Pan American Silver Reports First Quarter 2026 Financial Results; Strong Mine Operating Earnings Lead to Record Cash Balance and an Enhanced Shareholder Return Framework
Press Release
May 05, 2026
VANCOUVER, British Columbia–– Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) (“Pan American” or the “Company”) reports first quarter (“Q1 2026”) financial results. The Company will host a conference call and webcast on May 6, 2026 to discuss the results; details provided further in this news release.
“Q1 delivered solid results, driven by strong production, disciplined cost management, and improved quarter-over-quarter silver and gold prices,” said Michael Steinmann, President and Chief Executive Officer. “We are firmly on track to achieve our 2026 guidance, supporting continued momentum in free cash flow generation. In Q1, operations generated $488 million in free cash flow, bringing our cash and short-term investments to a record $1.8 billion, including $199 million attributable to our interest in Juanicipio.”
“Supported by a strong balance sheet and free cash flow, we are well positioned to invest in growth while enhancing shareholder returns. Today, the Board approved an updated capital allocation framework, targeting up to $1 billion in returns in 2026, through increased share repurchases alongside our meaningful dividend increase introduced last quarter, as described in detail in a separate news release issued today,” said Mr. Steinmann.
“This enhanced framework links shareholder returns to free cash flow while preserving capacity to fund growth, including the expansion of our La Colorada mine. In Q1, we released a revised Preliminary Economic Assessment for the La Colorada Skarn project, highlighting potential annual silver production of more than 19 million ounces during the peak five years from a combination of production from high-grade veins and skarn mineralization, which will make La Colorada one of the largest and lowest cost silver mines in the world. The Board has approved the initial spend of $265 million, out of a total estimated $1.9 billion investment, to begin construction of an internal ramp to access the skarn mineralization, marking a key milestone in advancing this high-quality project.”
The following highlights for Q1 2026 include certain measures that are not generally accepted accounting principles (“non-GAAP”) financial measures. Please refer to the section titled “Alternative Performance (Non-GAAP) Measures” at the end of this news release for further information on these measures.
Q1 2026 Results:
- Revenue of $1.2 billion and Attributable (1) revenue of $1.3 billion, inclusive of the Company’s 44% ownership share of revenue from Juanicipio. Revenue was reduced by the build up of approximately 644 thousand ounces of silver in inventory due to the timing of concentrate shipments.
- Net earnings of $456 million, or $1.08 basic earnings per share.
- Adjusted earnings(2) of $459 million, or $1.09 basic adjusted earnings per share.
- Cash flow from operations of $505 million (net of $29 million use of cash for working capital). Attributable (1) cash flow from operations of $582 million, inclusive of the Company’s 44% ownership share of cash flow from operations from Juanicipio.
- Attributable(1) free cash flow(2) of $488 million, inclusive of the Company’s 44% ownership share of free cash flow from Juanicipio.
- Production on track to meet 2026 guidance (3). Attributable(1) silver production was 6.44 million ounces and Attributable(1) gold production was 169.2 thousand ounces.
- Silver Segment all-in sustaining costs (“AISC”)(2)(4) were $6.63 per silver ounce, which is lower than the Company’s 2026 Quarterly Operating Outlook (3), reflecting the impact of by-product metals from higher gold prices and a greater contribution of low-cost ounces from Juanicipio.
- Gold Segment AISC(2)(5) were $1,851 per gold ounce, in line with the Company’s 2026 Quarterly Operating Outlook (3).
- Record high cash and cash equivalents and short-term investments of $1.6 billion as at March 31, 2026, excluding $199 million of cash for the Company’s 44% interest in Juanicipio, and total available liquidity (2) of $2.4 billion.
- Total shareholder returns of $101 million through dividends and share repurchases.
ENHANCED SHAREHOLDER RETURN FRAMEWORK
On May 5, 2026, the Company’s Board of Directors approved an enhanced shareholder return framework (the “Shareholder Return Framework”) targeting the return of 35% to 40% of annual Attributable Free Cash Flow(1)(2) to shareholders through a combination of dividends and common share repurchases under Pan American’s NCIB that began on March 6, 2026. Based on the Shareholder Return Framework target and assuming that the current strong free cash flow generation continues, Pan American anticipates returning up to $1 billion to shareholders in 2026.
