Pan American Silver Feb 2015 Florida

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Pan American Silver Feb 2015 Florida

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  BMO Global Metals & Mining Conference February 23, 2015 -Florida  Cautionary Note NON-GAAP MEASURE   – CASH COSTS PER PAYABLE OUNCE OFSILVER PRODUCED, NET OFBY-PRODUCT CREDITS  THIS PRESENTATION PRESENTS INFORMATION ABOUT OUR CASH COSTS OF PRODUCTION OF A PAYABLE OUNCE OF SILVER FOR OUR OPERATING MINES. CASH COSTS PER PAYABLE OUNCE PRODUCED, NET OF BY-PRODUCT CREDITS, IS CALCULATED AS FOLLOWS:   EXCEPT AS OTHERWISE NOTED, CASH COSTS PER PAYABLE OUNCE PRODUCED IS CALCULATED BY DIVIDING TOTAL CASH COSTS NET OF BY-PRODUCT CREDITS BY TOTAL PAYABLE SILVER OUNCES PRODUCED AT THE RELEVANT MINEOR MINES.   TOTAL CASH COSTS INCLUDE MINE OPERATING COSTS SUCH AS MINING, PROCESSING, ADMINISTRATION, ROYALTIES AND OPERATING TAXES, BUT EXCLUDE AMORTIZATION, RECLAMATION COSTS, FINANCINGCOSTSAND CAPITAL DEVELOPMENT AND EXPLORATION.CERTAIN AMOUNTS OFSTOCK-BASED COMPENSATION ARE EXCLUDED AS WELL.CASH COST PER PAYABLE OUNCE OF SILVER PRODUCED, NET OF BY-PRODUCT CREDITS, IS INCLUDED IN THIS PRESENTATION BECAUSE CERTAIN INVESTORS USE THIS INFORMATION TO ASSESS OUR PERFORMANCE AND ALSO TO DETERMINE OUR ABILITY TO GENERATE CASH FLOW FOR USE IN INVESTING AND OTHER ACTIVITIES.THE INCLUSION OF CASH COSTS PER PAYABLE OUNCE PRODUCED, NET OF BY-PRODUCT CREDITS, MAY ENABLE INVESTORS TO BETTER UNDERSTAND YEAR-OVER-YEAR CHANGES IN OUR PRODUCTION COSTS, WHICH IN TURN AFFECT PROFITABILITY AND CASH FLOW. CASH COSTS PER OUNCE, NET OF BY-PRODUCT CREDITS IS A NON-GAAP MEASURE AND DOES NOT HAVE A STANDARDIZED MEANING OR A CONSISTENT BASIS OF CALCULATION PRESCRIBED BY CANADIAN ACCOUNTING STANDARDS. INVESTORS ARE CAUTIONED THAT CASH COSTS PER PAYABLE OUNCE PRODUCED, NET OF BY-PRODUCT CREDITS, SHOULD NOT BE CONSIDERED IN ISOLATION OR CONSTRUED AS A SUBSTITUTE TO COSTS DETERMINED IN ACCORDANCE WITH CANADIAN ACCOUNTINGSTANDARDS AS PRESCRIBED UNDER IFRS AS AN INDICATOR OF PERFORMANCE. OUR METHOD OF CALCULATING CASH COSTS PER PAYABLE OUNCE PRODUCED MAY DIFFER FROM THE METHODS USED BY OTHER ENTITIES AND, ACCORDINGLY, OUR CASH COSTS PER PAYABLE OUNCE PRODUCED MAY NOT BE COMPARABLE TO SIMILARLY TITLED MEASURED USED BY OTHER ENTITIES. READERS SHOULD REFER TO THE ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES SECTION OFTHE   COMPANY’S   MOSTRECENT MD&A FORTHE PERIOD ENDING SEPTEMBER 30, 2014 FORA MORE DETAILED DISCUSSION OFTHIS MEASURE. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS  CERTAIN OF THE STATEMENTS AND INFORMATION IN THIS PRESENTATION CONSTITUTE   “FORWARD -LOOKING  STATEMENTS”   WITHIN THE MEANING OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND  “FORWARD -LOOKING  INFORMATION”   WITHIN THE MEANING OF APPLICABLE CANADIAN PROVINCIAL SECURITIES LAWS. