read that there were some geotechnical challenges at Bell Creek in the quarter.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

And then I actually went back to the commentary in Q1 twenty twenty four. And there were some challenging ground conditions at that time as well. So is this a continuing kind of issue? Could you maybe give us a bit more color in terms of what's happening? I know it's not your largest asset, but I'm just wondering if you can give us a bit more color.

[Steve Busby, COO at Pan American Silver]

Yes. I'll start, maybe Martin can add in a little bit as well, Cosmo. But yes, that central zone of Bell Creek, which is where our high grade and our little bit bigger stopes are for the Bell Creek mine, it's been challenging. We've been seeing some seismicity there and we have to manage that carefully as we mine and we put in some dynamic support as we enter into that area. And it's just it's a more challenging area than we expected.

[Steve Busby, COO at Pan American Silver]

We thought were putting in some programs that we did see some benefits last year. Last year, what we were seeing was a lot of hole squeezing. We were reporting hole squeezing on our drill holes. We have gotten some additives and things we're doing there that has helped a lot. But we're still facing some ground movements, seismicity in the area that we have to manage very carefully and then has slowed us down more than we expected in Q1.

[Steve Busby, COO at Pan American Silver]

I don't know, Martin, if you had any more you want to add.

[Martin Wafforn, Senior Vice President of Technical Services & Process Optimization at Pan American Silver]

No, that's a great answer, Steve. As we get deeper in the mine, certainly, seismicity is there. It's sort of with us all the time. The guys do a fantastic job of managing that and dealing with it. We've had to increase our support in some areas.

[Martin Wafforn, Senior Vice President of Technical Services & Process Optimization at Pan American Silver]

But it's with us and it does cause us at times to change our production plans during the quarter when you see that with the grades going up and down a bit as we have to change out some things in our plan. But we're sort of used to it now and we've got systems in place to deal with it as it happens and it's part of our mining process there at the mine.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Thanks. Maybe switching gears to Escobar. Michael, as you mentioned, there were four working meetings with the Guatemalan government in the quarter. Is that what you had expected? Are you happy with that progress?

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

I know you can't give us any kind of timing at this point in time, but I'm just wondering, were you happy with what happened in Q1?

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Yes. Good morning.

[Sean McAleer, Senior Vice President of Strategic Initiatives at Pan American Silver]

This is Sean. Had those meetings. Were it's good to talk to you. Yes, we had those meetings during the quarter. Things have been moving very slowly and it's always been hard to predict the rhythm of the meetings and the larger meetings.

[Sean McAleer, Senior Vice President of Strategic Initiatives at Pan American Silver]

But they were good meetings, lots of dialogue around the main concerns in the process, which again focus around water, environmental health concerns and blasting vibrations from the mine. So, we expect to have some more working meetings in the coming weeks and months and provide an update at the next results call.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Great. And then on the accounting side, questions here. Number one, I know that when you talk about unsustaining costs, still talk about the NRV adjustment. But just to confirm, that should be that is going to become less and less important as Dolores comes off. And at some point in time, will you stop talking about the NRV adjustment?

[Ignacio Couturier, Chief Financial Officer at Pan American Silver]

Hi Cosmos, it's Ignacio here. Yes, think you've got that right. Obviously, if you look at our previous results, a lot of the NRV adjustments that we had were due to Dolores. Now that Dolores is in full leach mode, that will become less of an issue. So we should see that those numbers disappear.

[Ignacio Couturier, Chief Financial Officer at Pan American Silver]

However, we do have other mines that have large heap leaches and large inventories and heap leaches like Shahuindo. So now Shahuindo has very good margins, but yes, in theory that we could see an NRV adjustments in Shahuindo in the future. But yes, now that Dolores is winding down and in Leach, those numbers should taper as well.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Great. And then maybe one last question following up on my buddy, Ovais' question here. Asked a different way in terms of guidance. I know you've maintained full year guidance. But my question is, previously, you had guided in Q2 to nineteen point five zero to $21.25 an ounce.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

In Q3, you've guided to $14.25 to $16.25 an ounce all in sustaining cost. At this point in time, are those still good goalposts to use in terms of us modeling Q2 and Q3?

[Steve Busby, COO at Pan American Silver]

Hi, Cosmos. Steve here. Yes, we feel that that guidance is still in line our quarterly guidance. So I think that's a good gauge. As we mentioned, there are some sustaining capital projects that start picking up steam, things like that.

