Pan American Silver Corp. (PAAS): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear map of the risks and opportunities facing Pan American Silver Corp. (PAAS) right now, and honestly, the PESTLE framework is the best way to cut through the noise. We need to focus on what drives their cash flow, which is always a mix of metal prices and operational stability in Latin America. Right now, silver is trading near $28.50 per ounce, which is great, but their All-in Sustaining Costs (AISC) are creeping up toward $16.00 per ounce, meaning that profit margin is defintely the core battleground. That margin is the sweet spot, but political instability, resource nationalism, and the ever-present demand for a social license to operate (SLTO) could erase it fast, so let's break down the Political, Economic, Social, Technological, Legal, and Environmental forces shaping PAAS's future and see where the real action is.

Pan American Silver Corp. (PAAS) - PESTLE Analysis: Political factors

You're operating in a sector where political risk isn't a theoretical concept; it directly impacts your reserves, your cash flow, and your $240 million - $260 million expected cash tax bill for 2025. Pan American Silver (PAAS) is deeply exposed, with 45% of its 2024 revenue coming from Peru and Mexico alone. The regulatory environment in key Latin American jurisdictions is shifting toward resource nationalism and stricter control, forcing a constant re-evaluation of long-term capital allocation.

This is a high-stakes game where policy changes can instantly devalue a mine plan. Your strategy must reflect this near-term political volatility, especially in your core operating regions.

Resource nationalism and tax hikes in Peru and Mexico are a constant threat

The specter of resource nationalism-where governments seek greater control or a larger share of mineral wealth-is a persistent headwind in Peru and Mexico. In Peru, the debate centers on a potential 'use-it-or-lose-it' policy for mining concessions, which threatens the long-term tenure security PAAS relies on for its projects. This pressure is fueled partly by the estimated $12 billion in illegal gold mining exports for 2025, which the government is trying to address through reform.

Peru's mining sector is crucial, contributing 15-20% of its GDP and generating over $4 billion in annual government tax revenue. Any move to significantly hike taxes, a proposal that has been repeatedly floated, would directly hit PAAS, which derived 22% of its FY 2024 revenue from the country. In Mexico, the risk is less about taxation right now and more about state control over future development.

Changes in mining concession laws create permitting uncertainty

Mexico, the world's largest silver producer, has fundamentally changed the rules of the game. In June 2025, President Claudia Sheinbaum announced a moratorium on all new mining concessions, effectively halting future exploration and development outside of existing claims. This policy continues the restrictive stance from the previous administration, and while existing operations like PAAS's continue, they face significantly increased environmental scrutiny.

The 2023 amendments to the Mining Law already shortened the maximum concession duration from 50 years to a less certain 30 years, with only a single 25-year renewal possible. For PAAS, which generated 14% of its 2024 revenue from Mexico, this regulatory uncertainty complicates long-term planning and capital investment, especially for projects with multi-decade timelines.

• New Mexican concessions: Zero approved since June 2025.
• Concession duration: Reduced from 50 years to 30 years.
• PAAS Q1 2025 Silver Production: 5.0 million ounces globally.

Geopolitical risk from US-China trade tensions impacts commodity demand

The escalating trade tensions between the US and China create a double-edged sword for silver prices. On one hand, silver benefits from its safe-haven status during geopolitical instability. For example, renewed tariff threats in October 2025 helped push silver prices to an all-time high of $54.85 per ounce. This safe-haven demand drove net inflows into silver-backed Exchange-Traded Products (ETPs) of 95 million ounces in the first half of 2025, already surpassing the full-year 2024 total.

But silver is also an industrial metal, with roughly 30% of its use in electronics and 5G infrastructure, sectors directly impacted by US-China tariffs. Industrial demand is forecast to decline by 2% in 2025 due to global economic uncertainty from these tariff policies. So, while safe-haven flows boost the price, industrial slowdowns create a ceiling on that growth. It's a classic tug-of-war.

Government stability in key operating nations like Argentina is defintely a factor

Argentina, which accounted for 9% of PAAS's 2024 revenue, presents a unique political risk profile. The current administration has signaled a strong pro-mining investment climate through policies like the Regime for the Incentivization of Large Investments (RIGI) and the elimination of export duties. This policy shift is critical, especially as PAAS's Cerro Moro mine experienced reduced silver production in 2024 due to lower-grade ores, making a favorable operating environment paramount for future profitability.

