Pan American Silver Corp. (PAAS): what the price assumes

In the published model solve dated 2026-Q2, anchored at $48.27, Pan American Silver Corp. (PAAS) is priced for +18.9% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/PAAS

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 6: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 11.3% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.3pp.

Reconcile: at the x-ray's 9.3% required return this reads ~6.7%/yr; the models below use their own rates.

How unusual the bet is: within-range

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.

Per-Model Detail (n=9)

Solvency

Bullet Takeaways

• The number that defines Pan American right now is all-in sustaining cost. Q1 2026 silver-segment AISC fell to $6.63 an ounce from $13.88, helped by low-cost Juanicipio ounces and by-product credits, which is what turns a rising silver price into surging cash.
• At $49.00 the price pays about 15x company-wide operating income, implying roughly 14.7% annual operating growth for five years. About half of comparable fast-growers have sustained that pace, so the bet is plausible but not conservative.
• The balance sheet is a fortress. Pan American holds about $679 million of net cash after a record $488 million of free cash flow in Q1, and management set a new framework targeting up to $1 billion of dividends and buybacks.

Bull Case

The single metric that decides Pan American today is all-in sustaining cost, because for a miner the gap between the metal price and the cost to pull it out of the ground is the entire profit. In Q1 2026 the silver-segment all-in sustaining cost collapsed to $6.63 an ounce from $13.88 a year earlier, helped by low-cost ounces from the Juanicipio mine and stronger by-product credits (Pan American Q1 2026, stocktitan). Against a silver price that has rallied hard, a sub-$7 cost base produces extraordinary margins, and the results show it: Q1 revenue rose 49% to $1,154 million and net earnings jumped to $456 million ($1.08 per share) from $169 million a year earlier. When costs fall and the metal price rises at the same time, the operating leverage is enormous.

The cash generation and balance sheet are the proof that this is real, not a paper profit. Pan American produced operating cash flow of $505 million and a record $488 million of attributable free cash flow in the quarter, ending with about $679 million of net cash (Pan American Q1 2026, Investing.com). A miner with net cash, rather than the net debt that burdens most of the sector, has the flexibility to invest through cycles and return capital, and management responded with a new shareholder-return framework targeting up to $1 billion in dividends and buybacks. The earnings-power and book-value methods that survive the screens land near or above the price (Two-Stage Excess Return $34, Residual Income $35, EV/EBITDA Relative $34, FCF Yield $27), grounding the valuation in real cash rather than commodity hope.

The growth pipeline gives the price-implied assumption something to stand on. Pan American is advancing the La Colorada Skarn project, raising 2026 project capital to $240 to $255 million after a revised study, which is the kind of organic growth that can extend the production runway (Pan American Q1 2026, stocktitan). Against a precious-metals cohort of Cameco, Kinross, Gold Fields, and Alamos, Pan American offers a diversified portfolio of silver and gold mines across the Americas with a genuinely low cost base. The price embeds about 14.7% annual operating growth for five years, a rate roughly half of comparable fast-growers have sustained; with a fortress balance sheet, falling costs, and a development pipeline, that is a bet the fundamentals can support if metal prices hold.

Bear Case

Lead with the qualitative truth the strong quarter obscures: Pan American is a commodity price-taker, and the spectacular Q1 numbers are as much about a high silver price as about the company. The price-to-fundamentals disconnect runs both ways. The $6.63 silver all-in sustaining cost looks brilliant, but it was flattered by by-product credits and the low-cost Juanicipio ramp, while the gold-segment all-in sustaining cost actually rose to $1,851 an ounce from $1,485 on higher costs and sustaining capital at several mines (Pan American Q1 2026, stocktitan). If silver retreats from its rally, the same operating leverage that produced 49% revenue growth works in reverse, and the margins compress fast.

