Will La Colorada Mine Strengthen PAAS’ Long-Term Growth?
Pan American Silver Corp. PAAS invested $20 million of project capital in the first half of 2026 to advance its La Colorada Skarn project in Mexico. The company plans to build a 15,000-ton-per-day selective flotation facility to process ore from both the existing La Colorada vein mine and the high-grade zones of the skarn deposit.
Pan American Silver aims to combine the mine plans and infrastructure of the La Colorada vein mine with the Skarn project through a phased development approach. With this approach, the company can focus on high-grade, low-tonnage and less capital-intensive initial stages while targeting lower-grade material in a future expansion. During the second quarter of 2026, Pan American Silver completed the first cut of the 588 Decline, a project that serves as a crucial step toward the development of the La Colorada Skarn project.
According to the Revised Preliminary Economic Assessment, the La Colorada Skarn Project outlines a large-scale, long-life operation at negative all-in sustaining costs with a projected mine life of 37 years. During the first five years of ramp-up, the project is expected to generate a free cash flow of $653 million per year.
Pan American Silver plans to continue mining at the existing La Colorada vein mine using the current infrastructure while development progresses to access new high-grade veins in the eastern Candelaria area and high-grade skarn deposit mineralization. La Colorada has the potential to become one of the top-producing silver mines in the world. The Expanded La Colorada mine production is expected to average 19.1 million ounces of silver annually over the initial five-year period (2034-2038) following commissioning and ramp-up.
This projected output for the initial five-year average is expected to significantly surpass the annual production of other major global silver mines. For comparison, La Colorada’s expected production will surpass Pan American’s 44% owned Juanicipio mine, which produced 17.2 million ounces in 2025. It also has the potential to exceed the 13.8 million ounces produced by Fresnillo plc‘s FNLPF Saucito mine, as well as the 11.1 million ounces from Buenaventura Mining‘s BVN Uchucchacua mine.
Fresnillo produced 22 million ounces of silver in the first half of 2026, marking a year-over-year decline of 11.4%. Fresnillo’s Saucito mine faced the brunt of lower ore grade and decreased volume of ore processed during the time frame. The mine produced 6.2 million ounces of silver during the first half.
Buenaventura Mining produced 7,520,650 ounces of silver during the first half of 2026, up 2% year over year. Buenaventura Mining’s Uchucchacua mine produced 1,122,003 ounces of silver during the time frame. The mine gained due to higher-than-anticipated ore grades.
