Image Source: Pixabay

Pan American Silver (PAAS) rocketed 11% higher yesterday, closing at a historic peak of $48.41 on no company-specific news. However, the rally mirrored broader market enthusiasm for precious metals, as silver prices themselves notched a milestone, topping $61 per troy ounce for the first time ever.

The white metal's ascent has been relentless, outpacing gold, platinum, and palladium with a staggering 105% increase in 2025. For PAAS, the momentum translates to a 139% stock surge year-to-date, making it one of the hottest names in mining.

With supply constraints tightening and demand accelerating, there's little evidence to suggest this bull run will fade anytime soon.Yet, with PAAS at record highs, is its stock still a compelling buy for the long haul?

The Silver Surge

Silver's explosive 2025 performance stems from a perfect storm of fundamentals that have transformed it from gold's overlooked sibling into a standalone powerhouse. At the core is a chronic supply deficit: global mine production is projected to dip 12% from 2020 peaks to just 820 million ounces this year, according to the World Silver Survey. Recycling efforts can't keep pace, leaving inventories at multi-year lows.

This scarcity has been amplified by massive ETF inflows and institutional buying, with investment demand soaring to a record 1.334 billion ounces, accounting for 37% of total consumption.

Silver's dual appeal – as both a monetary hedge and industrial essential – positions it for sustained gains, far eclipsing its precious metal peers.

(Click on image to enlarge)

PAAS Rides the Wave

Pan American Silver has capitalized masterfully on this silver supercycle, emerging as one of the sector's top performers. It's been driven by savvy diversification and aggressive expansion.

The pivotal 2023 acquisition of Yamana Gold – valued at $4.8 billion – marked a turning point, blending Pan American's silver dominance with Yamana's high-quality gold assets in Latin America. The deal instantly broadened its portfolio, adding prolific mines like Cerro Moro and El Penon, while slashing geopolitical risks through a footprint spanning Canada, Mexico, Peru, Bolivia, Argentina, and Chile.

While silver remains the core (over 60% of output), gold now contributes meaningfully, hedging against pure-play volatility and enhancing free cash flow – recent quarters hit records, funding a 17% dividend hike to $0.14 per share.

Pan American's M&A appetite shows no signs of waning either. Just last week, it snapped up 18.75 million units of Galleon Gold in a $11.25 million Canadian private placement, boosting its stake to nearly 30% on a partially diluted basis via warrants and a prior convertible debenture.

The move targets Galleon's promising Ontario gold projects, aligning with Pan American's strategy to build scalable, low-cost assets. Exploration updates show promising drills at multiple sites, signaling higher silver output and lower costs after its earlier MAG Silver deal.

With peers grappling with capex overruns, PAAS's operational efficiency – coupled with silver's leverage – has delivered unmatched returns, positioning it as a blue-chip bet on the rally.

Bottom Line

At $48 per share, PAAS trades at a forward P/E of around 13x – modest versus silver miners' 15x average – and yields 1% in dividends, offering value in a frothy market. With silver's deficits projected through 2030 and Pan American's diversified, acquisition-fueled pipeline, this stock remains an elite vehicle to harness the long-term bull run in silver and gold.

More By This Author:

Boeing Is Poised To Close On Spirit Aero. Is It Still A Buy?
Netflix To Buy Warner Bros For $72 Billion. Time To Sell?
Opendoor Surges Again - Is This Time For Real?