A Member of Pat McKeough’s Inner Circle recently asked for his advice on Pan American Silver Corp., a leading multi‑mine silver producer with a diversified portfolio of operations across the Americas.
Pat likes the firm’s leveraged silver upside: with record production and falling costs. The rising dividend is another plus. However, Pat notes that volatile silver prices can drive large swings in earnings and cash flow given the company’s commodity‑leveraged operating model. The portfolio also faces geopolitical and regulatory risk in Latin America.
Pan American Silver Corp. (Symbol PAAS on Toronto; www.panamericansilver.com) is a leading producer of silver and gold in the Americas.
The company has operating mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile, and Argentina. It also owns the Escobal mine in Guatemala, which has suspended its operations. In addition, Pan American has interests in exploration and development projects.
The company operates through two segments: Silver and Gold.
In 2025, the Silver unit produced 22.8 million ounces of silver. The segment has four producing mines: La Colorada in Zacatecas, Mexico; Cerro Moro in Santa Cruz, Argentina; Huaron in Pasco, Peru; and San Vicente in Potosi, Bolivia.
Non-producing mines include Escobal in Santa Rosa, Guatemala, and Navidad in Chubut Argentina.
A Guatemalan court suspended Escobal’s license after it found the government had failed to adequately consult with the nearby Xinka Indigenous people about the project. The suspension remains in place while the consultation process continues.
The Navidad mine is on a care and maintenance schedule due to legal restrictions that prohibit open-pit mining and the use of cyanide to extract silver from ores. Pan American continues to maintain the mine under the current laws.
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The Gold segment produced 742,200 ounces of gold in 2025. The unit has six producing mines: Jacobina in Bahia, Brazil; El Penon in Antofagasta, Chile; Timmins in Ontario, Canada; Shahuindo in Cajamarca, Peru; Minera Florida in Metropolitan Region, Chile; and Dolores in Chihuahua, Mexico.
In September 2025, Pan American completed the acquisition of MAG Silver Corp. for about $2.1 billion U.S.
Through MAG, the company acquires one of the best silver mines in the world. The Juanicipio Mine located in Zacatecas, Mexico, is a large-scale, high-grade, low-cost silver mine. Pan American also sees future growth opportunities through the substantial exploration potential at the mine. Plus, it likes the potential of MAG’s Deer Trail (Utah, U.S.) and Larder (Northern Ontario) exploration and development properties.
Pan American posts record quarterly earnings boosting dividend
In the three months ended December 31, 2025, Pan American’s revenue jumped 44.7% to $1.18 billion from $815 million a year earlier. The record revenue was primarily driven by substantially higher realized metal prices and increased silver production. The realized price for silver skyrocketed 88.4% to $58.16 an ounce from $30.87. The company’s realized price for gold reached $4,186 an ounce, up 57.0% from $2,666.
Excluding one-time items, Pan American’s earnings were $470 million, or $1.11 a share, in the latest quarter. That was up 267.2% from $128 million, or $0.35. This record profitability was fueled by the significant expansion of profit margins as metal prices rose sharply while costs fell.
Pan American raised its quarterly dividend by 28.6% with the March 2026 payment, to $0.18 a share from $0.14. The stock yields 1.1%.
Silver prices continue to heavily influence Pan American’s share price. That’s the same for most precious metals producers. But we think the direction of silver prices, and Pan American shares, will continue to be positive—even after its recent all-time highs. That’s partly because of investment demand, as many investors see silver as a safe-haven asset that has a lower price than gold.
But the higher demand for silver is also because of rising global industrial use combined with a supply deficit of silver. Silver is used in solar panels, electric vehicles, and other key green technologies. And while the green tech sector in the U.S. is currently facing some challenges, global demand for these technologies should continue to rise.
Recommendation in Pat’s Inner Circle: Pan American Silver Corp. is okay to hold.
