Form 20-F | Form 40-F | X |
Pan American Silver Corp. | ||
(Registrant) | ||
Date: February 20, 2018 | By: | /s/ DELANEY FISHER |
Delaney Fisher | ||
Vice President, Legal Affairs and Corporate Secretary |
Suite 1500 - 625 Howe St. Vancouver, BC Canada, V6C 2T6 604-684-1175 www.panamericansilver.com |
• | Silver production in Q4 2017 was 6.58 million ounces, which is 4% higher than production in the fourth quarter of 2016 ("Q4 2016"), primarily reflecting increases at Dolores, La Colorada and Morococha. Annual silver production of 25.0 million ounces was similar to the 25.4 million produced in 2016, as increases at La Colorada and Dolores offset the expected decline from the conclusion of Alamo Dorado operations. |
• | Gold production was 43.7 thousand ounces in Q4 2017 compared with 43.9 thousand ounces in Q4 2016. Annual 2017 gold production was 160.0 thousand ounces compared with 183.9 thousand ounces in 2016. The decrease was due to lower ore grades at Manantial Espejo and the conclusion of Alamo Dorado operations. |
• | Zinc production of 14.7 thousand tonnes in Q4 2017 was up 11% compared with Q4 2016. Annual 2017 zinc production of 55.3 thousand tonnes was 7% more than in 2016. The increases primarily reflect the expansion of the La Colorada operations. |
• | Lead production of 5.4 thousand tonnes in Q4 2017 was 2% lower than in Q4 2016. Annual 2017 production of 21.5 thousand tonnes was up 6% from 2016, driven by La Colorada. |
• | Copper production of 3.0 thousand tonnes in Q4 2017 and annual 2017 production of 13.4 thousand tonnes were 3% and 7% lower, respectively, than the corresponding 2016 periods, largely due to mine sequencing at Morococha. |
• | Revenue of $226.0 million in Q4 2017 was up 19% from Q4 2016. The increase was largely attributable to higher sales volumes for all metals, except copper, and higher prices for all metals, except silver. Positive settlement adjustments on concentrate shipments also contributed to the increase. Annual 2017 revenue was $816.8 million, up 5% from 2016, due to higher base metal prices and lower treatment and refining charges. |
• | Consolidated All-In Sustaining Costs per Silver Ounce Sold (“AISCSOS”) were $10.86 in Q4 2017 compared with $10.38 in Q4 2016. Annual 2017 AISCSOS of $10.79 was $0.71 under the low end of management's original forecast of $11.50 to $12.90 and within the revised forecast of $10.50 to $11.50. |
• | Consolidated cash costs per payable ounce of silver, net of by-product credits ("Cash Costs") were $3.18 in Q4 2017 compared with $6.66 in Q4 2016, reflecting higher productivity, increased by-product credits and improved concentrate treatment terms. Annual 2017 Cash Costs of $4.55 were 28% lower than 2016, largely due to increased throughput at La Colorada, higher by-product credits, and lower treatment and refining charges. |
PAN AMERICAN SILVER CORP. 1 |
• | Net cash generated from operating activities was up 74% to $79.3 million in Q4 2017 compared with $45.7 million in Q4 2016, reflecting higher revenues, positive working capital changes and lower cash taxes. Annual 2017 operating cash flows of $224.6 million were 5% higher than the $214.8 million generated in 2016, driven primarily by increased revenues and positive working capital changes, partially offset by higher cash taxes. |
• | Net earnings were $49.7 million ($0.32 basic earnings per share) in Q4 2017 compared with $22.3 million ($0.14 basic earnings per share) in Q4 2016. Q4 2017 net earnings include a $60.2 million reversal of the 2015 Morococha mine impairment. Annual 2017 net earnings were $123.5 million ($0.79 basic earnings per share) compared with $101.8 million ($0.66 basic earnings per share) in 2016. |
• | Adjusted earnings were $19.2 million ($0.13 basic adjusted earnings per share) compared with $19.0 million ($0.12 basic adjusted earnings per share) in Q4 2016. Higher revenues in Q4 2017 were offset by increases in production costs, including increased negative non-cash net realizable value inventory adjustments, as well as higher depreciation and income tax expense. Annual 2017 adjusted earnings were $77.7 million ($0.51 basic adjusted earnings per share) compared with $86.6 million ($0.57 basic adjusted earnings per share) in 2016. |
• | Liquidity and working capital position. During 2017, debt reduced by $32.7 million (including capital leases), resulting in year end debt of $10.6 million, mostly related to finance lease liabilities. At December 31, 2017, the Company had cash and short-term investment balances of $227.5 million, working capital of $410.8 million and $300.0 million available under its revolving credit facility. |
• | Capital expenditures totaled $42.3 million in Q4 2017 compared with $56.5 million in Q4 2016. Annual 2017 capital expenditures were $145.8 million, including approximately $61.4 million of project capital, compared with $198.5 million in 2016. The decrease was largely due to the completion of the La Colorada expansion, partially offset by a $4.9 million year-over-year increase in sustaining capital. |
• | Dolores expansion. In 2017, we completed construction of the pulp agglomeration plant with commissioning activities fully underway at year-end. We also advanced the underground mine development and reached the planned daily stacking rate of 20,000 tonnes. |
• | The La Colorada expansion achieved full design processing rates of 1,800 tonnes per day by mid 2017. |
• | COSE and Joaquin projects. We obtained authorizations to initiate construction on the two mining projects located within ore trucking distance from our Manantial Espejo mine. At COSE, we have prepared the necessary project infrastructure and advanced 148 metres on the underground decline. |
• | Pan American acquired a 12.1% interest in New Pacific Metals Corp. (approximately 16.44% fully diluted) for approximately $22.7 million in November 2017. The acquisition provides Pan American with exposure to the Silver Sand Project, a highly prospective exploration project located in the Potosí Department of Bolivia. |
• | A 40% increase in the quarterly cash dividend to $0.035 per common share, approximately $5.4 million in aggregate cash dividends, has been approved by the Board of Directors. The dividend will be payable on or about March 16, 2018, to holders of record of Pan American’s common shares as of the close on March 5, 2018. Pan American's dividends are designated as eligible dividends for the purposes of the Income Tax Act (Canada). As is standard practice, the amounts and specific distribution dates of any future dividends will be evaluated and determined by the Board of Directors on an ongoing basis. |
PAN AMERICAN SILVER CORP. 2 |
Unaudited in thousands of U.S. Dollars, except per ounce and per share amounts | Three months ended December 31, | Year ended December 31, | ||||||
2017 | 2016 | 2017 | 2016 | |||||
