Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Q1 2020 Earnings Presentation
24 slides from Pan American Silver's earnings presentation, May 7, 2020
Slide 1: Q1 2020 Earnings Review
Q1 2020 Earnings Review 1 May 7, 2020
Slide 2: Cautionary Note
Cautionary Note Non-GAAP Measures This presentation of Pan American Silver Corp. and its subsidiaries (collectively, “Pan American”, “Pan American Silver”, the “Company”, “we” or “our”) refers to various non-GAAP measures, such as “AISC", “cash costs per ounce sold”, “adjusted earnings” and “basic a
Slide 3: Cautionary Note
Cautionary Note These forward-looking statements and information reflect Pan American’s current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by Pan American, are inherently subject to significant operational, business, e
Slide 4: Cautionary Note to U.S. Investors Concerning Estimates of Mineral Reserves and Resources
Cautionary Note to U.S. Investors Concerning Estimates of Mineral Reserves and Resources This presentation has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all mineral reserve an
Slide 5: COVID-19: Our Response
COVID-19: Our Response Priority is the health and safety of our people and the communities where we live and work • Adopting health and safety protocols consistent with those recommended by local health authorities, best management practices and the World Health Organization across all our operating
Slide 6: COVID-19: Our Response
COVID-19: Our Response Business continuity planning • Engaged cross-functional team to proactively plan and manage issues. • Monitoring supply and logistical chains, establishing alternatives, as necessary. • Instituted corporate-wide spending controls. • Reduced management pay, including a 20% sala
Slide 7: Managing COVID-19 Impact
Managing COVID-19 Impact Pan American is well positioned to manage the impact of COVID-19 Strong financial position $147.8M of cash and cash equivalents, as at March 31, 2020 $240.0M available on Credit Facility, as at March 31, 2020(1) Experienced management team Geographically diversified op
Slide 8: Growth in Quarterly Revenues
Growth in Quarterly Revenues Q1 2020 to Q1 2019 increase in revenues from increased gold sales and increased price of gold sold Total revenues in US$ millions(1) Reserves by Metal2 $450 2% 6% $400 14% $350 46% $300 $250 $200 32% $150 $100 $50 $0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Silver Revenue
Slide 9: Consolidated Q1 2020 Highlights
Consolidated Q1 2020 Highlights • Cash flow from operations of $114.1 million • Net loss of $77.2M, or $0.37/share • $52.7M tax expense, mostly from non-cash devaluations of tax assets in foreign currencies • $28.3M investment loss, mostly from non-cash unrealized mark-to-market adjustments • $16.0M
Slide 10: Consolidated Financial Results
Consolidated Financial Results Unaudited in millions of US$, except per share amounts Q1 2020 Q1 2019 Revenue 358.4 253.7 Mine operating earnings 50.1 15.8 Net (loss) earnings (77.2) 3.3 Basic (loss) per share(1) (0.37) 0.02 Adjusted (loss) earnings(2) (7.6) 4.5 Basic adjusted (loss) per share(1) (0
Slide 11: Q1 2020 Consolidated Cash Flows
Q1 2020 Consolidated Cash Flows (1) (1) (2) (1) (1) (1) (1) “STI” means short-term investments, “NCI” means non-controlling interests, and “NUAG” means New Pacific Metals Corp. (2) Net cash generated from operating activities before changes in working capital, interest and income taxes paid, and min
Slide 12: Reconciliation of adjusted (loss) earnings to GAAP net (loss) earnings
Reconciliation of adjusted (loss) earnings to GAAP net (loss) earnings In US$ millions $0 $3 $4 -$10 $8 ($3) ($8) $8 -$20 $9 -$30 $41 -$40 -$50 -$60 -$70 -$80 ($77) -$90 Net loss for the Effect of Net realizable Unrealized COVID-19 Unrealized Share of loss Effect of taxes Adjusted loss period foreig
