Pan American Silver — First contribution from Juanicipio

Pan American Silver’s Q325 results saw the initial 27-day contribution from the recently acquired 44% interest in the Juanicipio project, which boosted its attributable silver production by c 10% and lowered the silver segment all-in sustaining cost (AISC) to an impressive US$15.4/oz. EBITDA adjusted for equity investment in the project was up 51% y-o-y and 11% q-o-q. We have upgraded our estimates on higher commodity prices and Juanicipio, raising our discounted cash flow (DCF)-based valuation of PAAS from US$38.0/share to US$43.5/share. The company is also evaluating a two-stage development approach for Skarn to maximise the value of the combined deposit, which, in our view, is not yet full priced in by the market.