Still, political uncertainty remains high ahead of the October 26, 2025, midterm elections. This instability is already holding back new investment decisions in the mining sector, despite the fact that Argentina's total mining exports are projected to reach a record $5.09 billion in 2025, a 14% increase over 2024. The continuity of the pro-mining reforms is far from guaranteed, and any policy reversal could immediately impact the economics of the Cerro Moro operation.

Here's the quick math on PAAS's exposure to these key political jurisdictions:

Action: Finance: Draft a sensitivity analysis modeling a 15% royalty/tax increase in Peru and a 10% delay in Mexican permitting for 2026 growth projects by year-end.

Pan American Silver Corp. (PAAS) - PESTLE Analysis: Economic factors

Silver price volatility is the primary revenue driver, currently trading near $\mathbf{\$28.50}$ per ounce.

The price of silver is the single biggest factor determining Pan American Silver Corp.'s (PAAS) top-line revenue and, ultimately, its profit margins. Right now, the market is pricing silver near $\mathbf{\$28.50}$ per ounce, a level that provides a healthy margin over production costs.

This $\mathbf{\$28.50}$ price is a double-edged sword: it's great for immediate cash flow, but it also increases the risk of a sharp correction. Silver's dual role-as a monetary metal like gold and an industrial metal used in solar panels and electronics-makes its price movements highly complex. You need to watch the investment flows into silver-backed Exchange Traded Funds (ETFs) just as closely as you track manufacturing Purchasing Managers' Indices (PMIs).

Here's the quick math: a $\mathbf{\$1.00}$ change in the average realized silver price can swing PAAS's annual revenue by tens of millions of dollars, given their expected production volume.

Inflationary pressure on All-in Sustaining Costs (AISC) remains high, potentially hitting $\mathbf{\$16.00}$ per ounce for silver in 2025.

The biggest near-term risk to PAAS's margins is cost inflation. All-in Sustaining Costs (AISC) is the key metric here; it covers all the cash costs of mining, plus the capital expenditures needed to keep the mine running. We project PAAS's consolidated silver AISC could hit $\mathbf{\$16.00}$ per ounce in the 2025 fiscal year.

This $\mathbf{\$16.00}$ AISC figure is up significantly from historical averages and reflects persistent global supply chain issues and rising input costs. The primary drivers are energy, labor, and key consumables like cyanide and explosives. For example, diesel fuel costs, a major component of mining, have remained stubbornly high. Plus, finding and keeping skilled labor in remote mining locations across Latin America requires higher wage packages.

A $\mathbf{\$28.50}$ silver price against a $\mathbf{\$16.00}$ AISC still leaves a strong operating margin of $\mathbf{\$12.50}$ per ounce, but any further cost creep erodes that buffer quickly.

Strong US dollar typically pressures commodity prices, but acts as a hedge against local operating costs.

The US Dollar Index (DXY) strength is a critical macro factor. Generally, a stronger US dollar makes dollar-denominated commodities, like silver, more expensive for buyers holding other currencies, which tends to depress the silver price. However, for PAAS, which has significant operations in countries like Peru, Mexico, and Argentina, a strong US dollar provides a natural hedge.

The company incurs a substantial portion of its operating costs-labor, local supplies, and local taxes-in local currencies (e.g., Peruvian Sol, Mexican Peso). When PAAS converts its US dollar revenue to pay these local costs, a stronger dollar means fewer dollars are needed. This currency effect can effectively lower the reported AISC in US dollar terms, offsetting some of the inflationary pressure.

Global interest rate policy directly influences capital expenditure financing costs.

Central bank policy, particularly the Federal Reserve's stance, sets the global cost of capital. With the Fed keeping the benchmark rate elevated through much of 2025 to tame inflation, the cost of borrowing for PAAS is higher.

This directly impacts the economics of large, multi-year capital expenditure (CapEx) projects, such as the expansion of the La Colorada Skarn project. A higher weighted average cost of capital (WACC) means the hurdle rate for new projects increases, making marginal projects unviable. For example, a $\mathbf{100}$ basis point increase in borrowing costs can add millions to the financing expense of a $\mathbf{\$200}$ million project, delaying or even canceling the investment.

Recession fears could dampen industrial silver demand, but boost gold's safe-haven appeal.

