Pan American Silver Price-Cost Spread Hits Record High of $51.12 per Ounce

Pan American Silver Corp., which operates in silver, gold, and base metals production, has seen its price-cost spread reach $51.12 per ounce due to the surge in silver prices. The spot silver hit a record of $68.92 on Friday, with Pan American reporting a second-quarter Silver Segment AISC of $17.80 per ounce.

The math is straightforward: $68.92 minus $17.80 equals $51.12, which represents operating leverage before accounting for corporate expenses, tax, royalties, and sales schedules. This spread is not an accounting profit but provides a practical indication of the company's financial health.

Pan American forecasts attributable silver output of 25 million to 27 million ounces for the year. Each $1 change in the realized silver price equates to about $25 million to $27 million in annual revenue sensitivity, prior to any adjustments.