Warm - did new thread since old is hard to navigate. I like to look on annual basis, to smooth swings. Remember production in a qtr is not equal to sales in a qtr. I noted that you did not back out the $18mm impairment charge when doing your calculations. (There may well be more impairments - Navidad, or even Minefinders, but I exclude them as they are non cash sunk costs).
On an annual basis 25mm oz X $23 (current price just cuz) is $575mm rev. Byproduct revs typically are ~50% of silver revs, and byproduct prices have not dropped as much as silver, so $288mm rev. Total rev of $863. Mining costs running $125-$138/qtr, most recently $128 and $125. Lets say $525 for yr. Royalties $40mm. Deprec is $120mm per yr. $863 rev less $525 mining less $120mm deprec less $40mm royalties = $178 mine oper earnings.
G&A is $20mm per yr, Explor & Prod is $40m. $178 mine oper earnings less $20mm less $40mm is $118mm pretax earnings.
Taxes vary widely. Were $24% in 2011, and 51% in 2012. Using 35% (?), net income is $77mm, or ~50 c per share. Cash flow (excl working capital) is $77+120 depr=$197. Capex is $160 this year, but maint capex is more like $120. Annual div is $76mm. So gross cash flow of $197 less capex of $160 less div of $76 is roughly a $40mm cash flow deficit.
Looking at it this way, PAAS is not bleeding cash big time on an annual basis, capex will no doubt be pared back in future yrs (they seem to want this yrs capex to go forward). PAAS can probably take a little cost out of G&A, some out of explor & prod, and I cannot assess the opportunities in mining costs, but I am sure there are some.
This is simplified, a first paas look (like that?) and all the "other" income stmt items are excluded (forex, derivatives, gain/loss, interest, etc). They can be significant, and some can go either direction.
I don’t have any big problems with your calculations; maybe, few adjustment only.
It seems to me that annual revenue would be close to $800M in the proposed scenario. Last quarter revenue was $247M and silver price was about $7/Oz higher than proposed yardstick. It reduces revenue by $40+M, not even counting decrease in sub-product prices. Also, mining cost seems to be higher; it was $145M last quarter. If these adjustments are applied then result will probably change from gain to loss.
Anyway, the common determinant is that company should reduce costs and scope of these reductions depends on both magnitude and longevity of the drop in silver price. Both factors are not known yet, in numerical ways and erring on cautious side could be reasonable. Cutting dividend is the least painful step. It doesn’t affect mining operations and it affects shareholder in the way significantly less that it is usually believed.
Needless to say that in case the whole affair of low silver prices continues for few months only then the whole discussion is not too practical and, anyway, next dividend announcement and/or cost reduction news won’t come before August, when situation will be clearer.
Not sure where you get mining costs of $145. I am looking at the qtly and production costs on the financial statement are $128. Were $125 qtr prior, $138 qtr prior to that, $113 qtr prior to that. Now if you meant $158, that would include the depreciation which I listed separately.
As to revenue, I cannot tell you the difference - I probably need to read up on what they are selling (refined goods vs concentrate vs...). From looking at the footnotes, where it shows rev by product - it differs greatly from production times realized price.
But I agree that beyond a short period, if cash flow is not sufficient, the dividend should go, and we will know more in August.