Pan American Silver Corporation (NYSE:PAAS) Q2 2022 Results Conference Call August 11, 2022 11:00 AM ET

Company Participants

Siren Fisekci - Vice President, Investor Relations and Corporate Communications

Michael Steinmann - President and CEO

Ignacio Couturier - CFO

Steve Busby - COO

Sean McAleer - Senior Vice President & MD-Guatemala

Chris Emerson - Vice President, Business Development & Geology

Conference Call Participants

Cosmos Chiu - CIBC

Trevor Turnbull - Scotiabank

Lawson Winder - Bank of America Securities

John Tumazos - John Tumazos

Don DeMarco - National Bank Financial

Operator

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Second Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions [Operator Instructions].

I would now like to turn the conference over to Siren Fisekci, VP Investor Relations. Please go ahead.

Siren Fisekci

Thank you for joining us today for Pan American Silver's Q2 2022 conference call. This call includes forward-looking statements and information and makes reference to non-GAAP measures. Please see the cautionary statements in our MD&A, news release and presentation slides for our Q2 2022 unaudited results, all of which are available on our website.

I'll now turn the call over to Michael Steinmann, Pan American's President and CEO.

Michael Steinmann

Thank you, Siren and welcome everyone to our Q2 call. In Q2, we produced 4.5 million ounces of silver, led by strong performance at La Colorada. Production at La Colorada was up more than 50% from Q2 last year to approximately 1.7 million ounces, reflecting the improved ventilation conditions in the mine. In July, the new refrigeration plant began operating, which we expect will further improve working conditions in the mine.

Gold production was 128,300 ounces in Q2, despite lower than expected production at Dolores from Phase 9B, which also reduced consolidated silver production. Q2 gold production was within our expected range for the quarter. Dolores had a market impact on our Q2 results. This stems from the shortfall in grades from Phase 9B and the resulting production year-to-date being less than expected, which triggered an analysis for impairment.

We did that impairment analysis at the time of industry-wide cost inflation. Incorporating higher cost assumptions, especially affects the value of a shorter live assets such as Dolores. It was a factor in our decision to suspend the underground mine in Q2 and the subsequent reclassification of underground reserves to resources. And it resulted in shortening the estimated duration of economic residual leaching to the year 2030. Of course, this is highly dependent on metal prices and costs over the coming years and will be adjusted accordingly.