Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (September 2022)
48 slides from Pan American Silver's investor presentation, September 2022
Slide 1: Investor Presentation September 2022
INVESTOR PRESENTATION // SEPTEMBER 2022
Slide 2: Cautionary note and non-GAAP measures
particular mining method for the La Colorada Skarn project, including sub-level caving; these factors. Such factors include, without limitation: the duration and effects of the timing and completion of ramping up the throughput rate at our La Colorada COVID-19, and any other pandemics on our operati
Slide 3: Cautionary note continued: technical information
3 CONTINUED Administrators that establishes standards for all public disclosure an issuer “MJDS”), Pan American is not required to provide disclosure on its mineral makes of scientific and technical information concerning mineral projects. properties under the SEC Modernization Rules and will contin
Slide 4: Diversified asset portfolio with 8 operations in the Americas
Corporate Office 4 Timmins Mining Operations Dolores Development & Advanced Stage Exploration Projects Skarn Deposit La Colorada NASDAQ: PAAS // TSX: PAAS Escobal (Escobal is currently on Diversified asset portfolio with 8 operations in the Americas care and maintenance) Revenues from Peru (44%), Me
Slide 5: Shareholders, communities, employees
5 Shareholders // Communities // Employees Solid track record of return to shareholders Dividend policy allows shareholders to participate in an improving financial position 28 years of responsible operations in Latin America Implementation of industry best practices, such as Towards Sustainable Min
Slide 6: Q2 2022 highlights
6 NASDAQ: PAAS // TSX: PAAS La Colorada production rises to Replaced 11 Mozs Ag and 96.1 kozs Au 1.7 Mozs of mineral reserves Consolidated production remains Strong financial position and dividend backend loaded in 2022 of $0.11 per common share Recorded a net loss largely due to Guidance maintained
Slide 7: Total available liquidity of $741.3M
7 $241.3 M //Prudent balance sheet management reduces Cash + Short Term risk, improves long-term shareholder returns Investments TOTAL AVAILABLE LIQUIDITY $741.3 M Balance sheet management √ Total debt(2) of $63.2 M related to equipment leases and construction loans Revolving $500.0 M Credit √ Susta
Slide 8: $1.8B free cash flow 2010 – YTD 2022
8 8% 2% Treasury Build, net Share of other Repurchases 27% // $1.8B in FCF generated since 2010, returning Dividends $621 M to shareholders (2) and investing $672 M in expansions 25% Debt $1.8B FCF Repayment(3) 2010 – YTD 2022 Cash Flow Priorities 1 Maintain balance sheet flexibility, with low to ze
Slide 9: 514.9 Mozs of silver mineral reserves and 3.6 Mozs of gold
9 // 514.9 Mozs of silver mineral reserves and 3.6 Mozs of gold mineral reserves Replaced 11 Mozs of consolidated silver Added 55.8 kozs of gold mineral reserves at mineral reserves and 96.1 kozs of La Arena, replacing 46% of mined consolidated gold mineral reserves production Added 7.3 Mozs of silv
Slide 10: Revenue by metal and mineral reserves by metal
10 S I LV E R GOLD COPPER ZINC LEAD 2% 8% 15% 4% 27% 6% 2022 2021 Mineral 3% Revenue 26% Reserves by Metal1 60% by Metal2 49% 1. Revenue by Metal based on 2021 realized metal prices of: $25.00/oz for silver, $2,997/tonne for zinc, 2. Mineral resources that are not mineral reserves have no demonstrat
Slide 11: Production back-end loaded in 2022
11 // PRODUCTION BACK-END LOADED IN 2022 AND EXPECTED TO BE AT THE LOW END OF THE RANGES Ag Au 19.0 – 20.5 Moz 550 – 605 Moz ANNUAL CONSOLIDATED ANNUAL CONSOLIDATED PRODUCTION PRODUCTION $10.70 - $12.20 per oz $970 - $1,070 per oz SILVER SEGMENT CASH COSTS2 GOLD SEGMENT CASH COSTS2 $14.50 - $16.00 p
Slide 12: Silver production at La Colorada
12 // Improvements in mine ventilation enabling production to increase Silver Production (million Oz) 1.07 1.10 1.42 1.58 1.42 1.68 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2 COVID-19 Omicron wave
Slide 13: Supporting long-life production from veins and future Skarn development
13 // Supporting long-life production from veins and future development of Skarn Estimated project spend of $50M-$55M in 2022 includes: • Refrigeration unit – cooling system to reduce the working temperature in the mining areas completed in Q2 2022. • Concrete-lined ventilation exhaust shaft - provi
Slide 14: La Colorada Skarn mineral resource
14 // 100% owned, polymetallic Mineral Resource that remains open in nearly all directions for further resource expansion Notes: 1. Estimation and reporting of mineral resources were carried out in accordance with Canadian Institute of Mining, Metallurgy and Petroleum (CIM) guidelines. 2. Mineral re
Slide 15: Mineral resource estimate at different cut-off values and mining methods
15 ZACATECAS, MEXICO // Mineral Resource Estimate at Different Cut-off Values and Mining Methods 1. Prices used to report mineral resources were: US$22 per ounce of silver, US$2,800 per tonne of zinc and US$2,200 per tonne of lead. 2. An estimate of mineral value per tonne was calculated using metal
Slide 16: Large polymetallic deposit offers production for decades
16 ZACATECAS, MEXICO // 100% owned, large, polymetallic deposit offers production for decades The polymetallic skarn mineralisation is concentrated in 3 zones, covering an area of 1,500 metres by 1,100 metres laterally, and a depth of between 600 metres and 1,900 metres below surface.
