Pan American Silver - Significant resources upgrade at Skarn

Pan American Silver (PAAS) has upgraded its total mineral resources estimate at the La Colorada Skarn project to 227Moz in contained Ag from 141Moz (albeit at a lower silver grade), promoting a significant part of the resource into the indicated category. Despite the slight net positive effect of the resource upgrade on the valuation, we maintain our combined value of PAAS at US$27.5/share against the current backdrop of heightened commodity price volatility. While the silver price appears well supported at the current levels, gold remains under pressure due to the current environment of aggressive interest rate hikes.