The ongoing fear of a global economic slowdown or a mild recession in key markets like the US and Europe presents a mixed bag for PAAS. About $\mathbf{50\%}$ of global silver demand is industrial, heavily tied to electronics, photovoltaics (solar), and brazing alloys.

• Industrial Demand: A recession would slow manufacturing, defintely dampening industrial silver demand and pressuring the $\mathbf{\$28.50}$ price.
• Gold Hedge: PAAS also produces significant gold (e.g., from the La Colorada and Dolores mines). Recession fears typically drive investors toward safe-haven assets, boosting gold's price.
• Portfolio Effect: PAAS benefits from this flight-to-safety because its revenue base is diversified across both silver and gold, stabilizing overall cash flow during economic uncertainty.

The net effect is that while a downturn hurts the silver side, the gold side acts as a crucial counter-cyclical stabilizer for the company's financial health.

Pan American Silver Corp. (PAAS) - PESTLE Analysis: Social factors

Securing and maintaining a social license to operate (SLTO) is critical for mine expansion.

The Social License to Operate (SLTO), which is the ongoing acceptance of a company's operations by local communities, remains a primary non-financial risk for Pan American Silver Corp. The company's operations span the Americas, including jurisdictions like Peru, Mexico, and Argentina, where community relations are often complex and dynamic. Losing this license can halt production, which is a direct hit to cash flow.

The most significant, long-term SLTO challenge is the Escobal mine in Guatemala, which is a high-grade asset currently not operating. The mine remains subject to a court-mandated International Labour Organization (ILO) 169 consultation process with the Xinka Indigenous Parliament. This process, which is designed to ensure free, prior, and informed consent, continues to be a major factor in the asset's indefinite delay, effectively sidelining a key growth opportunity.

To mitigate this systemic risk, Pan American Silver is increasing its direct investment in host communities. In the 2024 fiscal year (the latest full-year reported data released in May 2025), the Company contributed US$20.3 million to local communities, focusing on health, education, and economic development programs.

Community opposition to mining projects often leads to operational delays.

While the Escobal mine represents the most severe, long-term operational delay due to social factors, the ongoing risk of localized community opposition affecting active mines is a constant near-term threat. These disruptions, often manifesting as road blockades or protests, can immediately impact production and increase All-in Sustaining Costs (AISC).

For instance, while there were no major, publicly-disclosed community-related disruptions reported in the third quarter of 2025, the company must continually manage local expectations at sites like La Colorada in Mexico and Huaron in Peru. The strategy is to move beyond mere compliance to genuine partnership, but honestly, even minor local disputes can quickly escalate into a material financial event.

The company's commitment to community engagement is a direct cost of doing business in these regions. Here's the quick math on their recent social investment:

Labor relations and collective bargaining agreements impact operating costs and stability.

Labor stability is a key cost driver, especially in the mining sector where collective bargaining agreements (CBAs) are common. Pan American Silver employs a large workforce across multiple countries, each with distinct labor laws and union dynamics. The total number of employees and contractors across all operations was 16,806 in 2024.

The company manages labor risk through site-level union agreements, which are crucial for maintaining operational continuity and setting predictable labor costs. Any failure to renew or negotiate a CBA could lead to a strike, causing a sudden spike in costs and a drop in production. This is why the company's human capital management focuses on retention and development.

• Site-level union agreements: Used to improve safety standards and working conditions.
• Workforce size: 16,806 employees and contractors (2024).
• Safety performance: 1.1 million hours of health and safety training completed in 2024.

Focus on local employment and infrastructure development is key to maintaining community support.

A primary way to convert a skeptical community into a supportive partner is through tangible local economic benefits, specifically employment and infrastructure. The company's goal is to maximize the socio-economic contribution from its operations. While the exact percentage of local hires from immediate communities isn't universally disclosed, the focus on human capital development is clear.

The company is defintely trying to build a pipeline of local talent. For example, women accounted for 23% of hires in approved and budgeted vacant positions in 2024, showing a push for diversity that also addresses local community inclusion. Plus, the 2025 outlook includes expanding educational and infrastructure programs, particularly to focus on water use and efficiency in water-scarce regions, which is a direct response to a major local concern. This shift from simple cash handouts to building sustainable infrastructure is a smart long-term strategy for SLTO. The goal for 2025 is to select, develop, and retain a target of 45 qualified and diverse professionals through the 'Future PAAS' program across all jurisdictions. That's a clear, actionable metric.

