Pan American Silver (PAAS) Earnings Transcript

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DATE

Thursday, February 19, 2026 at 11 a.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Michael Steinmann
• Vice President, Investor Relations and Corporate Communications — Siren Fisekci
• Chief Financial Officer — Ignacio
• Senior Vice President, Business Development and Geology — Wayne Lam
• Chief Operating Officer — Steven Busby

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TAKEAWAYS

• Net Earnings -- Record $452,000,000 in Q4, or $1.07 per basic share, including $61,000,000 income from the Juanicipio investment.
• Adjusted Earnings -- $470,000,000 in Q4, or $1.11 per share; $969,000,000 for the year, or $2.54 per share.
• Attributable Free Cash Flow -- Record $553,000,000 in Q4 and $1,200,000,000 for the year.
• Cash Position -- Cash and short-term investments up $480,000,000 sequentially to $1,300,000,000 at year-end, or $1,400,000,000 including Juanicipio share.
• Dividend -- Declared $0.18 per common share, marking the third consecutive quarterly increase.
• Silver Production -- Attributable output reached 22,800,000 ounces for the year, above revised guidance.
• Gold Production -- 742,200 ounces attributable, in line with stated guidance.
• Silver Segment All-in Sustaining Cost (AISC) -- $9.51 per ounce in Q4; $13.88 per ounce for the year, excluding NRV inventory adjustments, below reduced guidance.
• Gold Segment AISC -- $1,699 per ounce in Q4; $1,621 per ounce for the year, excluding NRV inventory adjustments, within guidance range.
• Juanicipio Performance -- Outperformed initial expectations since acquisition in September 2025, driving positive financial impact.
• Project Capital Expenditure -- Invested $94,000,000 broadly aligned with guidance, with priority at La Colorada for phased Skarn development.
• La Colorada Skarn -- Management plans a phased approach with phase one targeting higher grade, lower tonnage (expected 10,000-15,000 tons per day), and lower initial capital; updated technical report and PEA to be released in Q2 2026.
• 2026 Silver Guidance -- Attributable production forecast at 25,000,000-27,000,000 ounces and segment AISC projected at $15.75-$18.25 per ounce.
• 2026 Gold Guidance -- Attributable production expected at 700,000-750,000 ounces and segment AISC guided at $1,700-$1,850 per ounce.
• Operational Drivers -- Production growth attributed to a full year's contribution from Juanicipio, and higher silver grades at Cerro Moro, offset by lower volumes at Dolores and El Peñón.
• Royalties and Costs -- Q4 expenses were higher due to royalties, worker participation, and increased smelting/refining linked to elevated metal prices.
• Escobal -- The Ministry of Energy and Mines confirmed operations are compliant with the court order, and that the consultation process continues without a restart timeline.
• Future Catalysts -- Management highlighted the pending La Colorada Skarn PEA update in Q2 2026, additional Jacobina optimization study findings, and increased exploration spending as 2026 drivers.

SUMMARY

Pan American Silver Corp. (NYSE:PAAS) delivered all-time high Q4 and annual results, with record net and adjusted earnings as well as free cash flow, attributed to operational outperformance and significantly higher metal prices. Management communicated confidence in sustaining strong results through 2026, supported by planned production increases—particularly from Juanicipio and Cerro Moro—a robust cash position, and a higher dividend payout policy. The company is advancing key projects with milestones expected, including a Q2 2026 technical update on La Colorada Skarn and ongoing optimization at Jacobina, while monitoring escalated costs tied to royalty and profit-sharing obligations. No change was disclosed in the status or expected timeline for Escobal's consultation process.

• Wayne Lam stated, "the engagement continues" with Guatemalan regulators at Escobal, and a year-end government report offers transparency on ongoing consultation activities, but no date for restart was indicated.
• Management emphasized that average Q4 realized metal prices were around $25 for silver, and a bit more than $2,100 for gold, with both commodities priced higher so far in 2026.
• Pan American Silver Corp. confirmed it remains unhedged on gold and silver, aiming to maximize leverage to further price increases.
• Management disclosed a focus on increased exploration investment across assets in 2026, specifically highlighting Cerro Moro, and satellite deposits at Timmins.
• The company confirmed willingness to consider repurchasing $727,800,000 of 4.6% senior notes maturing in 2027 if market opportunities arise, but noted low bond market liquidity as a constraint.

