Pan American Silver Corp. (PAAS,PAA.TO) reported that its first-quarter net earnings declined to $20.08 million or share from last year's $50.24 million, with earnings per basic share decreasing to $0.13 from the prior year's $0.47 last year.
Net earnings were negatively impacted by lower mine operating earnings on higher costs of sales due to higher depreciation and amortization at the Dolores mine, and a net non-cash impairment loss of $31.8 million on account of the proposed sale of non-core late-stage gold development assets to Esperanza, offset in part by a $4.0 million cash gain on the sale of interests in non-core exploration properties during the quarter.
Adjusted earnings for the latest-quarter were $39.97 million, and $0.26 per basic share, after adjusting for a non-cash $27.7 million net loss on the sale of several non-core late-stage gold exploration assets, a $10.9 million unrealized mark to market derivative gain on the Company's outstanding warrants, a $4.3 million unrealized loss on foreign exchange, and a $1.3 million unrealized gain on commodity contracts.
Adjusted earnings for the prior-quarter were $69.14 million, and $0.66 per basic share.
The company reported that its first quarter silver production increased 14% to 6.3 million ounces, while gold production increased 65% to 32,100 ounces as compared to the same period in 2012. The silver and gold production increases were largely the result of the addition of low-cost production from the Dolores mine, which was acquired on March 30, 2012.
Revenue for the quarter was $243.0 million, up 6% from revenue recorded in the first quarter of 2012. The increase in revenue resulted from higher quantities of metals sold with the exception of zinc and lead, but was partially offset by lower realized prices for silver, gold and copper.
Analysts polled by Thomson Reuters expected the company to report earnings of $0.25 per share on revenues of $257.03 million for the quarter. Analysts' estimates typically exclude special items.
Steve Busby, Chief Operating Officer, said, "From an operating point of view, the first quarter's results were a good start to the year, with production largely in line and costs below expectations. I am confident that we will meet or exceed the full year guidance we previously provided."
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