Next step: Operations team should audit the local content procurement percentage at the Cerro Moro mine by the end of Q4 2025.

Pan American Silver Corp. (PAAS) - PESTLE Analysis: Technological factors

Technology is a critical lever for Pan American Silver Corp., directly influencing safety, cost structure, and resource longevity. The company is actively investing in automation and cleaner energy to counter rising operational complexity and inflationary pressures. The focus for fiscal year 2025 is on realizing the efficiency gains from recent infrastructure projects and integrating new, high-margin assets like Juanicipio, which immediately lowers the consolidated All-in Sustaining Cost (AISC).

Adoption of automation and remote monitoring improves safety and reduces operating costs by up to 15% in some sites.

You can't cut costs in deep underground mines without embracing smart technology; it's a simple trade-off of capital expenditure for long-term operational savings and improved safety. Pan American Silver is currently conducting a comprehensive study at its Jacobina mine in Brazil to evaluate opportunities for long-term economic optimization. This includes potential productivity improvements like automating ore handling systems and streamlining the process flowsheet.

This targeted automation is expected to lead to reduced unit operating costs, a crucial factor when the company's Silver Segment All-in Sustaining Costs (AISC) for Q1 2025 were $13.94 per silver ounce. The successful implementation of new ventilation infrastructure at the La Colorada mine in Mexico is already demonstrating the benefit, enabling higher development rates and throughput of up to 2,000 tons per day (tpd). For the full year 2025, the company's revised Silver Segment AISC guidance is between $14.50 and $16.00 per ounce, reflecting the immediate, cost-reducing impact of the high-margin Juanicipio acquisition. Honestly, a successful automation rollout at Jacobina could deliver the anticipated cost reduction of up to 15% on certain operational metrics, defintely helping to hit the lower end of that AISC guidance.

• Safety Initiative: The company continues to implement the "Doing Safety Differently" program, encouraging a bottom-up learning approach to identify and mitigate high-potential incidents.
• Infrastructure Investment: A new, fully operational paste backfill plant at the Bell Creek mine (Timmins operation) provides enhanced ground stability and increased mineral resource recovery.

Advanced exploration techniques, like deep-sensing geophysics, extend mine life.

The core of a mining company's value is its mineral reserve base, and advanced exploration technology is the only way to replace mined ounces. Pan American Silver's exploration success in the 2025 fiscal year has been significant. For example, the exploration program at La Colorada more than replaced production and added 52.7 million ounces of silver to the inferred mineral resource category as of June 30, 2025, primarily in newly discovered high-grade silver zones.

This kind of success is driven by modern, data-intensive methods. While the company reports using extensive diamond drilling-completing 47,883 meters at La Colorada alone between May and October 2024-the targeting of that drilling relies on advanced geophysical techniques (like deep-sensing geophysics, which uses seismic or electromagnetic waves to map subsurface geology) to identify deep, blind ore bodies. The result is a robust, long-term reserve base:

Here's the quick math: the addition of 52.7 million ounces of silver at La Colorada in the inferred category alone provides a strong pipeline for future reserve conversion, securing the mine's long-term future.

Transition to cleaner energy sources (e.g., solar) at mines reduces carbon footprint and long-term power costs.

The shift to cleaner energy is a clear opportunity to manage long-term power costs, which are notorious for volatility, plus it dramatically improves the environmental, social, and governance (ESG) profile. Pan American Silver is making concrete progress in this area. The most significant near-term action is the long-term clean energy Power Purchase Agreement (PPA) for the El Peñon operation in Chile. This PPA, once fully implemented in 2025, will transition the entire operation to 100% clean, renewable energy.

This single move is projected to reduce the company's total annual carbon footprint by approximately 25,225 tonnes of CO2Eq/year. The company has also surpassed its annual greenhouse gas (GHG) emissions reduction target, keeping it on track to reduce its global Scope 1 and 2 GHG emissions by at least 30% by 2030. Also, management is advancing the procurement of similar renewable energy PPAs for the Minera Florida, Jacobina, Huaron, and Shahuindo operations, showing a clear, company-wide strategy.

Digital twin technology is starting to optimize processing plant efficiency.

The concept of a digital twin technology (virtual process modeling) is essentially creating a real-time, computer-simulated replica of a physical asset, like a processing plant, to test changes before they go live. While Pan American Silver has not explicitly named a commercial 'digital twin' system, their current focus on 'streamlining the process flowsheet' at Jacobina is the exact goal of this technology. The global digital twin market is predicted to grow to $21.14 billion in 2025, indicating that this kind of virtual modeling is becoming standard practice in heavy industry.

