1 Canadian Mining Stock Down 18% That I’d Buy and Hold for the Very Long Term

Mining stocks don’t always move in a straight line. Even the strongest players in the sector can sometimes see sharp pullbacks. But for long-term investors, these dips can sometimes create opportunities to step into high-quality Canadian stocks at more reasonable valuations.

One such stock is Pan American Silver (TSX:PAAS), a top producer of silver and gold in the Americas, with operations in several countries, including Canada, Mexico, Peru, Chile, and Argentina. This Vancouver-based mining firm has continued to expand its footprint through discoveries and operational growth.

Despite being down 18.5% from its 52-week high, PAAS stock has still surged 109% over the past year. At a current share price of $77.70 and a market cap of $32.8 billion, it remains an interesting option for long-term investors.

A Canadian mining powerhouse to buy now

To put it simply, Pan American Silver stands out due to its diversified portfolio of assets. It produces both silver and gold through multiple operations across the Americas.

Its business is broadly divided into silver and gold segments, with well-known mines such as La Colorada, Huaron, and Escobal on the silver side, and Dolores, Timmins, and Jacobina contributing to its gold production. This diversification helps reduce its risk while giving it exposure to two valuable commodities.

Strong operational results and financial position

Despite geopolitical conflicts, Pan American Silver has delivered strong operational results of late. It reported record full-year 2025 production of 22.8 million ounces of silver, exceeding its earlier guidance. This performance was mainly helped by the successful integration of its Juanicipio mine, which has performed better than expected.

Now, Pan American Silver expects 2026 production to reach between 25 and 27 million ounces of silver, along with 700,000 to 750,000 ounces of gold.

Financially, the company remains in a solid position with US$1.3 billion in cash. At the same time, industry dynamics are working in its favour. The global silver market is expected to face a sixth straight annual deficit in 2026, with a shortfall of 67 million ounces. This imbalance between supply and demand could support higher silver prices over time.

Here’s what could drive growth

One of the biggest drivers behind Pan American Silver’s momentum is its continued focus on exploration and development. Its recent drill results from the La Colorada mine in Mexico revealed multiple new high-grade veins. These discoveries could extend the life of the mine and boost its production capacity.

The company is also benefiting from strategic partnerships. Its 44% stake in the Juanicipio mine, operated by Fresnillo, has already become a meaningful contributor to its production and is expected to remain a key asset going forward.

One of Pan American Silver’s most promising projects is the La Colorada Skarn Project in Mexico. The project is expected to produce an average of 19.1 million ounces of silver annually during its peak years, with an estimated mine life of 37 years. These numbers highlight the scale of opportunity ahead.

Conclusion

Pan American Silver may have pulled back from its highs of late, but its fundamentals remain strong. In addition, the company also offers a quarterly dividend with a yield of 1.3%. While the yield is not very high, it reflects the company’s focus on returning capital to shareholders while continuing to invest in growth.

With growing production, a solid financial position, and multiple long-term growth projects, PAAS stock continues to stand out in the mining sector.

The post 1 Canadian Mining Stock Down 18% That I’d Buy and Hold for the Very Long Term appeared first on The Motley Fool Canada.

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Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.