Pan American Silver's Strategic Portfolio Shift: Divesting Pico Machay to Xali Gold as Part of Broader Optimization

A Year of Strong Performance in Mining Markets

Pan American Silver Corp. PAAS has demonstrated impressive momentum in the precious metals sector. Over the past 12 months, PAAS shares have climbed 162.5%, outpacing the broader industry advance of 201.6%. This strong performance reflects investor confidence in the company’s strategic repositioning within the global silver and gold markets.

Finalizing the Pico Machay Transition

The company has recently wrapped up the transfer of its stake in Minera Calipuy S.A.C., the entity controlling the Pico Machay project, to Xali Gold Corp. The two parties had previously signed the share purchase agreement on October 23, 2025. Under the terms of this transaction, Pan American Silver received $500,000 in cash proceeds from the sale.

Located in Peru, the Pico Machay asset represents an advanced exploration-stage venture featuring an elevated-grade gold deposit with near-term production potential. The project carries historical resource estimates totaling 264,600 ounces of gold classified as Measured and Indicated resources, with an additional 446,000 ounces categorized as Inferred. For Xali Gold, this acquisition provides immediate production capability and substantial upside potential in the gold segment.

A Comprehensive Portfolio Realignment Strategy

Divesting Pico Machay aligns with Pan American Silver’s broader strategy of refining its asset base. During the third quarter of 2025, the company disposed of an 80% interest in the La Pepa project for $40 million. Earlier, in December 2024, PAAS completed the sale of its wholly-owned La Arena project, securing $306.6 million in cash proceeds from that transaction alone.

Conversely, Pan American Silver has been actively acquiring and consolidating high-quality silver assets. In early September 2025, the company finalized its previously announced acquisition of MAG Silver Corp., a transformative move that elevated its standing among global silver producers. This acquisition delivered a 44% stake in the Juanicipio project—a large-scale, high-grade silver mining operation in Zacatecas operated by Fresnillo plc. The integration has already shown tangible results, with Juanicipio contributing meaningful output during just one month of Q3 2025 operations, significantly boosting both PAAS’s silver segment performance and cash generation.

The MAG acquisition also expanded Pan American’s portfolio with full ownership of the Larder exploration property and full earn-in rights to the Deer Trail exploration initiative. These additions are expected to contribute substantially to production volumes, reserve replacement, and operational cash flow in coming periods.

Investment Rating and Peer Comparison

Pan American Silver currently maintains a Zacks Rank #1 (Strong Buy) rating. Within the basic materials and mining sector, comparable companies worth monitoring include Agnico Eagle Mines AEM, Kinross Gold Corporation KGC, and Fortuna Mining Corp. FSM.

Agnico Eagle Mines carries a Zacks Rank #1, with 2025 earnings consensus pegged at $7.77 per share—reflecting year-over-year growth of 83.6%. The company shows an average trailing four-quarter earnings surprise of 11.6% and has seen its shares surge 107.6% over the past year.

Kinross Gold Corporation also sports a Zacks Rank #1. Its 2025 earnings consensus stands at $1.67 per share, indicating 145% year-over-year growth. KGC shares have jumped 135% in the past year.

Fortuna Mining Corp. carries a Zacks Rank #2 (Buy), with 2025 earnings consensus at 76 cents per share—implying 65.2% year-over-year growth. FSM shares have surged 145.6% annually.

Originally published on Zacks Investment Research (zacks.com).

The views expressed herein are those of the author and do not necessarily reflect the opinions of Nasdaq, Inc.