Revenue | 226,031 | 190,596 | 816,828 | 774,775 | ||||
Mine operating earnings | 43,285 | 48,956 | 168,760 | 198,879 | ||||
Net earnings for the period | 49,664 | 22,284 | 123,451 | 101,825 | ||||
Adjusted earnings for the period(1) | 19,219 | 18,965 | 77,705 | 86,600 | ||||
Net cash generated from operating activities | 79,291 | 45,668 | 224,559 | 214,804 | ||||
All-in sustaining cost per silver ounce sold(1) | 10.86 | 10.38 | 10.79 | 10.17 | ||||
Net earnings per share attributable to common shareholders (basic) | 0.32 | 0.14 | 0.79 | 0.66 | ||||
Adjusted earnings per share attributable to common shareholders (basic)(1) | 0.13 | 0.12 | 0.51 | 0.57 |
PAN AMERICAN SILVER CORP. 3 |
Three months ended December 31, 2017 | Three months ended December 31, 2016 | |||||||||||
Production | Cash Costs(1) $ | Production | Cash Costs(1) $ | |||||||||
Ag (Moz) | Au (koz) | Ag (Moz) | Au (koz) | |||||||||
La Colorada | 1.87 | 1.26 | 0.43 | 1.67 | 0.86 | 4.38 | ||||||
Dolores | 1.26 | 31.22 | (3.93 | ) | 0.90 | 28.83 | (5.93 | ) | ||||
Alamo Dorado | 0.03 | 0.11 | 2.09 | 0.40 | 1.41 | 22.80 | ||||||
Huaron | 0.95 | 0.19 | 2.08 | 0.94 | 0.20 | 4.54 | ||||||
Morococha (2) | 0.72 | 0.82 | (7.42 | ) | 0.58 | 0.43 | 5.52 | |||||
San Vicente (3) | 1.10 | 0.14 | 9.04 | 1.05 | n/a | 11.22 | ||||||
Manantial Espejo | 0.65 | 9.98 | 26.52 | 0.78 | 12.21 | 14.61 | ||||||
TOTAL | 6.58 | 43.71 | 3.18 | 6.31 | 43.94 | 6.66 |
Year ended December 31, 2017 | Year ended December 31, 2016 | |||||||||||
Production | Cash Costs(1) $ | Production | Cash Costs(1) $ | |||||||||
Ag (Moz) | Au (koz) | Ag (Moz) | Au (koz) | |||||||||
La Colorada | 7.06 | 4.29 | 2.08 | 5.80 | 2.93 | 6.15 | ||||||
Dolores | 4.23 | 103.02 | (1.65 | ) | 3.84 | 102.76 | (1.08 | ) | ||||
Alamo Dorado | 0.64 | 2.12 | 16.49 | 1.86 | 8.38 | 16.02 | ||||||
Huaron | 3.68 | 1.15 | 1.35 | 3.81 | 0.81 | 5.79 | ||||||
Morococha (2) | 2.63 | 3.53 | (5.34 | ) | 2.54 | 2.14 | 4.21 | |||||
San Vicente (3) | 3.61 | 0.51 | 11.85 | 4.43 | n/a | 11.95 | ||||||
Manantial Espejo | 3.12 | 45.34 | 18.25 | 3.14 | 66.89 | 4.28 | ||||||
TOTAL | 24.98 | 159.96 | 4.55 | 25.42 | 183.92 | 6.29 |
(1) | Cash costs are a non-GAAP measure. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures. |
(2) | Morococha data represents Pan American's 92.3% interest in the mine's production. |
(3) | San Vicente data represents Pan American's 95.0% interest in the mine's production. |
By-Product Production | Three months ended December 31, | Year ended December 31, | ||||||
2017 | 2016 | 2017 | 2016 | |||||
Gold - ounces '000s ("koz") | 43.7 | 43.9 | 160.0 | 183.9 | ||||
Zinc - tonnes '000s ("kt") | 14.7 | 13.2 | 55.3 | 51.9 | ||||
Lead - kt | 5.4 | 5.5 | 21.5 | 20.2 | ||||
Copper - kt | 3.0 | 3.1 | 13.4 | 14.4 |
PAN AMERICAN SILVER CORP. 4 |
Average Realized Metal Prices | Three months ended December 31, | Year ended December 31, | ||||||
2017 | 2016 | 2017 | 2016 | |||||
Silver $/ounce | 16.65 | 17.65 | 16.99 | 17.35 | ||||
Gold $/ounce | 1,276 | 1,212 | 1,257 | 1,251 | ||||
Zinc $/tonne | 3,282 | 2,587 | 2,929 | 2,133 | ||||
Lead $/tonne | 2,472 | 2,178 | 2,351 | 1,892 | ||||
Copper $/tonne | 6,811 | 5,282 | 6,174 | 4,816 |
Capital Expenditures | Annual Forecast(1) | Year ended December 31, | ||||
(in millions of USD) | 2017 | 2017 | 2016 | |||
La Colorada | 10.5 – 11.5 | 13.3 | 9.9 | |||
Dolores | 39.0 – 40.0 | 38.4 | 40.4 | |||
Alamo Dorado | — | — | — | |||
Huaron | 8.0 – 9.0 | 8.8 | 11.1 | |||
Morococha | 9.0 – 10.0 | 12.5 | 10.3 | |||
San Vicente | 12.0 – 13.0 | 8.1 | 4.9 | |||
Manantial Espejo | 3.5 – 4.5 | 3.3 | 2.9 | |||
Sustaining Capital Total(2) | 82.0 - 88.0 | 84.4 | 79.5 | |||
La Colorada project capital | 6.5 – 7.5 | 6.9 | 52.9 | |||
Dolores project capital | 51.5 – 54.5 | 49.9 | 66.1 | |||
Joaquin and COSE projects(3) | 11.0 – 12.5 | 4.7 | — | |||
Project Capital Total(2) | 69.0 - 74.5 | 61.4 | 119.0 | |||
Consolidated Total | 151.0 – 162.5 | 145.8 | 198.5 |
(1) | Forecast amount per 2016 annual MD&A dated March 22, 2017, except for Joaquin and COSE projects, which were initially forecast in the MD&A for the second quarter of 2017. |
(2) | The sustaining capital total amounts capitalized in 2017 were $0.2 million more than the $84.2 million of 2017 sustaining capital cash outflows and project capital amounts capitalized in 2017 were $1.6 million less than the $63.0 million of 2017 project capital cash outflows; the capital cash outflows are included in the 2017 AISCSOS calculation, shown in the “Alternative Performance (non-GAAP) Measures” section of this news release, and are different from the capital amounts in the tables included in the "Individual Mine Operation Highlights" section of this news release. These differences are due to the timing difference between the cash payment of capital investments compared with the period in which investments are capitalized. |
(3) | Total expenditures of $9.7 million were incurred in 2017 for the Joaquin and COSE projects, of which $5.0 million was expensed as part of 2017 exploration and project development expenses, and the remaining $4.7 million was capitalized. |
PAN AMERICAN SILVER CORP. 5 |
2018 Guidance | 2019 Outlook | 2020 Outlook | |
Production | |||
Silver (million ounces) | 25.0 - 26.5 | 27.7 - 29.7 | 30.5 - 33.0 |
Gold (thousand ounces) | 175 - 185 | 183 - 193 | 165 - 179 |
Zinc (thousand tonnes) | 60.0 - 62.0 | 55.5 - 59.5 | 60.5 - 64.5 |
Lead (thousand tonnes) | 21.0 - 22.0 | 21.0 - 23.0 | 23.0 - 26.0 |
Copper (thousand tonnes) | 12.0 - 12.5 | 10.5 - 12.5 | 11.5 - 13.5 |
Cash Costs(1)($/ounce) | 3.60 - 4.60 | 4.50 - 6.00 | 4.75 - 6.75 |
Sustaining capital ($ millions) | 100 - 105 | 100 - 110 | 75 - 90 |
AISCSOS(1) ($/ounce) | 9.30 - 10.80 | 9.50 - 11.50 | 8.50 - 11.00 |
Years 2018 to 2020 | ||
Metal prices | ||
Silver ($/ounce) | 16.50 | |
Gold ($/ounce) | 1,250 | |
Zinc ($/tonne) | 3,100 | |
Lead ($/tonne) | 2,350 | |
Copper ($/tonne) | 6,500 | |
Average annual exchange rates relative to 1 USD | ||
Mexican peso | 18.50 | |
Peruvian sol | 3.23 | |
Argentine peso | 19.59 | |
Bolivian boliviano | 7.00 |
PAN AMERICAN SILVER CORP. 6 |
Date: | February 21, 2018 |
Time: | 11:00 am ET (8:00 am PT) |
Dial-in numbers: | 1-800-319-4610 (toll-free in Canada and the U.S.) |
+1-604-638-5340 (international participants) |
• | Cash costs per payable ounce of silver, net of by-product credits ("cash costs"). The Company's method of calculating cash costs may differ from the methods used by other entities and, accordingly, the Company's cash costs may not be comparable to similarly titled measures used by other entities. Investors are cautioned that cash costs should not be construed as an alternative to production costs, depreciation and amortization, and royalties determined in accordance with IFRS as an indicator of performance. |