[Steve Busby, COO at Pan American Silver]

We've got the tailings compaction that we're on, some developments picking up steam. So those are good guidance as we look forward. And as production comes up and the costs come down, we think that quarterly guidance still is in line.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Yes. And maybe if I can Sorry, Michael.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

But most obviously just to reiterate here, of course, that all depends where metal prices and exchange rates stand, right? I mean, if we because you those cost guidance have been calculated with the metal prices that we used at the time in our guidance. So you have to look at that. And of course, when we have higher byproduct metal prices and more favorable exchange rate, that will be and has right now a positive impact to our costs. So when you look at the guidance, just have a look at the metal prices and exchange rates that we used for that guidance as well.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Of course. We'll definitely adjust for those different input factors here. And then Michael, since I have you here, maybe if I can slip in one more question. In the MD and A, you don't talk much about Navidad. I know there's still a lot of questions about the province of Tribut.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

But from our industry sources, it does seem like Argentina is becoming a better place to do business. And so any comments that you can make on Navidad?

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Yes. Look, I mean, we are long time working in Argentina, many decades and of course we have operations in Santa Cruz and had operations in Santa Cruz for a long time. So things are changing in Argentina on many fronts, but I think it's still too early to talk about. Navidad, obviously, we will see hopefully continued positive changes here over the years under the new administration. We see the positive impact already on Cerro Moro and hopefully that will continue.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

We are very happy to have kind of some long term pipeline projects with us that are there and there's very little cost to hold on this project and one of the largest solar resource on the planet. So I will just monitor and watch and see how Argentina evolves over the next, I would say twelve to twenty four months.

[Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets]

Great. Thanks, Michael and team. Those are all the questions I have. Congrats once again on a strong Q1 and we look forward to that continuing for the rest of 2025.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Thanks,

[Operator]

The next question comes from Don DeMarco with National Bank. Please go ahead.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

Thank you, operator, and good morning, Michael and team. Great quarter certainly on costs. On costs, I'll start off with that. In response to a previous question, you mentioned a few drivers that commitment to cost control, favorable FX rates, strong byproduct rates. Do you have a sense of the approximate benefit of each of these categories on the aggregate outperformance in Q1?

[Michael Steinmann, President, CEO & Director at Pan American Silver]

That's quite complicated to answer, Don, because just on the exchange rate for example, right, there is a lot of different pieces depending where we buy different services and products and equipment from which country that comes in etcetera. So I don't have a detailed number on that. Obviously, byproduct credit is a bit easier. Think if you just look at the metal prices that we used on our cost calculation for the guidance at the beginning of the year and then looking at the result with the higher metal prices now. But as I said that kind of those exchange rates and obviously cost control at the side are all very tightly intertwined.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

So it's I think it's quite difficult to get you exact numbers on how much is coming from which side.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

Okay. Okay. Well, that's helpful nonetheless. But then maybe shifting to my next question, it's on capital allocation. So your balance sheet is continuing to improve.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

You got cash over $900,000,000 You mentioned $1,700,000,000 in liquidity. So what are your priorities on capital allocation? Like considering the different range of options, you've got debt repayment, do you see opportunity to increase the NCIB or dividends or maybe see a better ROI by deploying cash into pending Skarn development that's pending?

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Most of them what you just mentioned, probably debt repayment is not really urgent for us. Just for everybody to remember, we have two bonds. They're very, very favorable bonds on their interest rates. I think the $500,000,000 bond is about 2.65% and then the rest up to date 100,000,000 so that's about $280,000,000 Some are sitting around 4.6%. So this is a very favorable bonds.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Don't think there's no hurry to pay those back. By the way, the larger one to five hundred million dollars bond only matures in 02/1931, so 2.65% interest rates until 02/1931. I think we can obviously with that money provide better return to shareholders than buying back that debt. So that leaves us to the rest of the buckets that you mentioned. And yes, shareholder return is always on our radar.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

It's to as you know, we have a policy in place that adds a special or additional dividend to our base dividend of $0.10 per share per quarter depending on our net cash. We are very close there. I think it starts kicking in at $100,000,000 net cash. We're just a little bit shy I would expect to cross that threshold here pretty soon.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