By using real-time data from sensors (Internet of Things or IoT) to model and simulate the crushing, grinding, and flotation circuits, Pan American Silver can optimize throughput and metal recovery. Industry data shows that implementing digital twin technology can lead to up to a 20% reduction in unexpected work stoppages by enabling predictive maintenance. This capability is vital for maximizing the efficiency of high-throughput operations like the recently acquired Juanicipio mine, which is expected to increase the company's silver production by roughly 35% on an annualized basis.

Next Step: Operations team to provide an update on the Jacobina optimization study, specifically detailing the expected throughput increase and unit cost reduction from the automated ore handling system, by the next quarterly review.

Pan American Silver Corp. (PAAS) - PESTLE Analysis: Legal factors

Strict adherence to evolving anti-corruption laws (FCPA) across Latin American jurisdictions is mandatory.

You need to understand that operating in Latin America, where Pan American Silver has its core assets, means navigating a complex and shifting anti-corruption landscape. As a company with shares registered in the U.S., Pan American Silver is strictly subject to the Foreign Corrupt Practices Act (FCPA), which prohibits bribery of foreign officials, plus the Canadian Corruption of Foreign Public Officials Act (CFPOA). These laws require a robust, defintely expensive, compliance program.

The near-term risk picture changed in February 2025 when a U.S. executive order temporarily suspended FCPA enforcement for at least six months. While Pan American Silver's own Global Anti-Corruption Policy remains in force, this pause creates a material risk for the region as a whole. Reduced U.S. deterrence may lead to a resurgent bribery environment, increasing the compliance burden and the risk of local officials or third-party intermediaries-known as gestores-soliciting illicit payments. Your compliance framework must remain fully funded and active.

Mine closure and reclamation bonding requirements are becoming more stringent, increasing future liabilities.

Regulators across the Americas are demanding more stringent financial guarantees for mine closure, pushing up the company's Asset Retirement Obligation (ARO) (the legal liability for decommissioning and reclaiming mine sites). This is a non-cash liability now, but it represents a significant future cash outflow that needs to be backed by bonding or other financial assurance.

Here's the quick math on the current liability, based on Pan American Silver's first quarter 2025 financial reporting. The total provision is substantial, reflecting the long-term nature and scale of the environmental commitment.

To meet these evolving requirements, Pan American Silver has concrete operational goals for 2025. For example, the company plans to complete 29 hectares of remediation and revegetation at the Alamo Dorado and Dolores mines alone, plus rehabilitate another 35 hectares across all operations. This ongoing work demonstrates the tangible cost of maintaining compliance and reducing the final closure burden. It's a continuous investment.

New water usage and discharge regulations require significant capital investment in treatment facilities.

Water is a critical, and increasingly regulated, resource in all operating jurisdictions. New regulations are forcing miners to invest heavily in closed-loop systems and advanced water treatment to meet stricter discharge quality standards and reduce total consumption. This directly impacts sustaining capital expenditure.

The company's focus is on operational efficiency to mitigate regulatory risk. A key 2025 environmental goal is to reduce water withdrawn for use by 108,500 m³, which represents approximately 0.8% of the projected 2025 base case. This reduction is driven by capital projects, such as the new filter tailings storage facility completed at the Huaron mine in Peru in 2024, which became fully operational in 2025, enhancing environmental performance and capacity.

• Reduce water withdrawal by 108,500 m³ in 2025.
• Capital investment focuses on dry stack tailings technology to lower water usage and long-term liability.
• Ongoing compliance requires a portion of the total 2025 Sustaining Capital (which totaled $60.4 million in Q2 2025 alone) to be allocated to water infrastructure upgrades.

Changes to mineral royalty structures directly impact net operating income.

The political environment in key jurisdictions, particularly Peru, is characterized by persistent legislative proposals aimed at increasing the state's share of mining revenue, which directly impacts your net operating income. Royalty payments are a direct component of the 'Production costs and royalties' line item that determines mine operating earnings.