• | Adjusted earnings and adjusted earnings per share. The Company believes that these measures better reflect normalized earnings as they eliminate items that in management's judgment are subject to volatility as a result of factors which are unrelated to operations in the period, and/or relate to items that will settle in future periods. |
• | All-in sustaining costs per silver ounce sold ("AISCSOS"). The Company has adopted AISCSOS as a measure of its consolidated operating performance and its ability to generate cash from all operations collectively, and the Company believes it is a more comprehensive measure of the cost of operating our consolidated business than traditional cash costs per payable ounce, as it includes the cost of replacing ounces through exploration, the cost of ongoing capital investments (sustaining capital), general and administrative expenses, as well as other items that affect the Company's consolidated earnings and cash flow. |
• | Total debt is calculated as the total current and non-current portions of: long-term debt; finance lease liabilities; and loans payable. Total debt does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. The Company and certain investors use this information to evaluate the financial debt leverage of the Company. |
• | Operating free cash flow is calculated as net cash generated from operating activities less cash invested in sustaining capital. The Company believes the inclusion of sustaining capital investments better reflects total |
PAN AMERICAN SILVER CORP. 7 |
PAN AMERICAN SILVER CORP. 8 |
PAN AMERICAN SILVER CORP. 9 |
Consolidated Statements of Financial Position (Unaudited in thousands of U.S. dollars) |
December 31, 2017 | December 31, 2016 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 175,953 | $ | 180,881 | ||||
Short-term investments | 51,590 | 36,729 | ||||||
Trade and other receivables | 109,746 | 130,117 | ||||||
Income taxes receivable | 16,991 | 17,460 | ||||||
Inventories | 218,715 | 237,329 | ||||||
Derivative financial instruments | 1,092 | — | ||||||
Assets held for sale | 7,949 | — | ||||||
Prepaid expenses and other current assets | 13,434 | 10,337 | ||||||
595,470 | 612,853 | |||||||
Non-current assets | ||||||||
Mineral properties, plant and equipment | 1,336,683 | 1,222,727 | ||||||
Long-term refundable tax | 80 | 7,664 | ||||||
Deferred tax assets | 2,679 | 1,727 | ||||||
Investment in associates | 55,017 | 49,734 | ||||||
Other assets | 346 | 379 | ||||||
Goodwill | 3,057 | 3,057 | ||||||
Total Assets | $ | 1,993,332 | $ | 1,898,141 | ||||
Liabilities | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 139,698 | $ | 143,502 | ||||
Loans payable | 3,000 | — | ||||||
Derivative financial instruments | 1,906 | 2,815 | ||||||
Current portion of provisions | 8,245 | 8,499 | ||||||
Current portion of finance lease | 5,734 | 3,559 | ||||||
Income tax payable | 26,131 | 25,911 | ||||||
184,714 | 184,286 | |||||||
Non-current liabilities | ||||||||
Long-term portion of provisions | 61,248 | 51,444 | ||||||
Deferred tax liabilities | 171,228 | 170,863 | ||||||
Long-term portion of finance lease | 1,825 | 3,542 | ||||||
Long-term debt | — | 36,200 | ||||||
Deferred revenue | 12,017 | 11,561 | ||||||
Other long-term liabilities | 26,954 | 27,408 | ||||||
Share purchase warrants | 14,295 | 13,833 | ||||||
Total Liabilities | 472,281 | 499,137 | ||||||
Equity | ||||||||
Capital and reserves | ||||||||
Issued capital | 2,318,252 | 2,303,978 | ||||||
Share option reserve | 22,463 | 22,946 | ||||||
Investment revaluation reserve | 1,605 | 434 | ||||||
Deficit | (825,470 | ) | (931,060 | ) | ||||
Total Equity attributable to equity holders of the Company | 1,516,850 | 1,396,298 | ||||||
Non-controlling interests | 4,201 | 2,706 | ||||||
Total Equity | 1,521,051 | 1,399,004 | ||||||
Total Liabilities and Equity | $ | 1,993,332 | $ | 1,898,141 |
PAN AMERICAN SILVER CORP. 10 |
Consolidated Income Statements (Unaudited in thousands of U.S. dollars except per share amounts) |
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenue | $ | 226,031 | $ | 190,596 | $ | 816,828 | $ | 774,775 | ||||||||
Cost of sales | ||||||||||||||||
Production costs | (139,697 | ) | (110,466 | ) | (500,670 | ) | (428,333 | ) | ||||||||
Depreciation and amortization | (34,240 | ) | (23,032 | ) | (122,888 | ) | (115,955 | ) | ||||||||
Royalties | (8,809 | ) | (8,142 | ) | (24,510 | ) | (31,608 | ) | ||||||||
(182,746 | ) | (141,640 | ) | (648,068 | ) | (575,896 | ) | |||||||||
Mine operating earnings | 43,285 | 48,956 | 168,760 | 198,879 | ||||||||||||
General and administrative | (4,732 | ) | (5,592 | ) | (21,397 | ) | (23,663 | ) | ||||||||
Exploration and project development | (4,269 | ) | (3,068 | ) | (19,755 | ) | (11,334 | ) | ||||||||
Foreign exchange gains (losses) | 1,052 | (4,441 | ) | 1,823 | (9,054 | ) | ||||||||||
Impairment reversals | 61,554 | — | 61,554 | — | ||||||||||||
(Losses) gains on commodity, diesel fuel swaps, and foreign currency contracts | (1,841 | ) | (1,710 | ) | 606 | (4,944 | ) | |||||||||
(Loss) gain on sale of mineral properties, plant and equipment | (794 | ) | 6,795 | 191 | 25,100 | |||||||||||
Share of loss from associate and dilution gain | 259 | 1,308 | 2,052 | 7,946 | ||||||||||||
Other (expense) income | (4,011 | ) | 3,254 | (5,505 | ) | 1,542 | ||||||||||
Earnings from operations | 90,503 | 45,502 | 188,329 | 184,472 | ||||||||||||
Gain on derivatives | 64 | — | 64 | — | ||||||||||||
Investment income | 658 | 371 | 1,277 | 1,350 | ||||||||||||
Interest and finance expense | (2,353 | ) | (2,730 | ) | (7,185 | ) | (9,551 | ) | ||||||||
Earnings before income taxes | 88,872 | 43,143 | 182,485 | 176,271 | ||||||||||||
Income tax expense | (39,208 | ) | (20,859 | ) | (59,034 | ) | (74,446 | ) | ||||||||
Net earnings for the period | $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | ||||||||
Attributable to: | ||||||||||||||||
Equity holders of the Company | $ | 48,892 | $ | 21,777 | $ | 120,991 | $ | 100,085 | ||||||||
Non-controlling interests | 772 | 507 | 2,460 | 1,740 | ||||||||||||
$ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | |||||||||
Earnings per share attributable to common shareholders | ||||||||||||||||
Basic earnings per share | $ | 0.32 | $ | 0.14 | $ | 0.79 | $ | 0.66 | ||||||||
Diluted earnings per share | $ | 0.32 | $ | 0.14 | $ | 0.79 | $ | 0.66 | ||||||||
Weighted average shares outstanding (in 000’s) Basic | 153,207 | 152,263 | 153,070 | 152,118 | ||||||||||||
Weighted average shares outstanding (in 000’s) Diluted | 153,434 | 152,669 | 153,353 | 152,504 | ||||||||||||
PAN AMERICAN SILVER CORP. 11 |
Consolidated Statements of Comprehensive Income (Unaudited in thousands of U.S. dollars) |
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net earnings for the period | $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | ||||||||
Items that may be reclassified subsequently to net earnings: | ||||||||||||||||
