PAAS vs. HL: Which Silver Mining Stock is the Better Buy Now?

Amid surging silver and gold prices, Pan American Silver (PAAS) reported strong Q2 2025 results and is poised to boost production and lower costs via its pending $2.1 billion acquisition of MAG Silver, despite ongoing uncertainty surrounding its Escobal mine. However, Hecla Mining (HL) is highlighted as the more compelling investment, demonstrating superior share price performance, record Q2 revenues and earnings, and notably low All-in Sustaining Costs, justifying its premium valuation and reflecting robust operational strength and consistent earnings momentum.

Analysis

In a highly favorable environment for precious metals, with silver and gold prices up 35% and 28.5% year-to-date respectively, both Pan American Silver (PAAS) and Hecla Mining (HL) have delivered strong financial results. Pan American reported an 18% year-over-year revenue increase to $812 million and a 291% jump in adjusted EPS for Q2, supported by a pending $2.1 billion acquisition of MAG Silver which promises to add 58 million ounces of silver reserves and lower its cost base. However, PAAS faces headwinds from a higher Q2 All-in Sustaining Cost (AISC) of $19.69 per ounce and significant operational uncertainty from its suspended Escobal mine. In contrast, Hecla Mining demonstrated superior operational efficiency with a remarkably low Q2 AISC of $5.19 per ounce, contributing to record revenue of $304 million (+24% YoY) and a 300% surge in earnings per share. HL's stock has also outperformed, gaining 54.7% over the past three months compared to PAAS's 35.2%. While Hecla trades at a premium forward price-to-sales multiple of 4.48x versus Pan American's 3.38x, its robust fundamentals, lower cost profile, and stronger earnings momentum are presented as justification for this valuation.

Key Decisions for Investors

• Investors should recognize Hecla Mining's superior operational efficiency, evidenced by its Q2 AISC of $5.19/oz and stronger 3-month share price appreciation of 54.7%, which supports the view that it is the more compelling investment despite its premium valuation.
• For Pan American Silver, the primary catalyst to monitor is the successful closure and integration of the MAG Silver acquisition, as its potential to lower the company's cost structure is critical to offsetting the ongoing risk from the suspended Escobal mine.
• While Hecla Mining's fundamentals appear stronger, its premium valuation requires that its low-cost production and execution continue to justify the multiple relative to peers.
• Given both companies' high leverage to commodity prices, any investment should be aligned with a conviction that the current bullish macro trends for silver and gold will persist.