Pan American Silver Cuts La Colorada Capex to $1.9B, Sees $2.6B NPV
Pan American Silver’s revised La Colorada Skarn plan cuts capital to $1.9 billion, targets a $2.6 billion after-tax NPV and 17% IRR at base-case prices, and phases in higher-grade ore for early cash flow. The 37-year project forecasts 15.8 million silver ounces at negative $22.67 all-in costs with a four-year payback.
1. Revised Development Strategy
Pan American Silver has moved away from a large-scale bulk caving concept in favor of a phased, capital-efficient approach, cutting initial capex to $1.9 billion and integrating high-grade skarn and vein zones for early cash flow while retaining full ownership of the project.
2. Economic Assessment
The PEA reports an after-tax net present value of $2.6 billion and a 17% internal rate of return at base-case metal prices, with a four-year payback on initial investment; at higher commodity assumptions, NPV could rise to $5.2 billion and IRR to 25%.
3. Production Forecast and Costs
The 37-year La Colorada Skarn project is expected to produce 15.8 million silver ounces annually in the first five years at negative $22.67 per ounce all-in sustaining costs, supported by a 15,000 tonne-per-day processing plant and by-product credits from zinc and lead.