Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 8 May, 25 | PAAS | Buy | USD 25.32 | USD 27.0 | USD 28.2 | 4 days | 11.4% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Pan American Silver Corp. 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.
Silver Segment Cost Reduction: AISC for the Silver Segment decreased by $2.69 per ounce, from $16.63 in Q1 2024 to $13.94 in Q1 2025
Mine Operating Earnings Surge: Q1 2025 mine operating earnings rose to $250.8 million, a 253% increase compared to $71.0 million in Q1 2024
Copper Production Drop: Copper production declined by 1.1 thousand tonnes, from 1.7 thousand tonnes to 0.6 thousand tonnes year-over-year
Gold Production Decline: Gold output fell by 40.7 thousand ounces, from 222.9 thousand ounces in Q1 2024 to 182.2 thousand ounces in Q1 2025
Pan American’s exposure to regulatory uncertainty, particularly regarding the unresolved consultation process at the Escobal mine in Guatemala, poses a material risk to its future production and growth potential
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 25.32 | 23.0 | 27.0 | 28.2 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Operational and Financial Performance in Q1 2025
Pan American Silver Corp. began 2025 with robust results, highlighted by record mine operating earnings of $250.8 million and strong free cash flow of $112.6 million. The company delivered silver production of 5.0 million ounces and gold production of 182.2 thousand ounces during the quarter. Revenues reached $773.2 million, a substantial increase from $601.4 million in Q1 2024. Net earnings improved significantly to $169.3 million, or $0.47 per share, from a net loss of $30.8 million, or $(0.08) per share, in the prior-year quarter. Adjusted earnings were $153.0 million, or $0.42 per share.
Cost Efficiency and Capital Management
Operational cost metrics showed notable improvement. The Silver Segment’s All-in Sustaining Costs (AISC) declined to $13.94 per ounce from $16.63 per ounce a year ago. Similarly, the Gold Segment AISC dropped to $1,485 per ounce from $1,499. Sustaining capital expenditures stood at $62.2 million, slightly lower than $65.7 million in Q1 2024, while project capital expenditures decreased to $18.6 million from $30.9 million. The company continues to manage its capital allocation prudently, with cash and short-term investments increasing by $35.7 million to $923.0 million as of March 31, 2025.
Dividend Payments and Share Repurchases Enhance Shareholder Returns
Pan American reinforced shareholder returns by maintaining its quarterly dividend of $0.10 per share, resulting in total dividend payments of $36.2 million in Q1 2025. Additionally, the company repurchased 909,012 common shares under its Normal Course Issuer Bid at an average price of $22.00 per share, amounting to a total consideration of $20.0 million. These actions reflect management’s confidence in the company’s financial strength and future outlook.
Strategic Project Development and Growth Initiatives
Key capital investments during the quarter were directed toward high-priority projects. At La Colorada, $4.9 million was invested to support vein mining operations and equipment leasing, while $3.0 million supported drilling and engineering for the La Colorada Skarn project. Jacobina received $4.8 million to advance mine and plant optimization studies. Other investments included $3.0 million at Huaron and $2.9 million at Timmins. The company also engaged in four consultation meetings with the Guatemalan government regarding the Escobal project under the ILO 169 process, though a restart date has not yet been determined.
Stable Production Outlook and Reaffirmed Guidance for 2025
Pan American reaffirmed its full-year 2025 guidance, targeting silver production of 20.0 to 21.0 million ounces and gold production between 735 and 800 thousand ounces. AISC guidance remains at $16.25 to $18.25 per silver ounce and $1,525 to $1,625 per gold ounce. Sustaining and project capital expenditures are expected to range between $270.0–$285.0 million and $90.0–$100.0 million, respectively. The company anticipates higher production in the second half of the year, consistent with its back-end weighted production profile.
Metal Prices Provide Earnings Tailwind
Elevated precious metal prices during the quarter contributed meaningfully to earnings. The average realized price for silver surged to $31.25 per ounce from $22.61, and gold prices rose to $2,868 per ounce from $2,078. Base metals also experienced price appreciation, notably zinc and copper, enhancing the company's revenue mix. These price gains, in combination with lower production costs, significantly expanded Pan American’s profit margins in Q1 2025.
Technical Commentary:
PAAS's stock has experienced an advance subsequent to establishing support at significant price points, suggesting a heightened probability of continued appreciation. The Relative Strength Index (RSI) currently moving above its midpoint serves as an indicator of prevailing bullish momentum and growing upward impetus. Moreover, the stock's current trading level above its 21-day Simple Moving Average reinforces the expectation of a sustained upward movement in the foreseeable future.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Pan American Silver Corp. (NYSE: PAAS) at its current market price of USD 25.32 as of May 8, 2025 (6:30 am PDT)
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Gold
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| PAAS Pan American Silver Corp. |
0.35 1.49% | 24.16 | - | 14.03 | 2.95 | 1.68 | 3.06 | 11.16 |
| NEM Newmont Goldcorp Corp |
0.73 1.40% | 53.03 | - | 11.61 | 4.29 | 2.48 | 4.55 | 26.44 |
| ZIJMF Zijin Mining Group Co Ltd-H |
0.32 17.44% | 2.16 | 16.00 | 16.89 | 0.15 | 2.75 | 0.20 | 1.78 |
| ZIJMY Zijin Mining Group Co Ltd ADR |
2.44 5.36% | 47.97 | 15.04 | 17.39 | 0.15 | 2.83 | 0.20 | 1.78 |
| AEM Agnico Eagle Mines Limited |
2.42 2.15% | 114.99 | 42.69 | 15.65 | 5.47 | 2.04 | 5.49 | 12.90 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
This report has been issued by StockNextt which has an Ontario Business Identification Number 1000958347 and British Columbia registration Number FM1051529 is a trade name under Kalkine Canada Advisory Services Inc. having Business Number 761925130BC0001. Kalkine Canada Advisory Services Inc. and StockNextt are collectively referred to as “StockNextt”, “we”, “us”, and “our”. The website https://stocknextt.com and associated pages are published by StockNextt. The information in this report and on the StockNextt website has been prepared from a wide variety of sources, which StockNextt, to the best of its knowledge and belief, considers accurate. StcokNextt has made every effort to ensure the reliability of information contained in its reports, newsletters, and websites. All information represents our views at the date of publication and may change without notice. The information in this report does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products. Our reports contain general recommendations for investing in securities and other financial products. StockNextt does not offer financial advice based upon your personal financial situation or goals, and we shall not be held liable for any investment or trading losses you may incur by using the opinions expressed in our reports, publications, market updates, news alerts and corporate profiles. StockNextt does not intend to exclude any liability which it is not permitted to exclude under applicable law or regulation. StockNextt’s general advice does not in any way endorse or recommend individuals, investment products or services for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional authorised financial planner and adviser. You should be aware that the value of any investment and the income from it can go down as well as up and you may not get back the amount invested. Please also read our Terms and conditions for further information. Employees and/or associates of StockNextt and its related entities may hold an interest in the securities or other financial products covered in this report or on the StockNextt website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Copyright © 2023 Krish Capital Pty Ltd. All rights reserved. No part of this website, or its content, may be reproduced in any form without our prior consent.
