Pan American Silver Corp. (NASDAQ:PAAS) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 11:00 am ET

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Pan American Silver Corp. (NASDAQ:PAAS) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Executive
Michael Steinmann

as when we deemed that it's safe for us to restart, we will, for sure, restart the operations then as quick as we can.

Analyst
Chris Terry

Okay, thank you. And then I see the strong results coming through on the skarn deposit for La Colorada. Maybe if you can just give a time line of the upcoming events or what you're doing now and drilling when the next update will be when you might get a reserve, just the time line of events for that project. Thank you.

Executive
Michael Steinmann

Sure. Yes, very strong results there. Look, in my view, this is obviously a world-class deposit. It's very large. It can grow all around. It's open in most of the directions. I think we will focus on infill drilling from now on. I mean, we can -- if not -- we can spend a long time and make this much, much bigger. But at the end of the day, I think we have to focus on increasing geological confidence here and pass tons into mass and indicated and then do the technical studies that we need to do on that deposit to move it into our reserves, as you indicated.

So time line's still a bit early to say, Chris. For sure, I will have a bit more information on that the next quarter and the one after. We are discussing actually internally right now how to best access the top part of the skarn we are looking at ramping down from existing underground levels or ramping down from the surface with a large ramp to get access the third alternative, and there's maybe a combination of those three as well will be a large shaft from surface. So as you can imagine, there's a lot of technical studies needed for that.

But you should plan on that you're going to see updates really on infill drilling from now on and increasing confidence on the geology, so we can move forward with the technical work.

Analyst
Chris Terry

Thank you. And then just a smaller one. On the second quarter, there was a difference between sales and production. Just thinking about the guidance you provided for the rest of the year, maybe you could just comment on expectations for sales versus production. Should we assume they're pretty close to each other in 3Q and 4Q?

Executive
A. Robert Doyle

Hi Chris. Good morning. Rob Doyle here. Yes, you're right. We did have some benefit in Q2 of drawing down inventory and selling previously produced production. And in Q3, we expect to rebuild that inventory, but it should even out over the quarters. And we're expecting the second half sales to be virtually in line with production, perhaps a small lag just to build up the inventories as we ramp up the -- particularly at the heap leach operations.

Analyst
Chris Terry

Thanks. Thanks. Appreciate it. Hope you're well. And just one final question for me. I know Michael, you normally have some good insights on the silver market. Just wondering whether you wanted to