Pan American Silver - Bigger scale, stronger profitability

Pan American Silver (PAAS) completed the Yamana transaction at the end of March, continuing its track record of timely and value-accretive acquisitions that add scale and improve profitability. With the full annualised contribution from the Yamana assets, we estimate PAAS will produce c 25Moz of silver and 1.1Moz of gold in FY24. The anticipated launch of Escobal (FY25e) could further increase silver production to above 40Moz, bringing PAAS closer to the industry leader, Fresnillo. In this note we reinstate our estimates and update our valuation to reflect the Yamana acquisition. Our sum-of-the-parts valuation is now US$22.5/share.