Slide 13: Liquidity and Capital Position
Liquidity and Capital Position US$ Millions March 31, 2020 Cash and Short-term Investments 239.2 Working Capital(1) 488.0 Amount drawn on Revolving Credit Facility(2) 260.0 Total debt(3) 299.2 (1) Working capital is a non-GAAP measure calculated as current assets less current liabilities. The Compan
Slide 14: Production
Production Silver Production Gold Production (ounces ‘000s) (ounces ‘000s) Q1 2020 Q1 2019 Q1 2020 Q1 2019 Silver Segment: La Colorada 1,593 1,990 1.1 1.0 Dolores 1,230 1,112 27.1 30.0 Huaron 771 937 0.2 0.2 Morococha(1) 457 697 0.3 0.6 San Vicente(2) 738 851 0.1 0.1 Manantial Espejo/COSE/Joaquin 69
Slide 15: Cash Cost and AISC
Cash Cost and AISC Cash Costs(1) AISC(1) ($ per ounce) ($ per ounce) Q1 2020 Q1 2019 Q1 2020 Q1 2019 La Colorada 7.23 2.16 9.98 3.37 Dolores 0.07 3.34 23.29 26.45 Huaron 7.95 4.38 10.56 8.54 Morococha 12.29 (1.01) 20.23 2.20 San Vicente 14.71 10.25 17.08 11.20 Manantial Espejo 13.69 27.53 14.85 27.9
Slide 16: Cash Flow Priorities
Free Cash Flow Allocation(1,2) 5% 14% 25% Return to shareholders through dividends ~$1.3 Cash Flow Priorities Billion Invest in high-return FCF generated projects 11% since 2010 Maintain balance sheet 45% flexibility, with low to zero debt Dividends Share Repurchases Expansion Capital Debt Repayment
Slide 17: Return to Shareholders
Return to Shareholders Maintained quarterly cash dividend of $0.05 per common share, payable on or about May 29, 2020(1) in US$ millions $350 $0.60 $300 $0.50 Annualized Dividend per Share $250 $142.5 M in Cumulative Dividends $0.40 $200 share buy-backs $0.30 $150 $0.20 $100 $0.10 $50 $0 $0.00 2010
Slide 18: Q&A
Q&A To join the queue: Press * and 1 on your touch-tone telephone. You will hear a tone acknowledging your request. If you wish to remove yourself from the queue, press * and 2 18
Slide 19: Pan American Silver Proven and Probable Reserves
Pan American Silver Proven and Probable Reserves1,2 Property Location Classification Tonnes Ag Contained Au Contained Cu (%) Contained Pb (%) Contained Zn (%) Contained (Mt) (g/t) Ag (Moz) (g/t) Au (koz) Cu (kt) Pb (kt) Zn (kt) Silver Segment Huaron Peru Proven 6.2 168 33.5 - - 0.69 43.0 1.44 89.5 3
Slide 20: Pan American Silver Measured and Indicated Resources
Pan American Silver Measured and Indicated Resources1,2 Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag Au (g/t) Contained Au (koz) Cu (%) Pb (%) Zn (%) (Moz) Silver Segment Huaron Peru Measured 2.2 157 11.0 - - 0.59 1.50 2.80 Indicated 2.4 155 12.0 - - 0.61 1.64 3.03 Morococha (9
Slide 21: Pan American Silver Inferred Resources
Pan American Silver Inferred Resources1,2 Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag Au (g/t) Contained Au Cu (%) Pb (%) Zn (%) (Moz) (koz) Silver Segment Huaron Peru Inferred 6.2 155 30.8 - - 0.41 1.45 2.77 Morococha (92.3%) (3) Peru Inferred 4.5 138 19.9 - - 0.37 1.02 3.26
Slide 22: Metal price assumptions used to estimate mineral reserves and resources
Metal price assumptions used to estimate mineral reserves and resources as at June 30, 2019 Mine Category Ag US$/oz Au US$/oz Cu US$/t Pb US$/t Zn US$/t Huaron All categories 17.00 1,300 6,000 2,100 2,500 Morococha All categories 17.00 1,300 6,000 2,100 2,500 La Colorada All categories 17.00 1,300 6
Slide 23: La Colorada Skarn Deposit
La Colorada Skarn Deposit Mineral Resource Estimate Details Classification Cut-off Tonnes Ag Cu Pb Zn US$/tonne millions g/t % % % Inferred 60 72.5 44 0.17 2.02 4.40 Notes: • CIM definition standards were followed for the estimation of mineral resources. • Mineral resources are not mineral reserves
Slide 24: Archived recording
Archived recording The audio and presentation archive of this conference call and webcast will be accessible on our website at: https://www.panamericansilver.com/investors/events-and-presentations/ 24