Pan American Silver lowers guidance on mine blockage, COVID-19

Pan American Silver lowered 2021 production guidance due to the blockage of a ventilation project at its La Colorada mine in Mexico and COVID-19 constraints at Manantial Espejo in Argentina.

“At La Colorada, we experienced large inventory build-ups and a blockage of a ventilation project that occurred during commissioning, which reduced Q1 sales and production,” CEO Michael Steinmann said in a release.

The issue is expected to be resolved this year.

The rollout of COVID-19 vaccines during the year is also expected to alleviate some impacts from the pandemic, Steinmann added.

GUIDANCE

Pan American reduced its 2021 silver production guidance to 20.5-22.0Moz from 22.5-24.0Moz originally as a result of the blockage, which will result in 20-25% lower silver output at La Colorada.

The guidance cut also reflects an 8-10% shortfall in silver output at Manantial Espejo, due to higher than anticipated pandemic-related personnel shortages.

BYPRODUCTS

Zinc, lead and copper production guidance was also revised due to lower expected output at La Colorada, which will be partially offset by higher than guided output from Huarón and Morococha in Peru.

The company expects to produce 55,500-60,500t zinc, 21,000-23,500t lead and 8,500-9,000t copper in 2021.

LA COLORADA SKARN

Vancouver-based Pan American also released results from 28 drill holes at its La Colorada skarn project.

The 65,000m annual drill program prioritizes infill drilling in H1 before moving on to step-out and exploration drilling in the second half, VP business development and geology Christopher Emerson said in a separate release.

The company plans to complete a PEA on the skarn discovery by year-end.