Pan American loss widens

Vancouver – With the price of silver at a 26-year low, Pan American Silver (PAA-T) continued to lose financial footing in the quarter ended March 31.

The company posted a loss of US$1.5 million, or 4 per share, in first quarter, compared with a loss of US$700,000, or 2 per share, in the corresponding period last year. The increased loss is attributed to lower silver and zinc prices, as well as the non-shipment of lead concentrates during the quarter.

Pan American realized US$4.16 per oz. silver and US46 per lb. zinc during the quarter, marking a 13% and 10% drop, respectively, from the year-ago period. The lead concentrate shipments slated for the first quarter were made in early April and will be accounted for during the second-quarter report.

The Quiruvilca mine in Peru cranked out 886,183 oz. silver in the recent quarter, compared with 915,404 oz. a year ago. Byproduct production came in at 5,659 tonnes zinc, 2,225 tonnes lead and 306 tonnes copper — basically unchanged from the year-ago period. Cash and production costs rose to US$3.66 per oz. and US$4.58 per oz., versus US$3.41 and US$4.21.

In Mexico, the company started limited production at the La Colorada underground silver project. The small-scale operation processed 3,506 tonnes of material grading 649 grams silver per tonne. Having ramped up production, the operation is cranking out about 70,000 oz. silver per month. Pan American is awaiting higher silver prices and envisions a full-scale 1,000-tonne-per-day operation cranking out 4.2 million tonnes silver annually over a nine-year mine life. Located in Zacatecas state, the project hosts 6.72 million tonnes grading 419 grams silver per tonne.

In April, Pan American’s Huaron silver mine in Peru started milling ore. Full-scale production of 50,000 tonnes per month is expected by mid-year. The company holds a 71.8% stake in the past-producing mine, some 300 km northeast of Lima. It hopes to crank out 4.3 million oz. silver and 18,000 tonnes zinc annually from the operation.