Unrealized net gains (losses) on available for sale securities (net of $nil tax in 2017 and 2016) | 1,376 | (2,151 | ) | 810 | 912 | |||||||||||
Reclassification adjustment for realized losses (gains) on equity securities to earnings (net of $nil tax in 2017 and 2016) | 250 | (27 | ) | 361 | (20 | ) | ||||||||||
Total comprehensive earnings for the period | $ | 51,290 | $ | 20,106 | $ | 124,622 | $ | 102,717 | ||||||||
Total comprehensive earnings attributable to: | ||||||||||||||||
Equity holders of the Company | $ | 50,518 | $ | 19,599 | $ | 122,162 | $ | 100,977 | ||||||||
Non-controlling interests | 772 | 507 | 2,460 | 1,740 | ||||||||||||
$ | 51,290 | $ | 20,106 | $ | 124,622 | $ | 102,717 |
PAN AMERICAN SILVER CORP. 12 |
Consolidated Statements of Cash Flows (Unaudited in thousands of U.S. dollars) |
Three months ended December 31, | Year ended December 31, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Cash flow from operating activities | |||||||||||||||||
Net earnings for the period | $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | |||||||||
Current income tax expense | 26,706 | 9,841 | 62,877 | 44,031 | |||||||||||||
Deferred income tax expense (recovery) | 12,502 | 11,018 | (3,843 | ) | 30,415 | ||||||||||||
Interest expense (recovery) | 284 | 891 | (1,179 | ) | 2,115 | ||||||||||||
Depreciation and amortization | 34,240 | 23,032 | 122,888 | 115,955 | |||||||||||||
Impairment reversals | (61,554 | ) | — | (61,554 | ) | — | |||||||||||
Accretion on closure and decommissioning provision | 1,493 | 1,090 | 5,973 | 4,363 | |||||||||||||
Unrealized losses (gains) on foreign exchange | 362 | 4,139 | (383 | ) | 5,759 | ||||||||||||
Losses (gains) on commodity, diesel fuel swaps, and foreign currency contracts | 1,841 | 1,710 | (606 | ) | 4,944 | ||||||||||||
Loss (gain) on sale of mineral properties, plant and equipment | 794 | (157 | ) | (191 | ) | (25,100 | ) | ||||||||||
Project development write-down | — | — | — | 1,898 | — | ||||||||||||
Other operating activities | 5,856 | (18,613 | ) | 13,269 | (46,935 | ) | |||||||||||
Changes in non-cash operating working capital | 15,193 | 2,283 | 11,709 | (5,545 | ) | ||||||||||||
Operating cash flows before interest and income taxes | $ | 87,381 | $ | 57,518 | $ | 274,309 | $ | 231,827 | |||||||||
Interest paid | (413 | ) | (1,800 | ) | (2,367 | ) | (2,553 | ) | |||||||||
Interest received | 414 | 406 | 1,462 | 1,382 | |||||||||||||
Income taxes paid | (8,091 | ) | (10,456 | ) | (48,845 | ) | (15,852 | ) | |||||||||
Net cash generated from operating activities | $ | 79,291 | $ | 45,668 | $ | 224,559 | $ | 214,804 | |||||||||
Cash flow from investing activities | |||||||||||||||||
Payments for mineral properties, plant and equipment | $ | (36,473 | ) | $ | (56,477 | ) | $ | (142,232 | ) | $ | (202,661 | ) | |||||
Acquisition of mineral interests | — | — | (20,219 | ) | — | ||||||||||||
Net (purchase of) proceeds from sales of short-term investments | (703 | ) | (3,199 | ) | (14,267 | ) | 56,870 | ||||||||||
Proceeds from sale of mineral properties, plant and equipment | 36 | 738 | 1,674 | 16,319 | |||||||||||||
Purchase of shares in associate | — | — | (2,473 | ) | — | ||||||||||||
Net proceeds (payments) from commodity, diesel fuel swaps, and foreign currency contracts | 348 | (2,145 | ) | (304 | ) | (4,965 | ) | ||||||||||
Exercise of warrants and other payments | — | (5,460 | ) | — | (5,460 | ) | |||||||||||
Net cash used in investing activities | $ | (36,792 | ) | $ | (66,543 | ) | $ | (177,821 | ) | $ | (139,897 | ) | |||||
Cash flow from financing activities | |||||||||||||||||
Proceeds from issue of equity shares | $ | 28 | $ | 96 | $ | 2,606 | $ | 2,399 | |||||||||
Distributions to non-controlling interests | (314 | ) | (107 | ) | (1,052 | ) | (428 | ) | |||||||||
Dividends paid | (3,830 | ) | (1,903 | ) | (15,314 | ) | (7,606 | ) | |||||||||
Repayment of credit facility | — | — | (36,200 | ) | — | ||||||||||||
Proceeds from (payment of) short-term loans | 3,000 | (5,172 | ) | 3,000 | (19,536 | ) | |||||||||||
Payment of equipment leases | (1,344 | ) | (725 | ) | (4,542 | ) | (3,047 | ) | |||||||||
Net cash used in financing activities | $ | (2,460 | ) | $ | (7,811 | ) | $ | (51,502 | ) | $ | (28,218 | ) | |||||
Effects of exchange rate changes on cash and cash equivalents | (80 | ) | 2 | (164 | ) | 229 | |||||||||||
Net increase in cash and cash equivalents | 39,959 | (28,684 | ) | (4,928 | ) | 46,918 | |||||||||||
Cash and cash equivalents at the beginning of the period | 135,994 | 209,565 | 180,881 | 133,963 | |||||||||||||
Cash and cash equivalents at the end of the period | $ | 175,953 | $ | 180,881 | $ | 175,953 | $ | 180,881 |
PAN AMERICAN SILVER CORP. 13 |
Three months ended December 31, | Year ended December 31, | |||||||||||||||||
(In thousands of USD, except as noted) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Direct operating costs | $ | 134,202 | $ | 120,496 | $ | 488,363 | $ | 472,806 | ||||||||||
Inventory net realizable value (“NRV”) adjustments | A | 5,495 | (10,715 | ) | 12,307 | (42,815 | ) | |||||||||||
Production costs(1) | $ | 139,697 | $ | 109,781 | $ | 500,670 | $ | 429,991 | ||||||||||
Royalties | 8,809 | 8,142 | 24,510 | 31,608 | ||||||||||||||
Direct selling costs (2) | 19,408 | 20,656 | 69,344 | 80,319 | ||||||||||||||
Less by-product credits (2) | (131,679 | ) | (109,571 | ) | (462,663 | ) | (424,442 | ) | ||||||||||
Cash cost of sales net of by-products (3) | $ | 36,235 | $ | 29,009 | $ | 131,862 | $ | 117,476 | ||||||||||
Sustaining capital (4) | $ | 25,573 | $ | 24,976 | $ | 84,215 | $ | 89,394 | ||||||||||
Exploration and project development(5) | 4,269 | 3,068 | 17,858 | 11,334 | ||||||||||||||
Reclamation cost accretion | 1,493 | 1,090 | 5,973 | 4,363 | ||||||||||||||
General and administrative expense | 4,732 | 5,592 | 21,397 | 23,663 | ||||||||||||||
All-in sustaining costs (3) | B | $ | 72,303 | $ | 63,735 | $ | 261,304 | $ | 246,230 | |||||||||
Payable ounces sold (in thousands) | C | 6,659.4 | 6,138.2 | 24,211.7 | 24,199.5 | |||||||||||||
All-in sustaining cost per silver ounce sold, net of by-products | B/C | $ | 10.86 | $ | 10.38 | $ | 10.79 | $ | 10.17 | |||||||||
All-in sustaining cost per silver ounce sold, net of by-products (excludes NRV inventory adjustments) | (B-A)/C | $ | 10.03 | $ | 12.13 | $ | 10.28 | $ | 11.94 |
(1) | For the purposes of AISCSOS, Alamo Dorado production costs for the three and twelve month periods ended December 31, 2016 have been decreased by $0.6 million and increased by $1.7 million, respectively, to exclude non-cash adjustments to the closure and decommissioning liabilities that are included in production costs as presented in the unaudited consolidated statements of income (loss). |
(2) | Included in the revenue line of the interim consolidated income statements, and for by-product credits are reflective of realized metal prices for the applicable periods. |