In 2025, the Peruvian Congress continues to debate significant mining concession reforms, including potential 'use-it-or-lose-it' provisions that could force development or revocation of concessions. Analysts warn that such regulatory instability could reduce foreign investment in the Peruvian mining sector by 30-50%. Plus, the Escobal mine in Guatemala remains non-operational pending the conclusion of the court-mandated ILO 169 consultation process with the indigenous Xinka community-a major legal risk that has deferred a significant source of silver revenue for years. The legal process is the bottleneck.

Pan American Silver Corp. (PAAS) - PESTLE Analysis: Environmental factors

Water management and tailings storage facility (TSF) safety are under intense regulatory and public scrutiny.

Water stewardship is a critical operational and social risk for Pan American Silver Corp., especially in water-stressed regions like Peru and Mexico. You are seeing the direct costs of this scrutiny in capital expenditure and operational targets. For the 2025 fiscal year, the company has set a goal to implement projects that reduce the volume of water withdrawn for use by 108,500 m³, which is approximately 0.8% of the 2025 projected base case.

Tailings Storage Facility (TSF) safety is another non-negotiable area. PAAS manages this risk through a formal Tailings Management Framework, which requires regular third-party Dam Safety Reviews (DSRs) and an Independent Review Board (IRB) for high-consequence facilities like the one at the Jacobina mine in Brazil.

A major operational de-risking move was the completion of a new filter tailings storage facility at the Huaron mine in Peru in 2024. This technology filters the water out of the tailings, creating a safer, drier stack, which significantly reduces the risk of catastrophic failure and increases water recycling rates. It's smart engineering, and it's defintely necessary for maintaining their social license to operate.

Carbon emission reduction targets are being set for the entire mining fleet.

The global shift toward decarbonization is forcing miners to set hard targets, and PAAS is no exception. Their long-term commitment is to reduce global Scope 1 and Scope 2 Greenhouse Gas (GHG) emissions by at least 30% by 2030, benchmarked against their updated 2019 baseline. This isn't just about compliance; it's about securing future capital, as investors increasingly favor companies with a clear path to net-zero. For 2025, the near-term goal is to implement projects that reduce GHG emissions by 27,500 tCO₂Eq, representing approximately 8.3% of the 2025 base case.

Here's the quick math on their near-term environmental goals for the 2025 fiscal year:

Biodiversity protection mandates near mine sites increase operational complexity.

Operating in biodiverse regions like the Americas means environmental mandates-especially around land use and species protection-are a constant source of operational complexity and potential delays. The company commits to avoiding exploration or development in internationally designated protected areas, but the regulatory landscape is tightening, particularly in Mexico.

The new administration in Mexico announced a halt on all new mining concessions in June 2025 and initiated proceedings in October 2025 to cancel 805 mining concessions located within Protected Natural Areas (PNAs). While PAAS's existing operations like La Colorada are established, this policy creates a challenging environment for any future expansion or new project permitting. The Peruvian government is also mobilizing USD $500 million for biodiversity conservation by 2027, signaling a strong regulatory focus on ecosystem services.

PAAS's proactive measures include:

• Completing 29 hectares of remediation and revegetation at Alamo Dorado and Dolores in 2025.
• Rehabilitating a total of 35 hectares across all operations in 2025.
• The Huaron mine signing a cooperation agreement for biodiversity preservation at the Huayllay National Sanctuary.

Increasing extreme weather events (e.g., heavy rains) pose a risk to open-pit operations and infrastructure.

Climate change isn't a long-term theoretical risk; it's a near-term operational reality that affects production guidance. PAAS explicitly lists 'extreme weather events, resource shortages, changes in rainfall and in storm patterns and intensities' as inherent risks. This risk materialized early in 2025: in March 2025, extreme weather events temporarily blocked mine accesses at one or more operations.

This disruption contributed to the Gold Segment All-in Sustaining Costs (AISC) rising to $2,124 per ounce in Q1 2025, which was $109 per ounce higher than the prior year's quarter. That's a direct, measurable financial impact from a physical climate risk. The company must invest more in climate-resilient infrastructure, like enhanced water storage capacity and improved access roads, to buffer against these increasingly frequent and severe weather swings. You need to price this volatility into your valuation models.

What this estimate hides is the impact of a single, major operational disruption, like a week-long labor strike or a sudden government policy shift. Still, the core action remains: PAAS needs to keep costs below that $16.00 AISC level while aggressively managing political risk.

Next Step: Finance: Model the impact of a 10% royalty increase in Peru and Mexico on 2026 Free Cash Flow by month-end.