The model's distress flags, while partly accounting artifacts, point at real fragilities. The framework gated the projection-based methods because of sustained net-income losses in prior periods, negative retained earnings, and working-capital bloat. The retained-earnings and prior-loss history reflect a company that has had hard years when metal prices were lower, which is exactly the point: this is a cyclical business whose recent profitability is not its through-cycle norm. Mining is also operationally risky in ways the financials do not capture, jurisdiction risk across multiple Latin American countries, permitting, labor, and the constant capital drain of replacing depleted reserves.

The valuation already credits a lot. At $49.00 the price embeds roughly 14.7% annual operating growth for five years, and only about half of comparable fast-growers sustained that pace; the asset-based methods say the price is expensive relative to book (Simple Excess Return $28, Graham Number $33 against the $49 price). The 2026 project-capital guidance was raised, so the company is spending more to grow, which pressures near-term free cash flow even as it extends the mine life. The reverse-DCF could not produce a reliable fair-value range here, which is a signal in itself: valuing a miner this far into a price rally is inherently imprecise. The bear case is the classic one for precious-metals equities: the quarter was a function of a high silver price meeting a temporarily low cost base, and the price is extrapolating both. If either reverts, the stock is valued for a peak that does not last.

Valuation

Pan American is a precious-metals miner valued in the middle of a strong commodity move, so the methods have to be read carefully. The framework gated several projection-based methods on distress signals (prior net-income losses, negative retained earnings, working-capital bloat) that are partly artifacts of a cyclical history rather than current solvency problems, since the company actually holds about $679 million of net cash. On the methods that anchor to book value and normalized cash, the stock looks fully valued to somewhat rich.

The inversion frames the bet. At $49.00 the market pays about 15x company-wide operating income, implying roughly 14.7% annual operating growth for five years, computed at a 10.5% cost of capital with 4% terminal growth, where each point of cost of capital moves the implied growth about 6.1 points. About 51% of comparable fast-growers sustained that pace over five years, so the priced-in assumption reads as within range but not conservative. The reverse-DCF could not solve to a reliable fair-value range, which is appropriate for a miner whose recent earnings are inflated by a silver-price rally and a temporarily low cost base. The practical read: the asset and earnings-power methods cluster in the mid-$30s, below the price, so the premium to those reflects the market extrapolating the favorable cost-and-price environment. The valuation works if silver stays elevated and the low-cost Juanicipio profile holds; it looks stretched if either the metal price or the cost base reverts toward its longer-run norm.

Catalysts

Pan American Silver reported Q1 2026 results with revenue of $1,154 million (up 49%), net earnings of $456 million ($1.08 per basic share, up from $0.47), attributable silver production of 6.44 million ounces, and attributable gold production of 169.2 thousand ounces; silver all-in sustaining cost fell to $6.63 an ounce from $13.88 while gold AISC rose to $1,851 from $1,485 (Pan American Q1 2026, stocktitan). Operating cash flow was $505 million and free cash flow a record $488 million, lifting net cash to about $679 million (Pan American Q1 2026, Investing.com).

