Pan American Silver Corp

Pan American Silver Corp (NYSE: PAAS) is a major precious metals producer focused on silver and gold mining throughout the Americas, operating mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile, and Argentina. The company also owns the Escobal mine in Guatemala outright and holds stakes in several additional exploration and development projects. Its operations are organized into three primary segments: Silver, Gold, and Other.

As per previous US Inflation Report published on ‘PAAS’ on Oct 10, 2025, Kalkine provided an ‘Buy’ stance on the stock at USD 38.55 based on fundamental analysis and the stock price has now moved up by ~ 19.53% since then.

Noted below are the details of support and resistance levels provided in our previous report:

Rationale:

• Margin Pressure in Gold Segment: Pan American continues to face elevated cost pressures within its Gold Segment, where All-In Sustaining Costs (AISC) rose to USD 1,697 per ounce, significantly higher than the prior year. These heightened costs, driven by operational inefficiencies and higher input expenses at assets such as Timmins and Minera Florida, continue to compress margins despite strong realized gold prices. The persistent cost inflation underscores the variability of the company’s cost structure and the operational challenges in certain mines.
• Production Softness in Key Gold Operations: The company’s Attributable gold production declined to 183.5 thousand ounces from 225.0 thousand ounces in the prior-year quarter, reflecting operational underperformance in several sites. Lower grades and mine sequencing constraints weighed on output at select operations, reducing overall Gold Segment contribution. This production softness may limit the company’s ability to fully capitalize on stronger metal prices and could signal further operational volatility ahead.
• Ongoing Strategic Uncertainties and Project Delays: Pan American continues to face uncertainty surrounding the Escobal mine, where progress remains stalled due to regulatory and community consultation delays under the ILO 169 process. The absence of a clear timeline for restarting this major asset represents a material downside risk to future growth and revenue diversification. Additionally, the La Colorada Skarn project has been revised into a two-phase development plan, reflecting the need to adopt a more capital-constrained and risk-managed approach due to project complexity.
• Capital Allocation Constraints and Limited Buyback Activity: Despite strong cash generation, the company’s capital allocation strategy remains partly constrained by acquisition-related blackout periods and elevated debt levels of USD 857 million. As a result, no shares were repurchased in Q3 2025, limiting shareholder returns outside of dividends. The higher debt burden and the absence of buyback activity may reduce financial flexibility going forward, particularly if metal prices weaken or cost pressures intensify.

Valuation (Using EV/Sales Multiple)

Share Price Chart 

Conclusion

Pan American Silver faces several operational and strategic headwinds despite its strong cash performance. Elevated AISC levels in the Gold Segment, coupled with declining gold production, point to persistent cost pressures and operational inefficiencies across key sites. The prolonged uncertainty surrounding the Escobal restart continues to weigh on the company’s long-term growth visibility, while phased revisions to the La Colorada Skarn project highlight execution and capital-intensity risks. Additionally, limited share repurchases amid a higher debt load underscore constrained capital flexibility, collectively tempering the company’s near-term outlook.

Based on the notional gains, valuation downside and price action stance, a "Sell" recommendation on Pan American Silver Corp (NYSE: PAAS) has been given at the closing market price of USD 46.08 as on 01 December 2025.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 01 December 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.