(3) | Totals may not add due to rounding. |
(4) | Please refer to the table below. Further, 2017 annual sustaining capital cash outflows included in this table were $0.2 million less than the $84.4 million capitalized in 2017, as shown in the Capital Expenditures table included in this news release. The difference is due to the timing difference between the cash payment of capital investments compared with the period in which investments are capitalized. |
(5) | The amounts for year-to-date 2017 exclude $1.9 million from non-cash project development write-downs. |
Reconciliation of payments for mineral properties, plant and equipment and sustaining capital | Three months ended December 31, | Year ended December 31, | ||||||||||||
(in thousands of USD) | 2017 | 2016 | 2017 | 2016 | ||||||||||
Payments for mineral properties, plant and equipment(1) | $ | 36,473 | $ | 56,477 | 142,232 | 202,661 | ||||||||
Add/(Subtract) | ||||||||||||||
Advances received for leases | 1,385 | 2,213 | 5,000 | 6,151 | ||||||||||
Non-Sustaining capital (Dolores, La Colorada projects, and other) | (12,284 | ) | (33,714 | ) | (63,017 | ) | (119,418 | ) | ||||||
Sustaining Capital(2) | $ | 25,573 | $ | 24,976 | 84,215 | 89,394 |
(1) | As presented on the unaudited interim consolidated statements of cash flows. |
(2) | Totals may not add due to rounding |
PAN AMERICAN SILVER CORP. 14 |
Three months ended December 31, 2017 | ||||||||||||||||||||||||||
(In thousands of USD, except as noted) | La Colorada | Dolores | Alamo Dorado | Huaron | Morococha | San Vicente | Manantial Espejo | PASCORP | Consolidated | |||||||||||||||||
Direct operating costs | 16,580 | 35,739 | 3,957 | 19,551 | 16,931 | 10,484 | 30,960 | 134,202 | ||||||||||||||||||
NRV inventory adjustments | — | 4,098 | (1,916 | ) | — | — | — | 3,313 | 5,495 | |||||||||||||||||
Production costs | 16,580 | 39,838 | 2,041 | 19,551 | 16,931 | 10,484 | 34,273 | 139,697 | ||||||||||||||||||
Royalties | 106 | 1,966 | — | — | — | 6,105 | 633 | 8,809 | ||||||||||||||||||
Direct selling costs | 4,066 | 31 | 248 | 6,659 | 5,014 | 3,383 | 8 | 19,408 | ||||||||||||||||||
Less by-product credits | (18,316 | ) | (39,317 | ) | (61 | ) | (24,653 | ) | (26,767 | ) | (6,969 | ) | (15,595 | ) | (131,679 | ) | ||||||||||
Cash cost of sales net of by-products(1) | 2,435 | 2,518 | 2,227 | 1,557 | (4,823 | ) | 13,002 | 19,319 | 36,235 | |||||||||||||||||
Sustaining capital | 2,576 | 13,303 | — | 3,548 | 3,162 | 1,939 | 1,045 | 25,573 | ||||||||||||||||||
Exploration and project development | 73 | 564 | — | 428 | 543 | — | 936 | 1,726 | 4,269 | |||||||||||||||||
Reclamation cost accretion | 112 | 296 | 89 | 162 | 105 | 56 | 619 | 54 | 1,493 | |||||||||||||||||
General & administrative expense | — | — | — | — | — | — | — | 4,731 | 4,732 | |||||||||||||||||
All-in sustaining costs(1) | 5,196 | 16,682 | 2,317 | 5,695 | (1,013 | ) | 14,998 | 21,918 | 6,511 | 72,303 | ||||||||||||||||
Payable ounces sold (thousand) | 1,847 | 1,225 | 133 | 813 | 658 | 1,218 | 766 | 6,659 | ||||||||||||||||||
All-in sustaining cost per silver ounce sold, net of by-products | $ | 2.81 | $ | 13.62 | $ | 17.45 | $ | 7.00 | $ | (1.54 | ) | $ | 12.31 | $ | 28.63 | $ | 10.86 | |||||||||
All-in sustaining cost per silver ounce sold, net of by-products (excludes NRV inventory adjustments) | 2.81 | 10.27 | 31.89 | 7.00 | (1.54 | ) | 12.31 | 24.30 | 10.03 |
(1) | Totals may not add due to rounding. |
Year ended December 31, 2017 | ||||||||||||||||||||||||||
(In thousands of USD, except as noted) | La Colorada | Dolores | Alamo Dorado | Huaron | Morococha | San Vicente | Manantial Espejo | PASCORP | Consolidated | |||||||||||||||||
Direct operating costs | 67,170 | 116,104 | 20,477 | 75,551 | 63,967 | 34,731 | 110,362 | 488,363 | ||||||||||||||||||
NRV inventory adjustments | 6,847 | (2,598 | ) | 8,058 | 12,307 | |||||||||||||||||||||
Production costs | 67,170 | 122,951 | 17,879 | 75,551 | 63,967 | 34,731 | 118,420 | 500,670 | ||||||||||||||||||
Royalties | 475 | 6,501 | 79 | — | — | 14,321 | 3,134 | 24,510 | ||||||||||||||||||
Direct selling costs | 12,235 | 93 | 479 | 26,238 | 18,770 | 10,740 | 789 | 69,344 | ||||||||||||||||||
Less by-product credits | (64,133 | ) | (128,351 | ) | (3,467 | ) | (97,715 | ) | (94,233 | ) | (16,278 | ) | (58,485 | ) | (462,663 | ) | ||||||||||
Cash cost of sales net of by-products(1) | 15,748 | 1,194 | 14,970 | 4,074 | (11,496 | ) | 43,513 | 63,858 | 131,862 | |||||||||||||||||
Sustaining capital | 13,970 | 36,071 | — | 10,267 | 12,428 | 8,146 | 3,333 | 84,215 | ||||||||||||||||||
Exploration and project development | 251 | 2,444 | — | 1,713 | 1,629 | — | 4,588 | 7,232 | 17,858 | |||||||||||||||||
Reclamation cost accretion | 448 | 1,186 | 357 | 646 | 420 | 225 | 2,474 | 216 | 5,973 | |||||||||||||||||
General & administrative expense | — | — | — | — | — | — | — | 21,397 | 21,397 | |||||||||||||||||
All-in sustaining costs(1) | 30,417 | 40,894 | 15,327 | 16,701 | 2,981 | 51,884 | 74,254 | 28,845 | 261,304 | |||||||||||||||||
Payable ounces sold (thousand) | 6,853 | 4,089 | 867 | 3,181 | 2,448 | 3,603 | 3,171 | 24,212 | ||||||||||||||||||
All-in sustaining cost per silver ounce sold, net of by-products | $ | 4.44 | $ | 10.00 | $ | 17.69 | $ | 5.25 | $ | 1.22 | $ | 14.40 | $ | 23.42 | $ | 10.79 | ||||||||||
All-in sustaining cost per silver ounce sold, net of by-products (excludes NRV inventory adjustments) | $ | 4.44 | $ | 8.33 | $ | 20.68 | $ | 5.25 | $ | 1.22 | $ | 14.40 | $ | 20.88 | $ | 10.28 |
(1) | Totals may not add due to rounding. |
PAN AMERICAN SILVER CORP. 15 |
Three months ended December 31, 2016 | ||||||||||||||||||||||||||
(In thousands of USD, except as noted) | La Colorada | Dolores | Alamo Dorado | Huaron | Morococha | San Vicente | Manantial Espejo | PASCORP | Consolidated | |||||||||||||||||
Direct operating costs | 14,674 | 28,664 | 7,266 | 17,991 | 15,547 | 10,016 | 26,336 | 120,496 | ||||||||||||||||||
NRV inventory adjustments | — | (6,350 | ) | 2,224 | — | — | — | (6,589 | ) | (10,715 | ) | |||||||||||||||
Production costs | 14,674 | 22,314 | 9,490 | 17,991 | 15,547 | 10,016 | 19,747 | 109,781 | ||||||||||||||||||
Royalties | 135 | 1,604 | 33 | — | — | 5,598 | 772 | 8,142 | ||||||||||||||||||
Direct selling costs | 3,712 | 23 | 125 | 7,735 | 5,643 | 4,634 | (1,215 | ) | 20,656 | |||||||||||||||||
Less by-product credits | (12,238 | ) | (32,868 | ) | (1,609 | ) | (21,206 | ) | (18,379 | ) | (5,372 | ) | (17,898 | ) | (109,571 | ) | ||||||||||
Cash cost of sales net of by-products(1) | 6,283 | (8,927 | ) | 8,039 | 4,520 | 2,812 | 14,876 | 1,406 | 29,009 | |||||||||||||||||
Sustaining capital | 2,229 | 10,772 | — | 4,355 | 4,892 | 1,631 | 1,097 | 24,976 | ||||||||||||||||||
Exploration and project development | 31 | 628 | — | 576 | 109 | — | — | 1,723 | 3,068 | |||||||||||||||||
Reclamation cost accretion | 72 | 179 | 104 | 126 | 86 | 54 | 433 | 37 | 1,090 | |||||||||||||||||
