Pan American Silver - Q122 results – good cost control

Pan American Silver’s (PAAS’s) Q122 financial results were supported by strong gold and silver sales, while production was affected by the latest COVID-19 outbreak. The company maintained its guidance for FY22 and expects production to be second-half weighted. Costs were generally under control, with an impressive cost performance in the silver segment. Although PAAS is seeing increased cost pressures, its full-year cost expectations remained unchanged. We have updated our estimates to reflect the results and lower commodity prices, reducing our valuation from US$31.0/share to US$29.5/share. Following the recent weakness, the shares look attractive at an FY22e EV/EBITDA of 7.5x.