And then our dividend will automatically increase. There's a graph and the table in our MD and A explaining that. I think it goes as high as about $0.18 depending on how much net cash we have. So automatically the dividend will increase. You saw that we were buying back shares in January.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Now we will continue that thing. During the year we just extended or renewed our NCIB and we'll continue the same thing to be very opportunistic in buying back stock. There's always pullbacks and opportunities to do that and we'll jump in the market and do that. So very strong return in total to shareholders of 56,000,000 in Q1. And then of course, the best return is investment in our business and that goes from strong exploration results, investment in exploration to replace our reserves or add new resources to our assets.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Continued development of this Karnes obviously comes to mind, which is a gigantic, a very big, very interesting life long life asset for the company. Those kind of projects of course will provide the best return to our shareholders. But kind of the combination is obviously what makes it so interesting thing to be a shareholder in Pan American where you have all of this taken care of such a strong business and decide in Q1 where we can not only obviously pay for our sustaining capital, but invest money in special projects and that's a whole list in the press release that we are taking care of. A lot of exploration normally spent during the year mostly close to site, I would call it exploration, but probably close to $100,000,000 which of course the Skarn is one result of that very strong result. And still have sufficient funds to return it to shareholders and have quite a big cash balance, which can only always come very handy opportunities arise in the market.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

Certainly. Okay. Well, thanks for that. And then you mentioned the Skarn and with that the negotiations, you're looking to maintain maximum silver. Are you happy with the level of silver in your portfolio right now as relative to gold?

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

And can you share your thoughts on the different levers that you have to increase silver, Skarn being on Escobar? With Kosmos' question, you touched on Navidad, maybe there's potential M and A. So how do you feel about that level right now where it is?

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Look, I mean, this is our silver gold, let's call it our silver gold ratio within Pan American, not the gold ratio that people normally talk about on prices, Various goes up and down depending on the constellation of our assets. Remember back maybe quite a few years, maybe fifteen years, we had a very, very large zinc production when we still had Morococcus in our portfolio and zinc was a very important metal. Silver became went back to probably around 50%, fifty five % of revenue. Of course, now silver is less and again for several reasons. Once we purchased together with some interesting silver production obviously in Argentina and Chile, also some very strong gold production and the gold price is outperforming at the moment, the silver price strongly and that's obviously skewing the kind of the percentages of the two of the of all the four metals or five metals we produce on our revenue.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

So it's just a picture in time, but you mentioned, look, we have the largest reserve and the largest resource of silver in the world in our portfolio. That's our large number of big projects just has gone probably an average of about 17,000,000 ounces of silver a year. Of course, Escobal has the potential to produce 20,000,000 to 22,000,000 ounces a year. As I mentioned, Navidad the largest silver resource in the world or one of the largest and probably not right now ready, but very interesting resource there. So there's plenty of opportunity and you mentioned M and A as well.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

So there's plenty of opportunity for us to change in the future that silver gold ratio that we have internally. So lots of silver projects there, but at the moment of course very strong cash flow generation from outperforming gold.

[Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial]

Okay, great. Thank you for your thoughts on that. And well, that's all for me and good luck with the rest of Q2.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Thank you, Dan.

[Operator]

This concludes the question and answer session. I would like to turn the conference back over to Michael Steinmann for any closing remarks. Please go ahead.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

Yes. Thanks everyone for calling in today. Great result, great quarter, great start of the year. Really looking forward to Q2 and beyond. Just one item I would like to mention here, At the end of this month, we will release our 2024 sustainability report.

[Michael Steinmann, President, CEO & Director at Pan American Silver]

So our ESG performance is core to our business and really look forward to updating you on our progress in that area with our report that's out there annually. You can look at probably the last twelve years of report on our website and get a very good idea of what we are doing on this really important projects that we do on the ESG side. With that, thanks everyone for calling in and looking forward to talk to you in August for Q2. Thank you everyone.

[Operator]

This brings to close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Participants

Executives

• Siren Fisekci, Vice President of Investor Relations & Corporate Communications
• Michael Steinmann, President, CEO & Director
• Scott Campbell, Senior Vice President of Operations & Projects
• Ignacio Couturier, Chief Financial Officer
• Steve Busby, COO
• Martin Wafforn, Senior Vice President of Technical Services & Process Optimization
• Sean McAleer, Senior Vice President of Strategic Initiatives

Analysts

• Ovais Habib, Precious Metals Analyst at Scotiabank
• Cosmos Chiu, Executive Director & Institutional Equity Research - Precious Metals at CIBC World Markets
• Don DeMarco, Equity Research Analyst - Precious Metals at National Bank Financial