Slide 17: Escobal ILO 169 consultation process
17 Escobal mining license suspended pending completion of an ILO 169 Consultation in Guatemala. For more information visit: https://mem.gob.gt/pueblo-indigena-xinka/ PRE-PHASE 1 PHASE 1 PHASE 2 PHASE 3 REVIEW PRE-CONSULTATION CONSULTATION SUPREME COURT VERIFICATION PAS Guatemala shall work Ministry
Slide 18: Other investments and projects (MMX, NUAG, Amalia, La Arena II)
18 (MMX) (NUAG) (Mexico) (Peru) Pan American owns a ~17% Pan American owns a ~9.4% JV agreement with Radius Gold: Pan American holds a 100% undiluted interest in this precious undiluted interest in NUAG, which Pan American holds a 65% interest interest in La Arena II, an metals royalty and streaming
Slide 19: PAAS snapshot
19 // PAAS SNAPSHOT 1 ~$3.3B $0.11 MARKET CAP QUARTERLY Long-life silver reserves DIVIDEND2 210.5M 2.8% Major catalysts for silver growth SHARES OUTSTANDING DIVIDEND YIELD Diversified assets 2.5M 10 3-MONTH DAILY SELL SIDE AVERAGE SHARES ANALYSTS Experienced management team MEMBER OF THE MSCI WORLD
Slide 20: Investor relations contact
20 Siren Fisekci VP, INVESTOR RELATIONS & CORPORATE COMMUNICATIONS +1.604.806.3191 ir@panamericansilver.com PanAmericanSilver.com Suite 1440, 625 Howe Street Vancouver, BC, V6C 2T6
Slide 21: Appendix
PAN AMERICAN APPENDIX
Slide 22: Cash and short-term investments bridge
22 Sustaining Cash Flow Performance Growth, Business Development, and Other $650 $600 $249 $4 $550 $500 $450 ($112) $400 Millions $335 $350 ($101) $290 $300 ($51) ($35) $241 $250 $8 ($30) ($22) ($5) $200 $150 $100 $50 $0 Cash and STI Adjusted Net other Sustaining Net income Dividends Net changes Cas
Slide 23: 2022 operating outlook revised
23 2022 August 2022 Production guidance Operating Outlook Revised Operating Outlook1 expected to be at the Annual Production low end of the ranges. Silver - Moz 19.0 - 20.5 No change Gold Segment AISC Gold - koz 550.0 - 605.0 No change and Capital Zinc - kt 35.0 - 40.0 No change Expenditures revised
Slide 24: 2022 quarterly operating outlook
24 2022 Quarterly Operating Outlook1 Q1 Q2 Q3 Q4 FY 2022 Silver Production (million ounces) 4.49 - 4.87 4.69 - 5.07 4.89 - 5.27 4.94 - 5.30 19.00 - 20.50 Gold Production (thousand ounces) 133.0 - 146.4 124.9 - 137.7 135.2 - 148.8 157.0 - 172.2 550.0 - 605.0 Silver Segment Cash Costs2 11.10 - 12.75 1
Slide 25: Capital expenditures outlook
25 Expenditures ($ millions) Sustaining capital 2022 August 2022 increased to between Operating Outlook Revised Operating Outlook1 $240M and $250M due Sustaining Capital to a change in the La Colorada 28.0 - 29.0 No change financing of certain Huaron 16.0 - 19.0 No change planned sustaining San Vice
Slide 26: Shareholders participate in an improving financial position
26 // Shareholders participate in an improving financial position 0.20 $0.18 Base Dividend Variable Dividend 0.18 $0.16 Quarterly dividend per common share 0.16 0.14 $0.12 0.12 $0.11 $0.10 0.10 0.08 0.06 0.04 0.02 0.00 NET CASH2 <$100M $100M to <$200M $200M to <$300M $300M to <$400M $400M or greater
Slide 27: ESG ratings
27 // As of September 9, 2022 S&P Global 0 (worst) to 100 (best) 23 46 56 tba 83 MSCI CCC (worst) to AAA (best) BB BB BBB BBB ~46 Sustainalytics 0 (best) to 100 (worst) 44.0 35.6 31.0 27.4 91 (SEVERE RISK) (HIGH RISK) (HIGH RISK) (MEDIUM RISK) 1 (higher disclosure) to E 10 (lower disclosure) - 5 3 4
Slide 28: 30% reduction in GHG emissions by 2030
28 // 30% reduction in GHG emissions by 2030 and an aspirational objective of net zero by 2050