Under the Shareholder Return Framework for 2026, Pan American expects to pay aggregate dividends of $305 million during the year, paid in equal quarterly installments (currently equivalent to $0.18 per common share per quarter). Excess Attributable Free Cash Flow(1)(2) that is not distributed through dividends will be allocated to common share repurchases, at the Company’s discretion, through the NCIB. Please see the news release dated May 5, 2026 for further details.
A cash dividend of $0.18 per common share, or $76 million in aggregate, with respect to Q1 2026 was declared on May 5, 2026, payable on or about June 1, 2026, to holders of record of Pan American’s common shares as of the close of markets on May 19, 2026. The dividends are eligible dividends for Canadian income tax purposes. The declaration, timing, amount and payment of any future dividends remain at the discretion of the Company’s Board of Directors.
On March 6, 2026, the Company renewed its normal course issuer bid (the “NCIB”) until March 5, 2027 for the ability to purchase up to 21,090,323 of its common shares for cancellation. In Q1 2026, 460,200 common shares were repurchased for cancellation under the NCIB at an average price of $54.04 per share for a total consideration of $25 million, leaving 20,630,123 common shares available under the current NCIB.
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(1) |
References to “Attributable” refer to the Company’s ownership share of results, which includes results from the operations that the Company has a 100% interest in, as well as from the operations, specifically Juanicipio and San Vicente, that the Company does not own a 100% interest in. |
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(2) |
Adjusted earnings, Attributable free cash flow, AISC, working capital and total available liquidity are non-GAAP measures; AISC are presented on an Attributable basis; please refer to the “Alternative Performance (Non-GAAP) Measures” section of this news release for a description of the composition and usefulness of these non-GAAP measures; please also refer to the MD&A for the period ended March 31, 2026, for a detailed reconciliation of these measures to the Q1 2026 Financial Statements. |
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(3) |
The 2026 Operating Outlook and the 2026 Quarterly Operating Outlook were provided in the Company’s MD&A dated February 18, 2026. |
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(4) |
Silver Segment AISC are calculated net of credits for realized revenues from all metals other than silver and are calculated per ounce of silver sold on an Attributable basis. |
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(5) |
Gold Segment AISC are calculated net of credits for realized revenues from all metals other than gold and are calculated per ounce of gold sold. |
PAN AMERICAN SILVER APPOINTS IGNACIO BUSTAMANTE TO ITS BOARD OF DIRECTORS
Pan American is pleased to announce that Mr. Ignacio Bustamante was appointed to its Board of Directors at the Company’s Annual and Special Meeting of Shareholders held on April 30, 2026.
Mr. Bustamante is the Head of Base Metals for Appian Capital Advisory, based in London. Prior to joining Appian, Mr. Bustamante was CEO and Board Member of Hochschild Mining Plc (“Hochschild”) in Lima, Peru (2010-2023), having occupied other positions in Hochschild before his appointment, including as Chief Operating Officer (2008-2010) and General Manager of its Peruvian Operations (2007-2008). Before that, Mr. Bustamante was President of Zemex Corporation (USA), and Chief Financial Officer of Cementos Pacasmayo (Peru). Mr. Bustamante is currently on the Board of Antofagasta plc, and previously held Board positions with Hochschild, Aclara Resources (TSX), Lake Shore Gold (TSX), Scotiabank Peru, Profuturo AFP, Colegio Roosevelt, among others. Mr. Bustamante holds a B.S. in Business and Accounting from Universidad del Pacifico (Peru), and an MBA from Stanford University (USA).
PROJECT UPDATES
In Q1 2026, the Company invested $27 million of project capital at the following operations: Juanicipio, La Colorada, Jacobina, Huaron, Timmins, Cerro Moro and Shahuindo. Progress achieved on the main projects during Q1 2026 is described below.