The forward setup blends commodity exposure, growth projects, and capital return. The catalysts to watch are the silver and gold prices (the dominant driver of margins), the trajectory of all-in sustaining costs (especially whether the silver-segment sub-$7 level holds and whether gold costs stabilize), progress and capital spend on the La Colorada Skarn project (2026 project capital raised to $240 to $255 million), and execution of the new shareholder-return framework targeting up to $1 billion of dividends and buybacks. Because Pan American files as a foreign issuer on Form 6-K, watch those interim updates for production and cost data rather than US-style 10-Qs. The next quarterly print is the test of whether the low-cost, high-margin profile is durable or a function of a peak in the silver cycle.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• CDE (COEUR MINING, INC.)
• FY2025 10-K: …liabilities at the date of its financial statements, the allocation of fair value to assets and liabilities assumed in connection with business combinations, the reported amounts of revenue and expenses during the reporting period, and mined reserves. There can be no assurance that actual results will not differ from…
• FY2025 10-K: …the State of Delaware and changed its name to Coeur Mining, Inc. Coeur's corporate headquarters are in Chicago, Illinois. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Risks and uncertainties As a mining company, the revenue, profitability and future rate of growth of the Company are substantially dependent on…
• HL (HECLA MINING COMPANY)
• FY2025 10-K: …losses, respectively, as part of the line item fair value adjustments, net on our statement of consolidated operations and comprehensive income (loss). Note 4: Business Segments, Sales of Products and Significant Customers F- 13 We discover, acquire and develop mines and other mineral interests and produce and market…
• FY2025 10-K: …our debt impose restrictions on our operations. 3 PART I Item 1. Business For information regarding the organization of our business segments and our significant customers, see Note 4 of Notes to Consolidated Financial Statements. Information set forth in Items 1A and 2 below are incorporated by reference into this…
• HMY (HARMONY GOLD MINING COMPANY LIMITED)
• FY2025 20-F: …- Holistic health and wellness " on pages 141 to 153 . Mining companies face strong competition and industry consolidation The mining industry is competitive in all of its phases. We compete with other mining companies and individuals for specialised equipment, components and supplies necessary for exploration and…
• FY2025 20-F: . These factors could materially and adversely affect our financial and operating results. We compete with mining and other companies for key human resources with critical skills and our inability to retain key personnel could have an adverse e ffect on our business The risk of losing senior management or being unable…
• KGC (KINROSS GOLD CORP)
• FY2025 40-F: …report on Form 40-F, include, but are not limited to, statements with respect to our guidance for production, cost guidance, including production costs of sales, all-in sustaining cost of sales, and capital expenditures; anticipated returns of capital to shareholders, including the declaration, payment, increase and…
• FY2025 40-F: . Emerging Growth Company ☐ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to…
• GFI (Gold Fields Limited)
• FY2025 20-F: …fatalities at our operations this year. Operationally, we delivered production and cost within guidance, reflecting improved consistency and predictability across the business, supported by stronger operational discipline and enhanced performance management. At the same time, cost pressures remained elevated across…
• FY2025 20-F: …growth through Mineral Resource replacement, supported by detailed consideration of LOM capital requirements • Implementing comprehensive near-mine exploration programmes across operations, with performance monitored during quarterly reviews • Consistently replacing depleted Mineral Reserves through focused efforts,…
• NEM (NEWMONT CORPORATION)
• FY2025 10-K: …obstacles to our ability to conduct our operations and develop our projects, which may result in a material adverse impact on our business, financial position, results of operations, and growth prospects. Further, the interest rate of Newmont's $1 billion aggregate principal amount of 2.6% Sustainability-Linked…
• FY2025 10-K: …or renewing collective bargaining or certain labor agreements, workforce unionization, or demand for profit sharing; • Disadvantages of competing against companies from countries that are not subject to the rigorous laws and regulations of the U.S. or other jurisdictions, including without limitation, the U.S.…
• B (BARRICK MINING CORP)
• FY2025 40-F: …the registrant was required to submit such files). Yes x No ¨ Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act. Emerging growth company ¨ If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate…
• FY2025 40-F: …entitled "Ratings" in Exhibit 99.1) is incorporated by reference into Barrick's Registration Statements on Form F-3 (File No. 333-206417), Form S-8 (File Nos. 333-121500, 333-131715, 333-135769, 333-224560) and Form F-10 (File No. 333-287021). SIGNATURES Pursuant to the requirements of the Exchange Act, the…
• AEM (AGNICO EAGLE MINES LIMITED)
• FY2025 40-F: …are incurred by the Company; ● estimates of future capital expenditures, exploration expenditures, development expenditures and other cash needs, and expectations as to the funding thereof; ● estimated timing and conclusions of studies, analyses and evaluations undertaken by the Company or others; ● statements…
• FY2025 40-F: For a reconciliation of these measures to the most directly comparable financial information presented in the consolidated financial statements prepared in accordance with IFRS, and for an explanation of how management uses these measures and why management believes them to be useful to investors, please see the…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.