Slide 29: Silver supply and demand
29 // 2022 forecast1; in million ounces Mine Recycling Investment2 Industrial Production 18% 25% 52% 82% Silver Silver Supply Demand 1,030 1,102 Jewelry & Silverware 23% ~ 72 Moz supply shortfall projected for 2022 1. Source: Silver Institute, April 20, 2022. 2. Net physical investment in coins and
Slide 30: Continued growth in silver demand for solar installations
30 // Continued growth in silver demand for solar installations Moz Source: GTM, Metals Focus, April 2022
Slide 31: Growing industrial demand from decarbonization and electrification
31 // Growing industrial demand from global transition to decarbonization and electrification • Silver has the highest electrical and thermal conductivity of all metals, making it an important metal in the transition to a low carbon economy. • ~11% of silver supply used for photovoltaics (solar pane
Slide 32: Escobal: one of the world's best silver mines
32 SANTA ROSA, GUATEMALA // One of the world’s best silver mines • High quality, well built operation with over US$500 million invested1 • One of the world’s largest primary silver deposits with reserves of 264 Moz • 3 consecutive years of production at 20 Moz Ag/year at AISC consistently below US$1
Slide 33: Navidad: one of the largest undeveloped primary silver deposits
33 CHUBUT, ARGENTINA // One of the largest undeveloped primary silver deposits Navidad • 100% owned silver project • Project comprises 8 individual mineral deposits in 3 separate mineralized trends • Scalable production profile with high-grade mineralization at surface • Development contingent on pr
Slide 34: La Colorada: largest silver producing mine
34 La Colorada ZACATECAS, MEXICO // Pan American’s largest silver producing mine • 100% owned and operated underground mine • Expansion completed in 2017 – new mine shaft and sulphide processing plant • Currently producing silver-gold doré bars from a conventional cyanide leach plant for the oxide o
Slide 35: Dolores: large gold/silver mine
35 Dolores CHIHUAHUA, MEXICO // Large gold / silver Mine • 100% owned and operated • Mining is by open pit and uses conventional cyanide heap leaching to produce gold and silver doré • Expansion completed in 2017 featuring a pulp agglomeration plant to process high-grade ore • Average throughput cap
Slide 36: Huaron: polymetallic silver mine
36 PASCO, PERU Huaron // Polymetallic silver mine • 100% owned and operated underground mine • Average throughput capacity of ~2,500 tpd using flotation technology to produce silver in copper, lead, and zinc concentrates Silver Production (Moz) Reserves & Resources 3.8 Grade Contained Metal 3.5 Tonn
Slide 37: Morococha: on care and maintenance
37 YAULI, PERU Morococha // On care and maintenance • 92.3% owned and operated underground mine • Average throughput capacity of ~2,000 tpd using flotation technology to produce silver in zinc, lead, and copper concentrates • Evaluating strategic alternatives for Morococha while placing the operatio
Slide 38: San Vicente: polymetallic silver mine
38 POTOSÍ, BOLIVIA San Vicente // Polymetallic silver mine • 95% owned and operated underground mine • Average throughput capacity of ~950 tpd utilizing a standard flotation process to produce silver-zinc and silver-lead concentrates • Mechanization efforts, enhanced mine dilution controls and impro
Slide 39: Manantial Espejo: underground mines in Santa Cruz, Argentina