General & administrative expense | — | — | — | — | — | — | — | 5,592 | 5,592 | |||||||||||||||||
All-in sustaining costs(1) | 8,615 | 2,652 | 8,144 | 9,576 | 7,899 | 16,561 | 2,935 | 7,352 | 63,735 | |||||||||||||||||
Payable ounces sold (thousand) | 1,561 | 895 | 286 | 759 | 526 | 1,332 | 779 | 6,138 | ||||||||||||||||||
All-in sustaining cost per silver ounce sold, net of by-products | $ | 5.52 | $ | 2.96 | $ | 28.44 | $ | 12.62 | $ | 15.02 | $ | 12.43 | $ | 3.77 | $ | 10.38 | ||||||||||
All-in sustaining cost per silver ounce sold, net of by-products (excludes NRV inventroy adjustments) | $ | 5.52 | $ | 10.06 | $ | 20.68 | $ | 12.62 | $ | 15.02 | $ | 12.43 | $ | 12.22 | $ | 12.13 |
(1) | Totals may not add due to rounding. |
Year ended December 31, 2016 | ||||||||||||||||||||||||||
(In thousands of USD, except as noted) | La Colorada | Dolores | Alamo Dorado | Huaron | Morococha | San Vicente | Manantial Espejo | PASCORP | Consolidated | |||||||||||||||||
Direct operating costs | 50,879 | 121,162 | 40,172 | 67,911 | 58,868 | 34,959 | 98,856 | 472,806 | ||||||||||||||||||
NRV inventory adjustments | (22,434 | ) | 1,173 | (21,554 | ) | (42,815 | ) | |||||||||||||||||||
Production costs | 50,879 | 98,728 | 41,345 | 67,911 | 58,868 | 34,959 | 77,302 | 429,991 | ||||||||||||||||||
Royalties | 401 | 6,224 | 235 | — | — | 20,929 | 3,818 | 31,608 | ||||||||||||||||||
Direct selling costs | 13,554 | 107 | 376 | 32,443 | 25,702 | 15,697 | (7,562 | ) | 80,319 | |||||||||||||||||
Less by-product credits | (34,737 | ) | (123,811 | ) | (13,156 | ) | (77,754 | ) | (74,754 | ) | (15,774 | ) | (84,456 | ) | (424,442 | ) | ||||||||||
Cash cost of sales net of by-products(1) | 30,098 | (18,751 | ) | 28,800 | 22,600 | 9,817 | 55,811 | (10,898 | ) | 117,476 | ||||||||||||||||
Sustaining capital | 10,545 | 48,079 | — | 11,994 | 10,945 | 4,963 | 2,868 | 89,394 | ||||||||||||||||||
Exploration and project development | 186 | 1,792 | — | 837 | 1,053 | — | — | 7,465 | 11,334 | |||||||||||||||||
Reclamation cost accretion | 287 | 714 | 416 | 505 | 345 | 218 | 1,731 | 148 | 4,363 | |||||||||||||||||
General & administrative expense | — | — | — | — | — | — | — | 23,663 | 23,663 | |||||||||||||||||
All-in sustaining costs(1) | 41,116 | 31,834 | 29,216 | 35,935 | 22,159 | 60,991 | (6,299 | ) | 31,276 | 246,230 | ||||||||||||||||
Payable ounces sold (thousand) | 5,486 | 3,839 | 1,967 | 3,233 | 2,377 | 4,264 | 3,033 | 24,200 | ||||||||||||||||||
All-in sustaining cost per silver ounce sold, net of by-products | $ | 7.49 | $ | 8.29 | $ | 14.85 | $ | 11.11 | $ | 9.32 | $ | 14.30 | $ | (2.08 | ) | $ | 10.17 | |||||||||
All-in sustaining cost per silver ounce sold, net of by-products (excludes NRV inventory adjustments) | $ | 7.49 | $ | 14.14 | $ | 14.26 | $ | 11.11 | $ | 9.32 | $ | 14.30 | $ | 5.03 | $ | 11.94 |
(1) | Totals may not add due to rounding. |
• | Cash Costs per Ounce of Silver, net of by-product credits |
PAN AMERICAN SILVER CORP. 16 |
Total Cash Costs per ounce of Payable Silver, net of by-product credits | Three months ended December 31, | Year ended December 31, | |||||||||||
(in thousands of U.S. dollars except as noted) | 2017 | 2016 | 2017 | 2016 | |||||||||
Production costs | $ | 139,697 | $ | 110,466 | $ | 500,670 | $ | 428,333 | |||||
Add/(Subtract) | |||||||||||||
Royalties | 8,809 | 8,142 | 24,510 | 31,608 | |||||||||
Smelting, refining, and transportation charges | 18,469 | 22,204 | 73,222 | 91,371 | |||||||||
Worker’s participation and voluntary payments | (1,374 | ) | (876 | ) | (5,067 | ) | (3,397 | ) | |||||
Change in inventories | (12,776 | ) | (3,473 | ) | (16,011 | ) | (11,937 | ) | |||||
Other | 555 | 358 | 1,559 | (5,660 | ) | ||||||||
Non-controlling interests (1) | (64 | ) | (811 | ) | (1,126 | ) | (3,358 | ) | |||||
Inventory net realizable value (“NRV”) adjustments | (5,495 | ) | 10,715 | (12,307 | ) | 42,815 | |||||||
Cash Operating Costs before by-product credits(2) | 147,820 | 146,725 | 565,450 | 569,775 | |||||||||
Less gold credit | (54,648 | ) | (52,888 | ) | (196,649 | ) | (227,196 | ) | |||||
Less zinc credit | (40,826 | ) | (28,486 | ) | (137,826 | ) | (93,428 | ) | |||||
Less lead credit | (12,687 | ) | (11,226 | ) | (46,948 | ) | (35,890 | ) | |||||
Less copper credit | (20,026 | ) | (14,667 | ) | (77,348 | ) | (63,404 | ) | |||||
Cash Operating Costs net of by-product credits (2) | A | 19,633 | 39,457 | 106,678 | 149,857 | ||||||||
Payable Silver Production (koz) | B | 6,172 | 5,925 | 23,444 | 23,818 | ||||||||
Cash Costs per ounce net of by-product credits | A/B | $ | 3.18 | $ | 6.66 | $ | 4.55 | $ | 6.29 |
(1) | Figures presented in the reconciliation table above are on a 100% basis as presented in the consolidated financial statements with an adjustment line item to account for the portion of the Morococha and San Vicente mines owned by non-controlling interests, an expense item not included in operating cash costs. The associated tables below are for the Company’s share of ownership only. |
(2) | Figures in this table and in the associated tables below may not add due to rounding. |
Three months ended December 31, 2017 (1) (in thousands of USD except as noted) | |||||||||||||||||||||||||
La Colorada | Dolores | Alamo Dorado | Huaron | Morococha | San Vicente | Manantial Espejo | Consolidated Total | ||||||||||||||||||
Cash Costs before by-product credits | A | $ | 18,708 | $ | 34,778 | $ | 136 | $ | 26,440 | $ | 20,276 | $ | 15,300 | $ | 29,800 | $ | 145,437 | ||||||||
Less gold credit | b1 | (1,377 | ) | (39,708 | ) | (90 | ) | (9 | ) | (625 | ) | (79 | ) | (12,704 | ) | (54,592 | ) | ||||||||
Less zinc credit | b2 | (11,337 | ) | — | — | (12,296 | ) | (12,205 | ) | (3,767 | ) | — | (39,605 | ) | |||||||||||
Less lead credit | b3 | (5,232 | ) | — | — | (4,758 | ) | (2,361 | ) | (131 | ) | — | (12,483 | ) | |||||||||||
Less copper credit | b4 | — | — | — | (7,671 | ) | (9,585 | ) | (1,868 | ) | — | (19,124 | ) | ||||||||||||
Sub-total by-product credits | B=( b1+ b2+ b3+ b4) | $ | (17,947 | ) | $ | (39,708 | ) | $ | (90 | ) | $ | (24,733 | ) | $ | (24,776 | ) | $ | (5,845 | ) | $ | (12,704 | ) | $ | (125,804 | ) |
Cash Costs net of by-product credits | C=(A+B) | $ | 761 | $ | (4,930 | ) | $ | 46 | $ | 1,706 | $ | (4,500 | ) | $ | 9,455 | $ | 17,095 | $ | 19,633 | ||||||
Payable ounces of silver (thousand) | D | 1,777 | 1,254 | 22 | 821 | 607 | 1,046 | 645 | 6,172 | ||||||||||||||||
Cash cost per ounce net of by-products | C/D | $ | 0.43 | $ | (3.93 | ) | $ | 2.09 | $ | 2.08 | $ | (7.42 | ) | $ | 9.04 | $ | 26.52 | $ | 3.18 |
PAN AMERICAN SILVER CORP. 17 |
Year ended December 31, 2017(1) (in thousands of USD except as noted) | |||||||||||||||||||||||||
La Colorada | Dolores | Alamo Dorado | Huaron | Morococha | San Vicente | Manantial Espejo | Consolidated Total | ||||||||||||||||||
