(Kitco News) - Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA) reported a net loss for the second quarter as prices of metals fell, although the company increased silver output and lowered its cost of mining each ounce.

Pan American generated a net loss of $7.3 million, or a nickel per share, compared to a net loss of $5.7 million, or 4 cents, in the comparable quarter of 2014, the company said in an earnings report late Thursday. The company listed a mine-operating loss of $1 million during the second quarter, compared to mine-operating earnings of $10.2 million in the year-ago period.

Pan American listed $174.2 million in second-quarter revenue, 13% less than a year ago. Lower revenue was blamed primarily on a decline in metal prices other than zinc, along with negative settlement adjustments on concentrate sales, lower quantities of zinc, lead and gold sold, and higher treatment and refining charges.

Pan American is considered the second-largest primary silver mining company in the world after churning out 26 million ounces of silver in 2014. The Vancouver-based company has mines in Mexico, Peru, Bolivia and Argentina.

"We had a very strong production quarter, meaningfully increasing our silver and gold production as compared to both the second quarter of 2014 and the first quarter of 2015,” said Geoff Burns, chief executive officer.

The company reduced costs and, despite falling prices of precious metals, increased cash flow from operations by 75% to $20.6 million, or 14 cents per share, from the first quarter of this year, he continued.

“But for the tragic accident at Manantial Espejo, I would consider this to be an all-around solid quarter, even though we posted a net loss of $7.3 million, almost exclusively as a result of a total of $6 million in negative net realizable value and concentrate settlement adjustments in recognition of lower metal prices as compared to the end of the previous quarter."

During the second quarter, Pan American produced 6.65 million silver ounces and 44,400 gold ounces. Silver output was up slightly from 6.56 million a year ago as a 250,000-ounce production decline at Alamo Dorado was offset by production increases at the company's other mines. Gold production rose 18% from the second quarter of 2014, boosted by Manantial Espejo and Dolores.

Pan American reported higher copper production than in the same quarter a year ago but lower lead output.

Pan American listed all-in sustaining costs of $14.46 an ounce, after by-product credits, a decline of 20% from the same quarter of 2014 and well below the 2015 full-year forecast of $15.50 to $16.50.

The board of directors approved a third quarterly cash dividend this year of a nickel per common share, payable around Sept. 8 to holders of record as of the close on Aug. 25.

Pan American reaffirmed its annual precious metals production forecast of between 25.5 million and 26.5 million silver ounces and between 165,000 ounces and 175,000 ounces of gold. With revised mine sequencing at Morococha, the company increased the annual production forecast for copper to between 14,000 to 15,000 metric tons, up 81% from the low end of the 8,000 to 8,500 tons originally forecast for the year. Conversely, the Pan American reduced full-year zinc and lead guidance to between 37,000 to 39,000 tons and 13,000 to 13,500 tons, respectively, from 41,000 to 43,000 tons of zinc and 14,500 to 15,000 ton of lead.

Provided metal prices remain near current levels, Pan American said it envisions being at the low end or below its annual guidance for all-in sustaining costs of between $15.50 and $16.60 an ounce of silver, after by-product credits. The company also anticipates being at the low end or below its annual guidance for cash costs of between $10.80 and $11.80 per ounce.

By Allen Sykora of Kitco News; asykora@kitco.com