Pan American Silver (TSX:PAA) may have churned out less metal in the first quarter, but record silver prices helped the company post a 254% increase in net earnings.
The Vancouver-based silver miner, which has mines throughout Latin America, had net earnings of US$93 million in the first quarter compared with US$26 million for the same period in 2010.
Pan American produced 5.3 million ounces of silver in the first quarter, which was a 3% drop compared with last year.
Lower production figures were largely due to lower-than-expected grades at mines in Peru, Bolivia and Argentina, Pan American said.
Still, the company’s cash cost per ounce was US$7.83 (net of by-product credits) at a time when silver prices climbed toward 30-year highs.
The price per ounce of silver climbed to US$37.88 on March 31, the end of Pan American’s first quarter.
Since then, prices have climbed as high as US$49.84, though they’ve tapered off in recent weeks.
“Our hard work paid off handsomely and we were able to take advantage of robust silver prices to once again generate record net earnings and operating cash flows,” said Pan American president and CEO Geoff Burns.
The company finished the first quarter with US$397 million in cash and short-term investments.
At press time, Pan American’s shares were down 2% to $31.10.