Cash Costs before by-product credits | A | $ | 75,407 | 122,532 | $ | 12,666 | $ | 101,588 | $ | 76,085 | $ | 55,286 | $ | 113,726 | $ | 557,291 | |||||||||
Less gold credit | b1 | (4,477 | ) | (129,503 | ) | (2,498 | ) | (148 | ) | (2,639 | ) | (305 | ) | (56,842 | ) | (196,411 | ) | ||||||||
Less zinc credit | b2 | (37,967 | ) | — | — | (46,080 | ) | (39,402 | ) | (10,522 | ) | — | (133,972 | ) | |||||||||||
Less lead credit | b3 | (18,994 | ) | — | — | (19,039 | ) | (7,573 | ) | (672 | ) | — | (46,278 | ) | |||||||||||
Less copper credit | b4 | — | — | (46 | ) | (32,059 | ) | (38,315 | ) | (3,533 | ) | — | (73,952 | ) | |||||||||||
Sub-total by-product credits | B=( b1+ b2+ b3+ b4) | $ | (61,438 | ) | $ | (129,503 | ) | $ | (2,544 | ) | $ | (97,327 | ) | $ | (87,929 | ) | $ | (15,032 | ) | $ | (56,842 | ) | $ | (450,614 | ) |
Cash Costs net of by-product credits | C=(A+B) | $ | 13,970 | $ | (6,971 | ) | $ | 10,123 | $ | 4,261 | $ | (11,844 | ) | $ | 40,254 | $ | 56,884 | $ | 106,677 | ||||||
Payable ounces of silver (thousand) | D | 6,709 | 4,225 | 614 | 3,164 | 2,219 | 3,396 | 3,117 | 23,444 | ||||||||||||||||
Cash cost per ounce net of by-products | C/D | $ | 2.08 | $ | (1.65 | ) | $ | 16.49 | $ | 1.35 | $ | (5.34 | ) | $ | 11.85 | $ | 18.25 | $ | 4.55 |
Three months ended December 31, 2016(1) (in thousands of USD except as noted) | |||||||||||||||||||||||||
La Colorada | Dolores | Alamo Dorado | Huaron | Morococha | San Vicente | Manantial Espejo | Consolidated Total | ||||||||||||||||||
Cash Costs before by-product credits | A | $ | 19,118 | 29,875 | $ | 10,704 | $ | 25,766 | $ | 19,496 | $ | 14,034 | $ | 26,259 | $ | 145,251 | |||||||||
Less gold credit | b1 | (841 | ) | (35,183 | ) | (1,690 | ) | — | (165 | ) | (86 | ) | (14,905 | ) | (52,870 | ) | |||||||||
Less zinc credit | b2 | (7,801 | ) | — | — | (11,056 | ) | (7,361 | ) | (1,568 | ) | — | (27,787 | ) | |||||||||||
Less lead credit | b3 | (3,513 | ) | — | — | (6,005 | ) | (1,444 | ) | (136 | ) | — | (11,098 | ) | |||||||||||
Less copper credit | b4 | — | — | 31 | (5,122 | ) | (7,849 | ) | (1,095 | ) | — | (14,035 | ) | ||||||||||||
Sub-total by-product credits | B=( b1+ b2+ b3+ b4) | $ | (12,155 | ) | $ | (35,183 | ) | $ | (1,659 | ) | $ | (22,183 | ) | $ | (16,819 | ) | $ | (2,885 | ) | $ | (14,905 | ) | $ | (105,790 | ) |
Cash Costs net of by-product credits | C=(A+B) | $ | 6,962 | $ | (5,308 | ) | $ | 9,046 | $ | 3,583 | $ | 2,676 | $ | 11,149 | $ | 11,354 | $ | 39,462 | |||||||
Payable ounces of silver (thousand) | D | 1,588 | 895 | 397 | 789 | 485 | 994 | 777 | 5,925 | ||||||||||||||||
Cash cost per ounce net of by-products | C/D | $ | 4.38 | $ | (5.93 | ) | $ | 22.80 | $ | 4.54 | $ | 5.52 | $ | 11.22 | $ | 14.61 | $ | 6.66 |
Year ended December 31, 2016(1) (in thousands of USD except as noted) | |||||||||||||||||||||||||
La Colorada | Dolores | Alamo Dorado | Huaron | Morococha | San Vicente | Manantial Espejo | Consolidated Total | ||||||||||||||||||
Cash Costs before by-product credits | A | $ | 68,057 | 124,570 | $ | 39,891 | $ | 96,284 | $ | 75,586 | $ | 61,779 | $ | 97,388 | $ | 563,555 | |||||||||
Less gold credit | b1 | (2,929 | ) | (128,696 | ) | (10,251 | ) | (2 | ) | (897 | ) | (335 | ) | (83,992 | ) | (227,103 | ) | ||||||||
Less zinc credit | b2 | (20,636 | ) | — | — | (34,638 | ) | (26,841 | ) | (8,611 | ) | — | (90,726 | ) | |||||||||||
Less lead credit | b3 | (10,487 | ) | — | — | (18,967 | ) | (5,166 | ) | (795 | ) | — | (35,415 | ) | |||||||||||
Less copper credit | b4 | — | — | (100 | ) | (24,113 | ) | (33,701 | ) | (2,534 | ) | — | (60,448 | ) | |||||||||||
Sub-total by-product credits | B=( b1+ b2+ b3+ b4) | $ | (34,052 | ) | $ | (128,696 | ) | $ | (10,351 | ) | $ | (77,720 | ) | $ | (66,605 | ) | $ | (12,275 | ) | $ | (83,992 | ) | $ | (413,692 | ) |
Cash Costs net of by-product credits | C=(A+B) | $ | 34,004 | $ | (4,126 | ) | $ | 29,539 | $ | 18,565 | $ | 8,981 | $ | 49,504 | $ | 13,396 | $ | 149,862 | |||||||
Payable ounces of silver (thousand) | D | 5,531 | 3,831 | 1,844 | 3,208 | 2,132 | 4,143 | 3,130 | 23,818 | ||||||||||||||||
Cash cost per ounce net of by-products | C/D | $ | 6.15 | $ | (1.08 | ) | $ | 16.02 | $ | 5.79 | $ | 4.21 | $ | 11.95 | $ | 4.28 | $ | 6.29 |
PAN AMERICAN SILVER CORP. 18 |
• | Adjusted Earnings and Basic Adjusted Earnings Per Share |
Three Months Ended December 31, | Year ended December 31, | |||||||||||||||
(In thousands of USD, except as noted) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Net earnings for the period | $ | 49,664 | $ | 22,284 | $ | 123,451 | $ | 101,825 | ||||||||
Adjust for: | ||||||||||||||||
Derivative gains | (64 | ) | — | (64 | ) | — | ||||||||||
Impairment reversals | (61,554 | ) | — | (61,554 | ) | — | ||||||||||
Write-down of project development costs | — | — | 1,898 | — | ||||||||||||
Unrealized foreign exchange losses (gains) | 362 | 4,139 | (383 | ) | 5,759 | |||||||||||
Net realizable value adjustments to heap inventory | 4,936 | (6,619 | ) | 10,060 | (14,110 | ) | ||||||||||
Unrealized losses (gains) on commodity contracts | 2,190 | (435 | ) | (909 | ) | (21 | ) | |||||||||
Share of loss from associate and dilution gain | (259 | ) | (8,484 | ) | (2,052 | ) | (7,946 | ) | ||||||||
Mine operation severance costs | — | — | 3,509 | — | ||||||||||||
Reversal of previously accrued tax liabilities | — | — | (2,793 | ) | — | |||||||||||
Gain (loss) on sale of assets | 794 | (157 | ) | (191 | ) | (25,100 | ) | |||||||||
Closure and decommissioning liability adjustment | 4,515 | — | 8,388 | — | ||||||||||||
Adjust for effect of taxes relating to the above | $ | 6,046 | $ | 2,180 | $ | 2,273 | $ | 11,870 | ||||||||
Adjust for effect of foreign exchange on taxes | 12,589 | 6,057 | (3,928 | ) | 14,323 | |||||||||||
Adjusted earnings for the period | $ | 19,219 | $ | 18,965 | $ | 77,705 | $ | 86,600 | ||||||||
Weighted average shares for the period | 153,207 | 152,118 | 153,070 | 152,118 | ||||||||||||
Adjusted earnings per share for the period | $ | 0.13 | $ | 0.12 | $ | 0.51 | $ | 0.57 |
PAN AMERICAN SILVER CORP. 19 |
Three months ended December 31, | Year ended December 31, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Tonnes milled - kt | 170.7 | 154.6 | 655.3 | 528.8 | ||||||||
Average silver grade – grams per tonne | 374 | 370 | 368 | 377 | ||||||||
Average zinc grade - % | 2.88 | 2.79 | 2.81 | 2.63 | ||||||||
Average lead grade - % | 1.54 | 1.31 | 1.54 | 1.31 | ||||||||
Average silver recovery - % | 91.1 | 90.5 | 91.1 | 90.3 | ||||||||
Average zinc recovery - % | 84.1 | 84.5 | 83.7 | 82.2 | ||||||||
Average lead recovery - % | 86.2 | 86.7 | 86.9 | 86.5 | ||||||||
Production: | ||||||||||||
Silver – koz | 1,870 | 1,665 | 7,056 | 5,795 | ||||||||
Gold – koz | 1.26 | 0.86 | 4.29 | 2.93 | ||||||||
Zinc – kt | 4.14 | 3.64 | 15.44 | 11.40 | ||||||||
Lead – kt | 2.26 | 1.76 | 8.80 | 6.00 | ||||||||
Cash cost per ounce net of by-products | $ | 0.43 | $ | 4.38 | $ | 2.08 | $ | 6.15 | ||||