INDUSTRY GLOSSARY

• All-in Sustaining Cost (AISC): An industry-standard metric reflecting the total cost to produce an ounce of metal, including direct mining, royalties, sustaining capital, and overhead.
• Preliminary Economic Assessment (PEA): An early-stage technical and economic study to evaluate the potential economic viability of a mineral project prior to more detailed feasibility studies.
• Skarn: A type of mineral deposit formed by chemical exchange between rocks, often hosting significant silver and base metal mineralization.
• NRV Inventory Adjustments: Net realizable value adjustments reflecting the estimated selling price of inventory less associated costs.

Full Conference Call Transcript

Michael Steinmann: I am glad you could join us to discuss Pan American Silver Corp.’s 2025 results and our outlook for 2026. I will start with the headline. We delivered record financial results across the board in Q4 and for the full year 2025 reflecting strong execution of our business and meaningful margin expansion from higher metal prices. Net earnings were a record $452,000,000 in Q4 or $1.07 per basic share, which included $61,000,000 of income from our investment in Juanicipio. For the full year, net earnings were a record $980,000,000 or $2.56 per basic share. On an adjusted basis, earnings were $470,000,000 in Q4, or $1.11 per share, and for the full year $969,000,000 or $2.54 per share.

The record financial results reflect both the operating strength of our assets and the leverage we have to metal prices. Importantly, that translates into record attributable free cash flow of $553,000,000 in Q4 and $1,200,000,000 for the full year. Cash and short-term investments increased by $480,000,000 from Q3, totaling $1,300,000,000 at year end or $1,400,000,000 including our 44% interest in cash at Juanicipio. To allow shareholders to participate directly in rising net cash levels, we declared a dividend of $0.18 per common share, our third dividend increase in a row.

Turning to operating performance, attributable silver production of 22,800,000 ounces in 2025 exceeded the top end of the guidance range we increased in November, while attributable gold production of 742,200 ounces was within guidance. Silver segment all-in sustaining costs, excluding NRV inventory adjustments, were $9.51 per ounce in Q4, and $13.88 per ounce for the full year. Silver all-in sustaining costs in 2025 were below the decreased guidance.

Operator: A key contributor

Michael Steinmann: here is Juanicipio, which has been performing better than expected since we acquired the mine in September 2025 through the MAG Silver transaction. For the gold segment, all-in sustaining costs, excluding NRV inventory adjustments, were $1,699 per ounce in Q4 and $1,621 per ounce for the full year, which was within our guidance for 2025. It is worth noting that both silver and gold segment costs in Q4 were impacted by higher royalties and worker participation expenditures, reflecting the increase in metal prices.

The silver segment was also affected by additional royalties at La Colorada related to mining an adjacent concession, where we pay the concession owner a share of net profits earned on ores from their concession, which we treat as a royalty expense. Royalties are also impacted at San Vicente to reflect profit sharing with the state-owned mining company, COMIBOL. In 2025, we made good progress on our major projects, investing $94,000,000, in line with our guidance, to advance several major projects. Most notably at La Colorada, where the discovery of multiple high-grade silver zones and the subsequent expansion of mineral resources have led us to reevaluate the development plans for the Skarn project.

We now see an opportunity to integrate the mine plans and infrastructure of the La Colorada vein mine with the Skarn project through a phased approach to development. The phased approach would allow us to focus on higher grade, lower tonnage, and less capital-intensive initial stage, with the option to target lower grade material in a future expansion. We are aiming to release an updated technical report for La Colorada in 2026 to include a preliminary economic assessment of the new development approach for the Skarn project. We are also continuing discussions with our potential partners on this project to include the proposed changes.

At Jacobina, our investment in 2025 was redirected at strengthening operational reliability and to advance long-term growth initiatives. We have provided more details on these initiatives in our MD&A, so I will not run through them item by item. But at a high level, they include plant upgrades, tailings filtration and filter stack, and a paste backfill plant. At Escobal, the Guatemalan Ministry of Energy and Mines continued meetings in Q4 2025 to advance the 169 consultation process, and in December 2025, posted an update on progress for the October 2024 to November 2025 period. The Ministry also conducted an inspection in Q4 and confirmed our activities are compliant with the court order and suspension of operations.

