Pan American Silver Reports Record Q2 FCF: More Upside Ahead?

Pan American Silver Corp. PAAS delivered a record free cash flow of $233 million in the second quarter of 2025, representing a 128% jump from the year-ago period. The company also closed the quarter with a record cash balance of $1.1 billion, reinforcing its strong financial footing. This performance follows Pan American Silver’s record free cash flow of $445 million in 2024, which marked a 175% year-over-year increase.

The company has so far returned approximately $103.5 million to shareholders as share repurchases during the first half of 2025, underlining its commitment to capital returns. PAAS also announced a 20% increase in its quarterly dividend payment to $0.12 per common share.

Pan American Silver intends to invest $500 million of its cash reserves to fund the pending acquisition of MAG Silver Corp MAG.  MAG Silver owns a 44% stake in the Juanicipio project, known as the world’s largest-scale, highest-grade and lowest-cost primary silver mine. 

The MAG Silver acquisition is expected to increase PAAS’ silver production by roughly 35% on an annualized basis and meaningfully reduce all-in sustaining costs and further boost its cash flow.

Pan American Silver’s peer, First Majestic Silver AG, also reported a record $77.9 million in free cash flow in the second quarter. This marked a significant jump from the $6.4 million in free cash flow reported by First Majestic in the second quarter of 2024.

First Majestic plans to invest this into growth capital, primarily focused on exploration and development projects.  First Majestic ended the second quarter with $384.8 million of cash.

PAAS’ Price Performance, Valuation & Estimates

Year to date, PAAS shares have gained 57%, outpacing the industry's 51% growth. In comparison, the Basic Materials sector has risen 9%, while the S&P 500 has moved up 2.9%.

PAAS is currently trading at a forward 12-month price-to-earnings multiple of 14.24X compared with the industry average of 17.34X.

The consensus mark for 2025 earnings is pegged at $1.98 per share, indicating a year-over-year surge of 150.6%. The estimate for 2026 of $2.38 indicates an increase of 20.2%.

The Zacks Consensus Estimate for Pan American Silver’s earnings for 2025 has moved up 23% over the past 60 days. The same for 2026 has moved up 26%.

PAAS stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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