AISCSOS | $ | 2.81 | $ | 5.52 | $ | 4.44 | $ | 7.49 | ||||
Payable silver sold - koz | 1,847 | 1,561 | 6,853 | 5,486 | ||||||||
Sustaining capital - (’000s) | $ | 2,576 | $ | 2,229 | $ | 13,970 | $ | 10,545 |
Three months ended December 31, | Year ended December 31, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Tonnes placed - kt | 1,785.1 | 1,650.5 | 9,288.7 | 6,306.5 | ||||||||
Average silver grade – grams per tonne | 39 | 43 | 38 | 37 | ||||||||
Average gold grade – grams per tonne | 0.76 | 0.79 | 0.66 | 0.75 | ||||||||
Average silver produced to placed ratio - % | 55.5 | 39.2 | 51.7 | 50.8 | ||||||||
Average gold produced to placed ratio - % | 71.8 | 69.1 | 70.7 | 67.7 | ||||||||
Production: | ||||||||||||
Silver – koz | 1,256 | 897 | 4,232 | 3,838 | ||||||||
Gold – koz | 31.2 | 28.8 | 103.0 | 102.8 | ||||||||
Cash cost per ounce net of by-products | (3.93 | ) | (5.93 | ) | (1.65 | ) | (1.08 | ) | ||||
AISCSOS | 13.62 | 2.96 | 10.00 | 8.29 | ||||||||
Payable silver sold - koz | 1,225 | 895 | 4,089 | 3,839 | ||||||||
Sustaining capital - (’000s) | $ | 13,303 | $ | 10,772 | $ | 36,071 | $ | 48,079 |
PAN AMERICAN SILVER CORP. 20 |
Three months ended December 31, | Year ended December 31, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Tonnes milled - kt | — | 448.6 | 451.8 | 1,833.1 | ||||||||
Average silver grade – grams per tonne | NA | 40 | 43 | 45 | ||||||||
Average gold grade – grams per tonne | NA | 0.14 | 0.17 | 0.18 | ||||||||
Average silver recovery - % | NA | 65.2 | 67.6 | 68.8 | ||||||||
Production: | ||||||||||||
Silver – koz | 32.7 | 401.0 | 640.7 | 1,864.0 | ||||||||
Gold – koz | 0.1 | 1.4 | 2.1 | 8.4 | ||||||||
Copper – tonnes | 0 | 0 | 13 | 30 | ||||||||
Cash cost per ounce net of by-products | 2.09 | 22.80 | 16.49 | 16.02 | ||||||||
AISCSOS | 17.45 | 28.44 | 17.69 | 14.85 | ||||||||
Payable silver sold - koz | 133 | 286 | 867 | 1,967 | ||||||||
Sustaining capital - (’000s) | $ | — | $ | — | $ | — | $ | — |
Three months ended December 31, | Year ended December 31, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Tonnes milled - kt | 231.5 | 229.9 | 928.1 | 904.4 | ||||||||
Average silver grade – grams per tonne | 152 | 149 | 146 | 157 | ||||||||
Average zinc grade - % | 2.58 | 3.12 | 2.70 | 3.01 | ||||||||
Average lead grade - % | 1.15 | 1.59 | 1.23 | 1.51 | ||||||||
Average copper grade - % | 0.70 | 0.78 | 0.84 | 0.90 | ||||||||
Average silver recovery - % | 84.1 | 85.3 | 85.2 | 84.1 | ||||||||
Average zinc recovery - % | 77.8 | 74.6 | 77.6 | 74.3 | ||||||||
Average lead recovery - % | 76.6 | 81.4 | 77.7 | 79.4 | ||||||||
Average copper recovery - % | 74.5 | 72.1 | 78.5 | 75.5 | ||||||||
Production: | ||||||||||||
Silver – koz | 951 | 935 | 3,684 | 3,812 | ||||||||
Gold – koz | 0.19 | 0.20 | 1.15 | 0.81 | ||||||||
Zinc – kt | 4.64 | 5.31 | 19.37 | 19.94 | ||||||||
Lead – kt | 2.03 | 2.97 | 8.77 | 10.72 | ||||||||
Copper – kt | 1.21 | 1.27 | 6.09 | 6.07 | ||||||||
Cash cost per ounce net of by-products | $ | 2.08 | $ | 4.54 | $ | 1.35 | $ | 5.79 | ||||
AISCSOS | $ | 7.00 | $ | 12.62 | $ | 5.25 | $ | 11.11 | ||||
Payable silver sold – koz | 813 | 759 | 3,181 | 3,233 | ||||||||
Sustaining capital - (’000s) | $ | 3,548 | $ | 4,355 | $ | 10,267 | $ | 11,994 |
PAN AMERICAN SILVER CORP. 21 |
Three months ended December 31, | Year ended December 31, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Tonnes milled – kt | 170.6 | 164.2 | 676.9 | 672.8 | ||||||||
Average silver grade – grams per tonne | 145 | 126 | 137 | 135 | ||||||||
Average zinc grade - % | 3.25 | 2.81 | 3.01 | 3.15 | ||||||||
Average lead grade - % | 0.84 | 0.71 | 0.78 | 0.75 | ||||||||
Average copper grade - % | 1.07 | 1.23 | 1.20 | 1.44 | ||||||||
Average silver recovery - % | 91.0 | 88.6 | 89.2 | 88.4 | ||||||||
Average zinc recovery - % | 81.2 | 76.2 | 79.6 | 73.2 | ||||||||
Average lead recovery - % | 71.0 | 62.9 | 66.6 | 60.0 | ||||||||
Average copper recovery - % | 83.4 | 82.6 | 83.9 | 82.6 | ||||||||
Production: | ||||||||||||
Silver – koz | 721 | 578 | 2,634 | 2,541 | ||||||||
Gold – koz | 0.82 | 0.43 | 3.53 | 2.14 | ||||||||
Zinc – kt | 4.49 | 3.48 | 16.13 | 15.46 | ||||||||
Lead – kt | 1.00 | 0.72 | 3.46 | 2.94 | ||||||||
Copper – kt | 1.49 | 1.60 | 6.64 | 7.74 | ||||||||
Cash cost per ounce net of by-products | $ | (7.42 | ) | $ | 5.52 | $ | (5.34 | ) | $ | 4.21 | ||
AISCSOS | $ | (1.54 | ) | $ | 15.02 | $ | 1.22 | $ | 9.32 | |||
Payable silver sold (100%) - koz | 658 | 526 | 2,448 | 2,377 | ||||||||
Sustaining capital (100%) - (’000s) | $ | 3,162 | $ | 4,892 | $ | 12,428 | $ | 10,945 |
(1) | Production figures are for Pan American’s 92.3% share only, unless otherwise noted. |
PAN AMERICAN SILVER CORP. 22 |
Three months ended December 31, | Year ended December 31, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Tonnes milled – kt | 89.5 | 81.5 | 328.1 | 338.9 | ||||||||
Average silver grade – grams per tonne | 406 | 431 | 374 | 443 | ||||||||
Average zinc grade - % | 2.01 | 1.41 | 1.94 | 2.05 | ||||||||
Average lead grade - % | 0.25 | 0.29 | 0.29 | 0.32 | ||||||||
Average silver recovery - % | 93.9 | 93.9 | 92.6 | 93.2 | ||||||||
Average zinc recovery - % | 77.7 | 64.3 | 68.7 | 73.0 | ||||||||
Average lead recovery - % | 79.1 | 87.8 | 80.1 | 84.2 | ||||||||
Production: | ||||||||||||
Silver – koz | 1,102 | 1,050 | 3,610 | 4,433 | ||||||||
Gold – koz | 0.14 | 0.51 | ||||||||||
Zinc – kt | 1.40 | 0.75 | 4.36 | 5.08 | ||||||||
Lead – kt | 0.11 | 0.09 | 0.47 | 0.59 | ||||||||
Copper – kt | 0.33 | 0.23 | 0.63 | 0.55 | ||||||||
Cash cost per ounce net of by-products | $ | 9.04 | $ | 11.22 | $ | 11.85 | $ | 11.95 | ||||
AISCSOS | $ | 12.31 | $ | 12.43 | $ | 14.40 | $ | 14.30 | ||||
Payable silver sold (100%) - koz | 1,218 | 1,332 | 3,603 | 4,264 | ||||||||
Sustaining capital (100%) - (’000s) | $ | 1,939 | $ | 1,631 | $ | 8,146 | $ | 4,963 |
(1) | Production figures are for Pan American’s 95.0% share only, unless otherwise noted. |
Three months ended December 31, | Year ended December 31, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Tonnes milled - kt | 205.1 | 205.0 | 793.5 | 753.6 | ||||||||
Average silver grade – grams per tonne | 107 | 130 | 134 | 143 | ||||||||
Average gold grade – grams per tonne | 1.62 | 2.00 | 1.88 | 2.94 | ||||||||
Average silver recovery - % | 89.7 | 91.1 | 90.6 | 90.2 | ||||||||
Average gold recovery - % | 93.5 | 92.8 | 93.8 | 93.8 | ||||||||
Production: | ||||||||||||
Silver – koz | 646 | 779 | 3,123 | 3,136 | ||||||||
Gold – koz | 9.98 | 12.21 | 45.34 | 66.89 | ||||||||
Cash cost per ounce net of by-products | $ | 26.52 | $ | 14.61 | $ | 18.25 | $ | 4.28 | ||||
AISCSOS | $ | 28.63 | $ | 3.77 | $ | 23.42 | $ | (2.08 | ) | |||
Payable silver sold - koz | 766 | 779 | 3,171 | 3,033 | ||||||||
Sustaining capital - (’000s) | $ | 1,045 | $ | 1,097 | $ | 3,333 | $ | 2,868 |
PAN AMERICAN SILVER CORP. 23 |
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