Pan American Silver’s Gold Production and Revenue Set to Decline

Pan American Silver

Canadian mining company Pan American Silver (NYSE: PAAS, TSX: PAAS), is poised to experience a slowdown and subsequent decline in its gold production, driven by the sale of its La Arena mine in Peru and the end of mining operations at its Dolores mine in Mexico. Together, La Arena and Dolores mines accounted for 23% of Pan American’s total gold production and 11% of the company’s silver production in 2023. In May, Pan American divested its La Arena mine to a subsidiary of Zijin Mining Group, Jinteng (Singapore) Mining. The transaction, pending regulatory approvals, is expected to close by the third quarter of 2024.

Gold is a crucial revenue source for Pan American, constituting 67% of its total revenue in 2023. Analysts expect Pan American to produce approximately 897 thousand troy ounces (Kozt) of gold in 2024, marking a +2% increase from the previous year. This growth rate is considerably lower than the +60% growth seen in 2023. Analysts also forecast a -7% decrease in gold production in 2025, with production expected to continue declining in subsequent years.

In terms of revenue, gold is anticipated to generate $2 billion in revenue, growing by +28% year over year in 2024. However, for 2025, gold revenue is expected to decline by -3%, with stronger revenue declines anticipated in the years ahead. Overall, Pan American’s total revenue is forecasted to grow by +13% in 2024, reaching $2.6 billion, but growth is expected to fall sharply in 2026 and beyond, impacted by declining gold revenues.