Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

Pan American Silver (PAAS) has seen an encouraging start to the year with Q124 silver and gold production in line with management expectations and costs for both segments below its quarterly guidance. Q1 is typically one of the slowest quarters for PAAS and the company’s maintained guidance points to significant improvements in production and costs in H224. This should be supported by the current strength in commodity prices. We have increased our FY24 EBITDA estimate by 25% and upgraded our valuation from US$22.2/share to US$23.4. We believe there could be further upside to the share price if commodity prices remain at elevated levels and the company delivers on its operational guidance in FY24.

Pan American Silver (PAAS) has seen an encouraging start to the year with Q124 silver and gold production in line with management expectations and costs for both segments below its quarterly guidance. Q1 is typically one of the slowest quarters for PAAS and the company’s maintained guidance points to significant improvements in production and costs in H224. This should be supported by the current strength in commodity prices. We have increased our FY24 EBITDA estimate by 25% and upgraded our valuation from US$22.2/share to US$23.4. We believe there could be further upside to the share price if commodity prices remain at elevated levels and the company delivers on its operational guidance in FY24.

Pan American Silver - A taste of things to come

Pan American Silver (PAAS) has announced a sale of the La Arena and La Arena II projects to Zijin Mining for US$245m in cash, US$50m in a contingent payment and a 1.5% NSR gold royalty. La Arena II is a copper and gold sulphide deposit that sits underneath the currently producing La Arena gold project. We view the transaction as positive for PAAS, given La Arena’s very short mine life, significant capex required to bring La Arena II into production and the fact that copper is not PAAS’s core commodity.

Pan American Silver (PAAS) has announced a sale of the La Arena and La Arena II projects to Zijin Mining for US$245m in cash, US$50m in a contingent payment and a 1.5% NSR gold royalty. La Arena II is a copper and gold sulphide deposit that sits underneath the currently producing La Arena gold project. We view the transaction as positive for PAAS, given La Arena’s very short mine life, significant capex required to bring La Arena II into production and the fact that copper is not PAAS’s core commodity. 

Pan American Silver - La Arena divestment

Pan American Silver (PAAS) has released its FY23 financial results, which are in line with our estimates at the EBITDA level, an encouraging outcome given the operationally challenging year. While the bottom line was once again affected by non-cash one-offs, cash flow generation was robust, with FY23 operating cash flow of US$450m. We have slightly adjusted our FY24 estimates and rolled the model forward, resulting in a marginally updated valuation of US$22.2/share. The company’s decision to launch a buyback should partly compensate for the weak share price performance, which we believe does not reflect supportive gold market fundamentals and what is likely to be a year of more consistent operating performance.

Pan American Silver (PAAS) has released its FY23 financial results, which are in line with our estimates at the EBITDA level, an encouraging outcome given the operationally challenging year. While the bottom line was once again affected by non-cash one-offs, cash flow generation was robust, with FY23 operating cash flow of US$450m. We have slightly adjusted our FY24 estimates and rolled the model forward, resulting in a marginally updated valuation of US$22.2/share. The company’s decision to launch a buyback should partly compensate for the weak share price performance, which we believe does not reflect supportive gold market fundamentals and what is likely to be a year of more consistent operating performance.

Pan American Silver - FY23 results: Follow the cash flow

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Since mid-April we discussed how downside was limited on MSCI ACWI and EURO STOXX 50, and May 2nd discussed it was "quite possible" the lows were in.</li>
<li>Now, the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes have all broken out to new multi-year highs. Our bullish outlook (since early-November 2023) remains intact; expect higher prices ahead.</li>
<li>China (MSCI China) continues to lead the EM turnaround, and we remain bullish on the space. We highlight many large-cap EM buys within Communications, Technology, Discretionary; we remain bullish miners.</li>
</ul>


Since mid-April we discussed how downside was limited on MSCI ACWI and EURO STOXX 50, and May 2nd discussed it was "quite possible" the lows were in.
Now, the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes have all broken out to new multi-year highs. Our bullish outlook (since early-November 2023) remains intact; expect higher prices ahead.
China (MSCI China) continues to lead the EM turnaround, and we remain bullish on the space. We highlight many large-cap EM buys within Communications, Technology, Discretionary; we remain bullish miners.


Bullish Outlook Intact; EM and China Continue to Bottom; Buys in Comms, Tech, Discretionary, Miners

Pan American Silver (PAAS) provided an update on its FY23 operational performance and FY24 guidance. While total silver production came in below guidance at 20.4Moz and gold output of 883koz was within guidance, the main highlight of the results was the record Q4 gold sales of 270koz (FY23 894koz). FY24 production expectations for gold and silver are broadly in line with FY23 guidance ranges, while costs are seen growing further. Despite our expectations of near-term cost normalisation, industry cost pressures remain visible. We have therefore pared down our valuation of PAAS from US$23.5/share to US$22.0 on more conservative cost forecasts and reduced production projections, which is partly offset by our slightly more favourable commodity price assumptions.

Pan American Silver (PAAS) provided an update on its FY23 operational performance and FY24 guidance. While total silver production came in below guidance at 20.4Moz and gold output of 883koz was within guidance, the main highlight of the results was the record Q4 gold sales of 270koz (FY23 894koz). FY24 production expectations for gold and silver are broadly in line with FY23 guidance ranges, while costs are seen growing further. Despite our expectations of near-term cost normalisation, industry cost pressures remain visible. We have therefore pared down our valuation of PAAS from US$23.5/share to US$22.0 on more conservative cost forecasts and reduced production projections, which is partly offset by our slightly more favourable commodity price assumptions.

Pan American Silver - Consistent growth at higher costs

Canada

Pan American Silver Corporation is a primary silver producer.   The Company has seven operating mines in Mexico,  Peru, Argentina and Bolivia and several development projects in USA,  Mexico, Peru and Argentina.

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Pan American Silver (PAAS CN)

Pan American Silver - A taste of things to come

Pan American Silver (PAAS) has seen an encouraging start to the year with Q124 silver and gold production in line with management expectations and...

Edison Investment Research

Pan American Silver - La Arena divestment

Pan American Silver (PAAS) has announced a sale of the La Arena and La Arena II projects to Zijin Mining for US$245m in cash, US$50m in a...

Edison Investment Research

Pan American Silver - FY23 results: Follow the cash flow

Pan American Silver (PAAS) has released its FY23 financial results, which are in line with our estimates at the EBITDA level, an encouraging...

Edison Investment Research

Bullish Outlook Intact; EM and China Continue to Bottom; Buys in Comms, Tech, Discretionary, Miners

Bullish Outlook Intact $ACWI; EM and China Continue to Lead; U.S. Dollar (DXY), WTI Crude Oil, and Gasoline Prices Rolling Over; Buys in: Comms,...

Vermilion Research

Pan American Silver - Consistent growth at higher costs

Pan American Silver (PAAS) provided an update on its FY23 operational performance and FY24 guidance. While total silver production came in below...

Edison Investment Research

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