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT, ARE FORWARD-LOOKINGSTATEMENTS OR INFORMATION.FORWARD-LOOKING STATEMENTSOR INFORMATION IN THIS PRESENTATION RELATE TO,AMONG OTHER THINGS:OUR FORECAST PRODUCTION OF SILVER, GOLD AND OTHER METALS IN 2015;OUR ESTIMATED CASH COSTS PER OUNCE OF SILVER IN 2014 AND FORECAST CASH COSTS PER OUNCE OF SILVER IN 2015; OUR ANTICIPATED CAPITAL INVESTMENTS FOR 2015; THE ABILITY OF THE COMPANY TOSUCCESSFULLY COMPLETE ANY CAPITAL INVESTMENT PROGRAMS AND PROJECTS AND THE IMPACTS OF ANY SUCH PROGRAMS AND PROJECTS ON THE COMPANY; AND ANY ANTICIPATED LEVEL OF FINANCIAL ANDOPERATIONAL SUCCESS IN 2015.THESE STATEMENTS REFLECT THE   COMPANY’S   CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE NECESSARILY BASED UPON A NUMBER OF ASSUMPTIONS THAT, WHILE CONSIDERED REASONABLE BY THE COMPANY, ARE INHERENTLY SUBJECT TO SIGNIFICANT OPERATIONAL, BUSINESS, ECONOMIC AND REGULATORY UNCERTAINTIES AND CONTINGENCIES. THESE ASSUMPTIONS INCLUDE: TONNAGE OF ORE TO BE MINED ANDPROCESSED; ORE GRADES AND RECOVERIES; PRICES FOR SILVER, GOLD AND BASE METALS; CAPITAL, DECOMMISSIONING AND RECLAMATION ESTIMATES; OUR MINERAL RESERVE AND RESOURCE ESTIMATES AND THE  ASSUMPTIONS UPON WHICH THEY ARE BASED; PRICES FOR ENERGY INPUTS, LABOUR, MATERIALS, SUPPLIES AND SERVICES (INCLUDING TRANSPORTATION); NO LABOUR-RELATED DISRUPTIONS AT ANY OF OUR OPERATIONS: NO UNPLANNED DELAYS IN OR INTERRUPTIONS IN SCHEDULED PRODUCTION; ALL NECESSARY PERMITS, LICENCES AND REGULATORY APPROVALS FOR OUR OPERATIONS ARE RECEIVED IN A TIMELY MANNER; AND OUR ABILITYTOCOMPLY WITHENVIRONMENTAL, HEALTH AND SAFETY LAWS.THE FOREGOINGLISTOF ASSUMPTIONS ISNOT EXHAUSTIVE.THE COMPANY CAUTIONS THE READER THAT FORWARD-LOOKING STATEMENTS AND INFORMATION INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS ANDDEVELOPMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS OR INFORMATION CONTAINED IN THIS PRESENTATION AND THE COMPANY HAS MADE  ASSUMPTIONS AND ESTIMATES BASED ON OR RELATED TO MANY OF THESE FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION:FLUCTUATIONS IN SILVER,GOLD AND BASE METALS PRICES; FLUCTUATIONS IN PRICESFOR ENERGY INPUTS, LABOUR, MATERIALS, SUPPLIES AND SERVICES (INCLUDING TRANSPORTATION); FLUCTUATIONS IN CURRENCY MARKETS (SUCH AS THE CANADIAN DOLLAR, PERUVIAN SOL, MEXICAN PESO ANDBOLIVIAN BOLIVIANO VERSUS THE U.S. DOLLAR); OPERATIONAL RISKS AND HAZARDS INHERENT WITH THE BUSINESS OFMINING(INCLUDING ENVIRONMENTAL ACCIDENTS AND HAZARDS, INDUSTRIAL ACCIDENTS, EQUIPMENT BREAKDOWN, UNUSUAL OR UNEXPECTED GEOLOGICAL OR STRUCTURAL FORMATIONS, CAVE-INS, FLOODING AND SEVERE WEATHER); RISKS RELATING TO THE CREDIT WORTHINESS OR FINANCIAL CONDITION OF SUPPLIERS, REFINERS AND OTHER PARTIES WITH WHOM THE COMPANY DOES BUSINESS; INADEQUATE INSURANCE, OR INABILITY TO OBTAIN INSURANCE, TO COVER THESE RISKS AND HAZARDS; EMPLOYEE RELATIONS;RELATIONSHIPS WITH,AND CLAIMS BY, LOCAL COMMUNITIES AND INDIGENOUS POPULATIONS; OUR ABILITYTOOBTAIN ALL NECESSARY PERMITS, LICENSES AND REGULATORY APPROVALS IN A TIMELY MANNER;CHANGES IN LAWS, REGULATIONS AND GOVERNMENT PRACTICES IN THE