PAAS is a long-term investment in the gold and silver segment, and the recent acquisition of part of Yamana Gold assets reinforces the long-term narrative. Due to the timing of closing, the addition of the Yamana assets is not reflected in our Q1 production and cost numbers, but Yamana's cash and debt have been added to our balance sheet at the end of the quarter. The first quarter was transformational for Pan American with the closing of the Yamana acquisition on March 31 and to result in an increase in scale and quality across our portfolio as outlined in our recently released consolidated 2023 operating guidance. Michael Steinmann, President, and Chief Executive Officer, said in the conference call: Gold production was 122.7K Au Oz, and Silver Production was 3,891 Ag Koz. The company said the consolidated silver production 1Q23 was within the guidance range. Pan American Silver's revenues were down 11.3% year-over-year to $390.3 million in 1Q23. PAAS reported an income per diluted share of $0.08 (basic adjusted earnings per share of $0.10) in the first quarter of 2023, compared to an income per diluted share of $0.36 a year ago. Upon closing the Arrangement, existing Pan American shareholders own approximately 58% of the Pan American Shares, and former Yamana Shareholders own about 42%. Note: After the merger, silver production is expected to increase by 63% and gold production by 104%. Of course, it is still too early to conclude anything, but the stock price is not going in the right direction. The fundamental question for us, shareholders, is whether or not the acquisition will turn beneficial and bring added value. However, the transformation is still controversial due to its deep impact on the balance sheet, as seen in this article. PAAS 2023 Guidance (PAAS May Presentation) (Pan American produced 552.5K Au ounces and 18.456 Ag Moz in 2022). Revenue and production are expected to increase significantly in 2023, with 21-23 Moz of Silver and 870-970 Koz of Gold, including 9 months of Production from Yamana Operations. PAAS is now a more prominent company with a strong presence in South America. It is a significant transformation in scale which is well explained in the Map presentation below:
The acquisition is firmly aligned with our strategy of creating value by pursuing attractive growth opportunities, improving operating margins and extending mine life. We expect a material increase in our production of silver and gold, while we continue to provide a preferred way to invest in silver through large silver mineral reserves and growth opportunities, further enhanced by the increase in our market capitalization and trading liquidity. Michael Steinmann, Chief Executive Officer of Pan American, said in the press release: On March 31, 2023, Pan American Silver completed the Yamana Gold acquisition.
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This article is an update of my preceding article, published on March 01, 2023. Note: I have been covering PAAS regularly quarterly since June 2019. ( NYSE: PAAS) released its first-quarter 2023 results on May 10, 2023. Vancouver-based Pan American Silver Corp.
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