While markets are rising today, shares of precious-metals miner Pan American Silver (PAAS -1.49%) are looking a lot less lustrous in investors' eyes. Reporting its second-quarter 2022 earnings yesterday after the market closed, Pan American Silver failed to meet analysts' top- and bottom-line estimates, to the chagrin of investors.
As of 11:02 a.m. ET on Thursday, shares are down 13.3%.
Pan American Silver operates several mines in North and Central America, but it's the Dolores mine in Mexico that is under investors' scrutiny today. Escalating costs during the second quarter at Dolores led the company to suspend operations, leading management to record a pre-tax impairment charge of $99.1 million, and $62.8 million in inventory adjustments.
These charges were the primary factors behind the company reporting a net loss of $0.83 per share, drastically worse than the $0.38 loss per share that analysts had been expecting.
It isn't only the income statement that's troubling investors. Pan American Silver reported operational cash flow of $20.8 million for the second quarter, representing a steep drop from the $87.1 million in cash from operations during the same period last year.
Besides the recent quarter, investors also are likely concerned about management's revised forecast for gold production expenses in 2022. Previously, management had projected all-in sustaining costs (AISC) per gold ounce of $1,240 to $1,365. Due to the lower production at Dolores as well as other factors, management now expects AISC to fall between $1,450 and $1,550 per gold ounce with 2022 gold production of 550,000 ounces to 605,000 ounces.
Clearly, the disappointing developments at Dolores are detracting from the luster of Pan American Silver's stock today. And it seems warranted. Fortunately for those interested in precious-metals stocks, there are plenty of other gold and silver stocks to consider.