JURISDICTIONS WHERE WE OPERATE, INCLUDING ENVIRONMENTAL, EXPORT AND IMPORT LAWS AND REGULATIONS; DIMINISHING QUANTITIES OR GRADES OF MINERAL RESERVES AS PROPERTIES ARE MINED; INCREASED COMPETITION IN THE MINING INDUSTRY FOR EQUIPMENT AND QUALIFIED PERSONNEL; AND THOSE FACTORS IDENTIFIED UNDER THE CAPTION   “RISKS   RELATEDTO PAN   AMERICAN’S BUSINESS”   IN THE   COMPANY’S   MOST RECENT FORM 40-F AND ANNUAL INFORMATION FORM FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND CANADIAN PROVINCIALSECURITIES REGULATORY AUTHORITIES. ALTHOUGH THE COMPANY HAS ATTEMPTED TO IDENTIFY IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY, THERE MAY BE OTHER FACTORSTHAT CAUSE RESULTS NOT TO BE AS ANTICIPATED, ESTIMATED, DESCRIBED OR INTENDED. INVESTORS ARE CAUTIONED AGAINST UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS AND INFORMATION. FORWARD-LOOKING STATEMENTS AND INFORMATION ARE DESIGNED TO HELP READERS UNDERSTAND  MANAGEMENT’S   CURRENT VIEWS OF OUR NEAR AND LONGER TERM PROSPECTS AND MAY NOT BE APPROPRIATE FOR OTHER PURPOSES. THE COMPANY DOES NOT INTEND, NOR DOES IT ASSUME ANY OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS AND INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION,CHANGES IN ASSUMPTIONS, FUTUREEVENTS OROTHERWISE,EXCEPT TOTHE EXTENT REQUIRED BY APPLICABLE LAW. TechnicalinformationcontainedinthispresentationwithrespecttoPanAmericanhasbeenreviewedbyMichaelSteinmann,P.Geo.,ExecutiveVPCorporateDevelopment&Geology,andMartinWafforn,P.Eng.,VPTechnicalServices,whoarethe Company’s QualifiedPersonsforthepurposesofNI43-101. 2  Diversified Operations & Projects  Q4 2014 Production 4 Mine AgProduction (1) (Moz)Au Production (1) (koz)Cash Costs (2) La Colorada1.30.72$7.57Dolores0.9517.99$12.99Alamo Dorado0.865.67$14.07Huaron0.950.30$12.22Morococha(92.3%)0.600.91$12.53San Vicente (95%)1.17n/a$11.88ManantialEspejo0.9118.27$13.93 TOTAL (1) 6.7543.9$11.92 (3) (1) Silver production rounded to the nearest 10,000 ounces and gold production rounded to the nearest 100 ounces. Totals may not add up due to rounding. (2) Average by-product metal prices for 2014 were: Au $1,266/oz, Zn $2,164/tonne, Pb$2,096/tonne, Cu $6,862/tonne. Cash costs is a non-GAAP measure and readers should refer to the information under the heading “Non -GAAP Measure  –Cash Costs Per Payable Ounce of Silver Produced, Net of By Product Credits” at the beginni ng of this presentation for more information. (3) Previously reported cash costs for the Company’s Peruvian operations overstated copper by -product credits.Both consolidated and Peruvian annual cash costs for 2014 and 2013 have been adjusted to correct for this overstatement. The effect of these corrections on 2014’s annual cash costs was as follows: a $0.50 per ounce increase to consolidated cash costs (2013 -$0.15); a $2.87 per ounce increase to Huaroncash costs (2013 -$0.85); and, a $1.72 per ounce increase to Morocochacash costs (2013 -$0.58).
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