As we have said previously, there is no timeline for completion of the consultation process and no date for restart. Turning to 2026 guidance, for silver, we are guiding attributable production of 25,000,000 to 27,000,000 ounces and silver segment all-in sustaining costs of $15.75 to $18.25 per ounce. The year-over-year increase in silver production reflects, in part, the full-year contribution from Juanicipio along with mine sequencing into higher silver grade at Cerro Moro. For gold, we are guiding attributable production of 700,000 to 750,000 ounces and gold segment all-in sustaining costs of $1,700 to $1,850 per ounce.

We expect higher grades at Timmins plus a full year of production from Juanicipio, offset by a lower contribution from Dolores as residual leaching declines and at El Peñón from the exhaustion of low-grade stockpiles and lower ore tonnes processed. Our all-in sustaining cost guidance for both the silver and gold segments reflects higher metal price assumptions, which flow through to royalties, worker participation payments, and increased smelting and refining costs due to price participation. Needless to say, increased metal prices far outweigh these additional royalties and provide superior returns to our business, as seen with record earnings and cash flow in Q4. Sustaining capital is expected to be similar to 2025 with the addition of capital for Juanicipio.

We also plan increased project capital to advance La Colorada’s Skarn and Jacobina and at Timmins, with part of the increase directed towards satellite deposits reflecting positive drill results and continued work on exploration and preliminary engineering. Please refer to our MD&A for further detail on our 2026 outlook, including an operating outlook by quarter. As we look ahead, we see several meaningful catalysts for 2026. First, with metal prices currently well above Q4 and last year’s average, we see potential for strong free cash flow and high returns of capital to shareholders while also funding an expanded exploration program, internal growth projects, and further strengthening of our balance sheet.

Second, we expect to release an updated La Colorada Skarn PEA in Q2 2026, which we believe will demonstrate higher risk-adjusted returns than the original PEA for the project. And third, the Jacobina optimization study is advancing well and we look forward to sharing findings and opportunities as the engineering work progresses. Before I wrap up my prepared remarks, I would like to provide a few thoughts on the metal price environment. This is an exceptionally fortunate period for Pan American Silver Corp. and our investors, as the increase in metal prices coincides with increased silver production, driving higher levels of free cash flow.

Gold’s strength has been driven by sustained central bank purchases and renewed investor interest, the volatility of the political backdrop, U.S. policy uncertainty, and weakening confidence in fiat currencies, particularly the U.S. dollar. Those underlying drivers are similarly supportive for silver, in addition to supply-demand fundamentals with the silver market expected to remain in a deficit for the sixth consecutive year in 2026. We are well positioned in this environment, remaining unhedged on both gold and silver and with a focus on delivering margin expansion. To close, 2025 was a record year for Pan American Silver Corp.: record revenue, earnings, and free cash flow paired with strong operating execution and a stronger balance sheet.

We are entering 2026 from a position of strength with a clear plan to execute safely and reliably, generate strong cash flow, advance our high-quality growth pipeline, and return capital to shareholders in a disciplined way. We will now open for questions.

Operator: We will now begin the question-and-answer session. To join the queue, please press star and then one. Our first question today comes from Cosmos Chiu from CIBC. Please go ahead with your question. Great. Thanks, Michael and team,

Michael Steinmann: congrats on a very strong

Operator: 2025.

Michael Steinmann: And looking forward to 2026. Maybe my first question is on Juanicipio. Michael, as you mentioned, very strong results so far. So it has been about half a year now. How would you describe your overall experience with the asset so far? And what has exceeded expectations? Is it throughput or is it grade? Or is it both?

Operator: And is that sort of outperformance sustainable?

Michael Steinmann: Yeah. Good morning, Cosmos. Yeah, it is a bit less actually than half a year. I think we took over September, somewhere around there, from MAG. Great experience so far. As you can see in the results, I am very, very happy with what I see. I am continuously very happy with what I see. But Juanicipio is producing. Of course, when you look at long-term production profiles and the geology of this kind of deposits, and by the way, that is the same for a deposit like La Colorada. When you look at that geology, that is a clear zonation with metals.

So you go from precious metals to more base metals, lead, zinc, and deep down, you would go into copper, really, really deep down. So that is kind of the geology on this kind of deposits. So over long term, that changes you see, but exploration, of course, you know, a good example is La Colorada again for that, or the neighboring mines of Juanicipio as well. With the exploration, you keep finding new veins as well, which again have higher precious metal content on the top and then go deeper down into base metal. So over long term, we should obviously expect that the silver grades will be reduced and the base metal grades increase.

