TORONTO (miningweekly.com) – Americas-focused precious metals and base metals producer Pan American Silver has reported a net loss of $5.7-million, or $0.04 a share, in the second quarter ended June, which was narrower than the loss of $187.1-million, or $1.23 a share, recorded a year earlier, when the company booked a significant impairment charge.

Excluding a $10-million charge on the value of inventories at the Dolores mine, in Mexico, along with a significantly higher income tax expense, the adjusted earnings were $1.8-million, or $0.01 a share, compared with an adjusted loss of $18.6-million, or $0.12 a share, in the year-earlier period.

The adjusted earnings missed analyst expectations of $0.03 a share on revenue of $195.91-million.

Revenues rose 14.4% year-over-year to $200.8-million, owing to higher metals sales, which were partly offset by lower prices for silver, gold and copper. The realised silver price declined 13.7% to $19.58/oz and gold was down 9.4% year-over-year to $1 289/oz. Silver and gold contributed 56% and 25%, respectively, to the company’s combined revenues.

Pan American produced 6.56-million ounces of silver in the reported quarter, up 6% from a year earlier, mainly owing to attributable output gains at all operations, except Alamo Dorado, in Mexico, and Morococha, in Peru.

Pan American produced a record 37 700 oz of gold in the quarter, 26% higher than the same period last year, and was boosted by increased output from Dolores and Manantial Espejo, in Argentina.

Zinc output rose 7% to 11 400 t, lead output was up 13% to 4 000 t and copper output rose 49% to 1 900 t in the quarter.

"We had a solid second quarter with silver production and costs as expected. I was particularly pleased to see our operations generate a cash flow of $0.32 a share, even with the average silver price the lowest it has been in the last 15 quarters," Pan American president and CEO Geoff Burns said.

Pan American reported 5.8% higher production costs an ounce of silver at $18.71 compared with $17.69 in the 2013 second quarter. The consolidated cash costs declined 0.3% over last year to $12.06/oz of silver, net of by-product credits. All-in sustaining costs (AISC) also declined 14% year-over-year to $18.23/oz in the quarter under review.

Pan American expected to spend $95.5-million on its capital growth projects this year, while project investment capital was $67-million for 2014. The La Colorada mine expansion, also in Mexico, progressed in the second quarter as planned. The Dolores leach pad 3 was scheduled to be complete by the end of this year with less than 10% of the surface area of the pad remaining to be lined.

The company had also completed a compelling preliminary economic assessment for the Dolores pulp agglomeration project, but decided to defer its construction decision to further derisk the project pending higher silver and gold prices.

Pan American confirmed its full-year guidance of 25.75-million ounces to 26.75-million ounces of silver and 155 000 oz to 165 000 oz of gold. The company also forecast AISC in the range of $17/oz to $18/oz and cash costs of $11.70/oz to $12.70/oz of silver, net of by-product credits.

Pan American’s Nasdaq-listed stock on Thursday fell more than 6% to a low of $14.28.