39 SANTA CRUZ, ARGENTINA La Colorada // Underground mines in Santa Cruz, Argentina • 100% owned and operated • High-grade ore from Joaquin and COSE is processed at the Manantial Espejo plant • Average throughput capacity of ~2,150 tpd, treating ore by Manantial Espejo gravity concentration, agitatio
Slide 40: Shahuindo: large gold mine with growth potential
40 CAJAMARCA, PERU Shahuindo // Large gold mine with significant growth potential • 100% owned and operated open pit gold mine producing silver by-products from doré • Average throughput capacity of ~36,000 tpd with heap leach processing • Commercial production began in 2016, significant exploration
Slide 41: La Arena: gold mine with sulphide expansion potential
41 LA LIBERTAD, PERU La Arena // Gold mine with sulphide expansion potential (La Arena II) • 100% owned and operated open pit gold mine producing doré • Run-of-mine heap leach currently processing ~36,000 tpd • Exploration success has extended mine life • PEA released February 2018 on sulphide expan
Slide 42: La Arena II: undeveloped copper porphyry
42 LA LIBERTAD, PERU La Arena II // 100% owned, undeveloped copper porphyry Reserves & Resources (as of June 30, 2021) Grade Contained Metal Tonnes Au Cu Au Cu (Mt) (g/t) (%) (koz) (kt) M&I Resources 696.3 0.24 0.38 5,280 2,623 Inferred Resources 54.7 0.23 0.29 413 159 Based on Tahoe PEA February 20
Slide 43: Timmins: two producing mines in Canadian mining camp
43 ONTARIO, CANADA Timmins West Bell Creek // Two producing mines in prolific Canadian mining camp • 100% owned and operated • Comprises two underground gold mines, Timmins West and Bell Creek, which both feed the Bell Creek mill • Throughput capacity of ~6,000 tpd producing doré • Shaft upgrade to
Slide 44: Mineral reserves as of June 30, 2022
44 Pan American Silver Corporation Mineral Reserves as of June 30, 2022 (1,2) Property Location Classification Tonnes Ag (g/t) Contained Ag Au (g/t) Contained Au Cu (%) Contained Cu Pb (%) Contained Pb Zn (%) Contained Zn (Mt) (Moz) (koz) (kt) (kt) (kt) Silver Segment Huaron Peru Proven 7.0 169 38.1
Slide 45: Measured and indicated mineral resources as of June 30, 2022
Pan American Silver Corporation Measured and Indicated Mineral Resources as of June 30, 2022 (1,2) Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag Au (g/t) Contained Au (koz) Cu (%) Pb (%) Zn (%) 45 (Moz) Silver Segment Huaron Peru Measured 2.1 163 10.9 0.42 1.58 3.05 Indicated 2.
Slide 46: Inferred mineral resources as of June 30, 2022
Pan American Silver Corporation Inferred Mineral Resources as of June 30, 2022 (1,2) Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag Au (g/t) Contained Au Cu (%) Pb (%) Zn (%) 46 (Moz) (koz) Silver Segment Huaron Peru Inferred 7.2 155 36.1 0.26 1.47 2.73 Morococha (92.3%) (3) Peru
Slide 47: Metal price assumptions for reserves and resources
47 Mine Category Ag US$/oz Au US$/oz Cu US$/t Pb US$/t Zn US$/t Huaron All categories 19.00 1,300 7,000 2,000 2,600 Morococha All categories 19.00 1,300 7,000 2,000 2,600 La Colorada All categories 19.00 1,300 7,000 2,000 2,600 La Colorada skarn All categories 22.00 2,200 2,800 Reserves 19.00 1,600
Slide 48: Mineral reserve and resource notes
48 Mineral reserves and mineral resources are as defined by the Canadian Institute of Mining, Metallurgy and Petroleum. Pan American reports mineral resources and mineral reserves separately. Reported mineral resources do not include amounts identified as mineral reserves. Mineral resources that are
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