But that is, you know, you can look that up in the technical report for it, but as you said, last year, this year, it looks like a very strong silver producer for us and very low cost. Perfect. And then good that you brought up La Colorada. I want to ask a question about La Colorada Skarn. As you mentioned, a new technical report is coming out sometime in Q2 2026. But ahead of it, I do not know how much you can share with us, Michael, but, you know, what kind of, in terms of that phased approach, you know, what kind of different tonnages are you sort of evaluating?

What kind of size are you sort of evaluating at this point in time?

Operator: What is kind of, like, the,

Michael Steinmann: you know, cost-benefit analysis are you considering right now? And you know, what can we expect when that comes out? Sure, Cosmos. And yeah. You need to be patient a little bit more, a few more months here, it is coming soon, and it is a very exciting project. And that phased approach really has changed the project quite a bit. If you recall, the original PEA called for, you know, up to 50,000 tons a day, very, very large bulk-mineable orebody. Of course, that is still the case. It is still a very, very large, like, even bigger now bulk-mineable orebody.

But over the last two years, we have discovered a lot of high-grade material inside the Skarn and also between the Skarn and the surface in additional structures. And that is really what we are going to mine in phase one. So it is going to be quite a long time for phase one, it is going to be way more than a decade. And when you look at tonnage, I do not have the final numbers yet, but you should probably expect somewhere in the 10,000 to 15,000 ton kind of range for phase one, but substantially higher grades than what we showed in the very large bulk, you know, kind of cave method in the first PEA.

So it will be higher grade, less capital, and very focused on silver production for quite a long time before it will go to a more bulk-mineable, much bigger tonnage, and more base metal rich production after that. Right.

Operator: Sir,

Michael Steinmann: more to it, Michael. And then maybe one last question. You know, when I look at your 2026 guidance, I look at the asset-level production compared to 2025 guidance. One asset that is expected to increase year over year is Cerro Moro,

Operator: you know,

Michael Steinmann: I guess this is your only asset in Argentina, but Argentina looks to be getting better.

Operator: As a country for mining. So I guess

Michael Steinmann: my question is, you know, is this a country or an asset where you might be willing to commit more time and resources into it, or, you know, how should we look at it? Well, Cosmos, in general, I am always happy to commit time and exploration to any of our assets. You know, we have been incredibly successful over the last 20 years in replacing reserves and adding additional value to our brownfield exploration programs, and La Colorada Skarn is the best example in the company’s history with a, you know, potential huge value creation through the drill bit. So I am always happy to continue to drill and explore in our assets.

And, of course, in the current metal price scenarios, that is even more so. So you have probably seen that we assigned quite an increase of capital to our exploration programs for 2026, and that includes, for sure, Cerro Moro as well. So as you say, lots of positive changes in Argentina. And, you know, a place that we are active and working for many, many years and, yeah, looking forward to more positive exploration results from Cerro Moro as the year goes on. Great. Thanks again, Michael. Those are all the questions I have.

Siren Fisekci: Thank you.

Michael Steinmann: Thanks, Cosmos.

Operator: Our next question comes from Francisco Costanzo from Scotiabank. Hi, Michael. Thanks a lot for taking my question. Just wanted to ask

Wayne Lam: a follow-up on one of Cosmos’ questions actually. Just on La Colorada Skarn. Have discussions on a potential partner progressed in the last quarter? And is there any update you can provide us on what the economic terms might look like given the new phased approach or timing of when we might see a deal signed?

Michael Steinmann: Yeah. Look. The discussions have progressed, but as you can imagine, with the change we made here on this phased approach, compared to the single approach we had before, there has to be quite some changes in how we look at that partnership and in that discussion on how that would fall out. So discussions are in full swing, so I do not really want to share right now details yet on it. But, you know, we included that change on the approach and are in full discussions.

Wayne Lam: Okay. Fair enough. Thank you. And then just switching gears slightly. With record silver prices, there is obviously a lot of value sitting in the ground at Escobal. So just wondering if you are able to provide us any insights on your view of how the consultation process has progressed in recent months and whether you feel things are beginning to reaccelerate compared to this time last year.

