Manager: Greetings, ladies and gentlemen, and thank you for joining us for the Pan American Silver Third Quarter 2023 Unaudited Results Webcast and Conference Call. All lines are now in listen-only mode. We will have a question-and-answer period after the presentation. [Guidelines for Operators] We are recording this conversation on Wednesday, November 8, 2023. Now, vice president of investor relations Siren Fisekci, please take over the conference. Please proceed.
Fisekci Siren: We appreciate your attendance in the Pan American Silver Q3 2023 Conference Call today. This call mentions non-GAAP measurements and contains forward-looking comments and information. Regarding our Q3 2023 unaudited results, please refer to the warnings in our MD&A, news release, and presentation slides, all of which are accessible on our website. Michael Steinmann, the president and CEO of Pan American, will now take over the call.
Steinmann Michael: Thank you for participating in our call today, Siren, and to all of you as well. Let me start by providing you with an update on our work integrating the assets we purchased on March 31st when the Yamana acquisition completed. I’m pleased to announce that we have successfully merged the four new businesses into Pan American and made progress towards restructuring the new enterprise by selling non-essential assets. In order to better support the mine operations and maintain corporate control, leadership, and systems policies and procedures, we have also reorganised the Yamana Latin American regional offices. We have done this by utilising significant synergies and business improvement potential. We are assessing several optimisations and mine life extension potential while collaborating with the new teams.
In the upcoming quarters, as we move on with comprehensive studies, near mine exploration programmes, and updates to life of mine plans, we look forward to providing more information with you on that. After this game-changing deal, we committed to rationalising our portfolio. We have made great strides towards that goal quicker than most would have predicted, and there are still plenty of chances ahead. We successfully sold our stakes in the Peruvian Morococha mine and the Argentine MARA project in Q3. Additionally, we successfully sold our stake in the Chilean Agua de la Falda project on Monday.
We sold off a few non-controlling equity stakes in Q2, most of which we inherited from Yamana. Leveraging our long-standing operating experience at San Vicente over the previous 24 years, we expanded our equity investment in New Pacific in Q3 to 11.6% of New Pacific’s outstanding common shares, helping to further advance promising silver prospects in Bolivia.
Additionally, we promised to settle certain higher interest debt that was accrued as a result of the Yamana purchase. We paid back the sums borrowed under the sustainability-linked credit facility, and as of September 30th, we had the entire $750 million available on our credit facility in addition to $832 million in working capital, which consists of $386 million in short-term assets and cash.
These notes, valued at $500 million with a 2.63% rate that matures in 2031 and $283 million with a 4.625% yield that matures in 2027, have appealing features. The primary strength of Pan American’s balance sheet is its flexibility in managing business cycles and seizing expansion opportunities.
The actions we have made to pay off debt and sell non-core assets will also drastically cut expenses in the future. We anticipate yearly financial savings of around $90 million, mostly from the removal of care maintenance, project development, and reclamation expenses related to MARA and Morococha. in addition to interest costs associated with repaying the $280 million borrowed under the credit facility by June 30, 2023.
We continue to project that the Yaman acquisition and the previous synergies would result in further savings of between $40 and $60 million annually. Lastly, keep in mind that we still have potential upside on the MARA and Agua de la Falda projects because of the precious and base metal royalties we were able to keep with our reliable counterparties on those projects.
After that, let’s discuss our third-quarter results. With lower unit operating costs and more diversity, the acquisition of the four Yamana producing mines has resulted in a notable rise in output. In Q3, we produced 244,200 ounces of gold and 5.7 million ounces of silver. For the silver section, all-in sustaining costs came to $18.19 per ounce and $1,451.
Although the majority of our mines’ operational performance met expectations, two of them encountered particular difficulties that had an impact on the Q3 results. Ventilation limitations continued to affect La Colorada in the silver class. Due of these limitations, the mine’s throughput was decreased, access to its higher grade zones was restricted, and innovative ground support techniques were needed in regions where elevated temperatures and humidity had rendered traditional ground support techniques useless.
We do not anticipate that La Colorada’s performance will improve until the new ventilation infrastructure is finished, which should happen in the middle of 2024, and we are then able to accelerate the growth of mining rates in the deep east portion of the mine. On that job, we are moving forward rather well. By the end of Q3 2023, the concrete line shaft excavation had reached a depth of 522 metres, and by the end of the year, it is anticipated to be entirely dug to a depth of 593 metres. By the middle of 2024, the installation of two sizable exhaust fans on the shaft’s surface is anticipated to be finished. When this massive primary ventilation system is put into service, the heat source in the deep eastern region work will receive the chilled fresh air that we now provide.
By doing this, we can prevent the hot air from harming our ground support systems by returning it outside of the mine. El Penon’s extracted gold grades were not as high as anticipated. We have started reviewing our mining sequence in several mine areas in order to achieve more reliable gold output, based on recent reconciliation data. We will be making adjustments to El Penon’s mine development timeline over the coming months in order to provide ourselves greater flexibility in the event that this highly variable deposit experiences unanticipated significant deficits. To lessen the grade variation of risk that we are now experiencing, the delineation drilling technique has been evaluated. El Penon, with its outstanding exploration potential and surplus mill, continues to be one of our core assets.
We are reiterating our annual 2023 projection ranges for silver and gold production, with the expectation that both will come in at the low end of the ranges, given year-to-date output and our estimate for the next two months. As of 2023, we anticipate that the cash expenses and all-in sustaining costs for the gold segment will fall within our guideline ranges. Due in large part to the ventilation restrictions at La Colorada, which I previously mentioned, and the two-week extension of operations at that mine in early October to address security concerns, as previously disclosed, we expect silver segment cash costs and all-in sustaining costs to be slightly above our guidance range.
In the third quarter, we declared a net loss of $22.7 million, or a basic loss of $0.06 per share. The adjusted profits per share came to $3.1 million. $114.6 million was the operating cash flow after taxes of $35.8 million were paid. In total, we will have paid out $130.5 million in dividends this year, including the $0.10 cash dividend per common share that we announced yesterday. With regard to the La Colorada Skarn project, we want to publish the preliminary economic research before the end of the year. Given the size and geometry of the sizable polymetallic deposit that contains silver, the research will be centred around the use of a sublevel caving mining technique, which we feel offers greater economic benefits.
Q3 saw the continuation of the ILO 169 consultation process at the Escobal mine in Guatemala. Pan American has already arranged three mine visits for representatives from shrink and digital, together with their advisors, and several other discussions. Working discussions involving representatives of Xinka and the Ministry of Energy and Mines, or MEM, in Guatemala were part of this. I’m aware that a lot of people visit MEM’s website to look up the Escobal consultation, which offers incredibly detailed information on the procedure. I mentioned that MEM wanted the consultation finished by the end of October.
Even if the deadline was missed, everyone involved in the consultation process is still calm, thorough, open, and done in good faith. The next consultation meeting is set for November 10th, and as is customary, we are not offering an estimated time period for the consultation’s conclusion or a possible mining reopening.
As the other consultation process proceeds, we also keep up with Escobal’s care maintenance. My congratulations go out to the Pan American team in Guatemala for winning first prize in the environment category from the Chamber of Industry in Guatemala. The team worked on a project that involved conservation and reformation.
The main goal of the project is to restore forest areas on the mine site and turn them into significant habitats for flora and animals. It entails an inventive method of reproducing oak trees within the Escobal mining area. We often broadcast updates on some of our company’s projects and events on Pan American’s LinkedIn page, where you may watch the video to learn more about this.