La Colorada, Mexico
In addition to continued exploration drilling of the La Colorada vein mine, the Company invested $8 million of project capital on the La Colorada Skarn Project in Q1 2026, largely for exploration and in-fill drilling and advancing engineering work. The Company announced the results of a revised Preliminary Economic Assessment (“Revised PEA”) for the future development of the 100% owned La Colorada property on March 24, 2026. The Revised PEA includes a portion of the mineral resources from the La Colorada vein mine, mainly comprised of inferred mineral resources, as well as high-grade portions of the skarn deposit mineral resources. The Revised PEA envisions combining development of the newly identified silver mineral resource in the eastern Candelaria area of the existing La Colorada mine concurrently with the higher grade portions of the skarn deposit, using conventional long-hole open stoping, and the construction of a new, 15,000 tonnes per day plant (the “La Colorada Skarn Project”). Production from the existing La Colorada vein mineral reserves would continue throughout construction, commissioning and well into the operation of the La Colorada Skarn Project, resulting in an overall expansion of La Colorada (collectively, the “Expanded La Colorada Mine”). The Expanded La Colorada Mine is anticipated to significantly increase silver production, averaging 19.1 million ounces annually during the peak five years following construction and ramp-up, and extend mine life. The Company anticipates that it will release an updated technical report within 45 days of the March 24, 2026 news release.
On April 27, 2026, the Company’s Board of Directors approved $265 million of project capital to be spent over the next five years to complete one of the critical path works of developing a decline to access the skarn deposit that will be initiated from the existing vein mine 588RL drift (approximately 588 metres below surface) (the “588 Decline Project”). The 588 Decline Project primarily involves 12.4 kilometres of decline and required ancillary development to access the three Skarn deposits (901, 902, and 903), provide development for ventilation and to ultimately connect to the bottom of an “East Hoisting Shaft” at approximately 1,350 metres below surface, which would be sunk within the same period. In addition, the 588 Decline Project will include installation of strategically staged dewatering pump stations and necessary power supply that will form a key part of the life-of-mine dewatering and power supply needs for the entire mine. The Company now anticipates spending between $92 to $95 million on the La Colorada Skarn Project in 2026, including spending on the 588 Decline Project, an increase of $45 million from the original $47 to $50 million guidance disclosed in Pan American’s MD&A dated February 18, 2026. In addition to the 588 Decline Project, the Company will continue advancing engineering to allow for staged approvals of other critical path items to achieve the production timeline presented in the Revised PEA.
Jacobina, Brazil
In Q1 2026, project capital of $12 million was focused on enhancing infrastructure and making certain plant improvements, while advancing studies for overall long-term operational optimizations. The key project advances during Q1 2026 included: construction of two new carbon-in-pulp tanks, improvements to the tailings pump system, engineering for upgrading the main substation and motor control center, and further exploration in-fill drilling activities directed towards expanding the mineral reserve and mineral resource base. In addition, the process plant optimization program, focused on streamlining and simplifying the process plant flow sheet, is progressing through conceptual engineering. A significant evaluation of this intensive brownfield project is being undertaken to develop an approach to upgrade the existing process plant circuitry and remove obsolete equipment in isolated stages to avoid significant disruptions to ongoing operations. Meanwhile, a filtration plant, filtered tailings stack, and temporary mine paste backfill preparation plant are being evaluated independently of the process plant upgrade projects. The conceptual engineering phase of these projects is nearing completion and will advance into detailed engineering over the next few months.
Escobal, Guatemala
The government of Guatemala continued to hold meetings for the Escobal ILO 169 consultation process. The Ministry of Energy and Mines (“MEM”) has not provided a schedule to conclude the consultation process, but has indicated that it held several meetings with the Xinka Parliament in preparation for further bilateral meetings between government institutions and the Xinka Parliament. Members of the Xinka Parliament and the MEM visited the Escobal mine in March 2026 to conduct another inspection of ongoing care and maintenance activities and to confirm compliance with the court-ordered suspension. There is currently no date for a restart of operations at the Escobal mine.
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