Michael Steinmann: Well, in general, of course, and we see it worldwide, right, that there is much stronger emphasis on mining and mining projects. High metal prices, of course, help it. A lot of declaration of critical minerals across the globe, and countries that try to secure future metal production for their own use. So that will accelerate from now on. I am sure about that. And, you know, will bring additional projects into production across the globe. I bet the IR so I am giving us some more details on that as special.

Wayne Lam: Yeah. We have been meeting with the Ministry of Energy and Mines through Q4 and a few times earlier this year. We are standing by for the next updates for meetings and schedules for activities. So there is not a change in the activity that we have seen in the past, but, you know, certainly, the engagement continues. And I think the report that was published by the Ministry of Energy and Mines at the end of the year is encouraging that they are providing some information from the government on their commitment to the process and the status of the process and the fact that it is ongoing.

So we are looking forward to meetings here in the coming months and progressing with the process.

Michael Steinmann: Yeah. That is great.

Wayne Lam: Thanks a lot for taking my questions.

Michael Steinmann: Thank you.

Operator: Our next question comes from Don DeMarco from National Bank. Please go ahead with your question. Thank you, operator, and good morning, Michael and team.

Wayne Lam: Just a couple of financial bookkeeping questions.

Operator: First off, how often are the Juanicipio dividends paid? I mean, I see that there was a line item

Wayne Lam: on the Q4 financials, full year financials, not on the Q3 financials. And I remember back in the MAG Silver days, where there were some agreements at the JV level just to pay out those dividends once a year, although there were some discussions to maybe change that more quarterly. But I am just wondering what the current arrangement is at this point.

Operator: Hi, Don. It is Ignacio here speaking. The payments from Juanicipio come in the form of dividends. And there was a payment in Q4. Pan American Silver Corp.’s share of that payment was around $44,000,000. Right now, the dividends are being paid out of tax-paid retained earnings. And we are currently waiting for Juanicipio to pay its tax. So soon after that, we are expecting another dividend and book its tax return, which will happen sometime in Q1 from Juanicipio.

Michael Steinmann: Which would be

Operator: higher than the one we received in Q4. So right now, it is just being driven by the regular cycle of the financial statements and the tax returns in Mexico.

Wayne Lam: Okay. Got it. Thank you. And, Ignacio, also,

Operator: looking at you have got the senior notes maturing, $727,800,000 at a 4.6% coupon.

Wayne Lam: You know, obviously, with your free cash flow and, you know, cash balance increasing,

Operator: would this be a consideration to potentially repay early?

Wayne Lam: I mean, obviously, the August ’31 have a very favorable rate. There would be no motivation there. But wondering about these 2027s.

Michael Steinmann: Yes. Don, that is something that we look at from time to

Operator: time. They are, as you have mentioned, they are coming up in 2027. The bonds are not very liquid. We know that.

Michael Steinmann: So

Operator: if an opportunity came where a bondholder was interested in potentially selling, we would consider it for sure. But this comes down to bigger capital allocation questions, which are coming up this year.

Steven Busby: So, look, if the opportunity came up to buy some of those bonds back of 2027, we would consider it for sure. But as I said, the bonds have not been trading with a lot of liquidity in the market.

Wayne Lam: Okay. Okay. Great. Well, thanks again for taking my question. That is all for me.

Michael Steinmann: And with that, we will be concluding today’s question and answer

Operator: session. I would like to turn the floor back over to Michael Steinmann for any closing remarks.

Michael Steinmann: Thanks, operator. Strong production and cost control in Q4, in combination with high metal prices, resulted in record financial results across the board, as you have seen in the press release, and I am really proud of what we have achieved in 2025, including the very swift and quick integration of the 44% of the low-cost Juanicipio. So please keep in mind that the average metal prices in Q4 were only around $25 for silver and I think a bit more than $2,100 for gold.

So we have seen substantially higher metal prices in the new year so far, and additionally, we will be increasing our silver production again by about 14%, largely driven again by the low-cost production of Juanicipio, and to top that, we will release the updated PEA in La Colorada in Q2 and further information on the Jacobina optimization as the year advances. So you can imagine I am really looking forward to 2026. I am looking forward to give you an update on Q1 in our May call. Until then, have a good time. Thanks everyone for calling in.

Operator: This brings to a close today’s conference call. You may now disconnect your lines. Thank you for participating. Have a pleasant day.

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