Pan American Silver Corp. (TSX: PAAS, NASDAQ: PAA.T) first-quarter profit fell 46% as the costs of acquiring a Mexican gold and silver operation covered a revenue increase.
The Canadian company said Tuesday that during the first quarter of 2012 it produced 5.5 million ounces of silver and 19,496 ounces of gold, which represented a year-on-year increase of 3% and 5%, respectively.
The silver miner said its revenue for the quarter rose 20% to $228.8 million, while net earnings fell to $50.2 million, or 47 cents per share, which the company attributed in part to $13.8 million worth of closing costs incurred for the acquisition of Minefinders, as well as $7.2 million spent in exploration and development activities.
"We've had an excellent start to 2012 and delivered a very respectable first quarter, on all metrics. Our consolidated silver production was right in line with our forecast and our cash costs were more than 15% less than we had anticipated,” said Pan American President and CEO Geoff Burns in a press release.
"With the acquisition (of Minefinders) and most of the integration activities now complete, we are concentrating on unlocking the outstanding exploration upside and expansion potential of the Dolores mine, as well as aggressively exploring the highly prospective La Virginia property also located in Mexico."
Pan American owns and operates seven silver mines in Peru, Mexico, Argentina and Bolivia. The Company also owns the Navidad silver deposit, one of the largest undeveloped silver deposits in the world and is the operator of the La Preciosa silver project, which is a joint-venture with Orko Silver.