Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (July 2024)
54 slides from Pan American Silver's investor presentation, July 2024
Slide 1: The World's Premier Silver Mining Company
THE WORLD'S PREMIER SILVER MINING COMPANY NYSE | TSX PAAS PRESENTATION // JULY 2024
Slide 2: Cautionary Note and Non-GAAP Measures
2 allocation; synergies following the integration of Yamana Gold Inc.’s four pressures and the potential for economic recessions; fluctuations in silver, gold operating mines; statements regarding the investments in capital projects, and base metal prices; fluctuations in prices for energy inputs, l
Slide 3: Not an Offer or Solicitation; Technical Information
3 CONTINUED has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U.S. NOT AN OFFER OR A SOLICITATION investors are cautioned not to assume that any part of an “indicated resource” will ever be converted into a “r
Slide 4: Portfolio offers scale and quality in the Americas
CANADA 4 Head Office Timmins Dolores La Colorada Skarn Deposit // Pan American’s portfolio offers scale & quality in the Americas, MEXICO GUATEMALA where we have been operating for 30 years Escobal (C&M) • 11 producing mines1 3% • 2 catalysts with potential for material 10% 26% silver growth: La Col
Slide 5: The go-to name for investing in silver
5 Management team experienced working in the Americas and focused on executing clearly-defined strategic priorities The “go-to” name for investing in silver with large Mineral Reserves & Resources Catalysts for material silver production growth: La Colorada Skarn, Escobal and optionality with Navida
Slide 6: Silver Reserves, Resources and Production vs Peers
6 Silver Proven & Probable Silver Measured & Indicated 2023 Silver Production (Moz) Mineral Reserves 1 (Moz) Mineral Resources 1 (Moz) 2 2 Pan American 486.8 Pan American 1,033.8 Fresnillo 56.3 Fresnillo 381.2 Fresnillo 723.7 Pan American 20.4 Coeur 243.9 Endeavour Silver 529.9 Hecla 14.3 Hecla 238.
Slide 7: Largest by market cap and most liquid silver producer
7 // Pan American is largest by market cap and most liquid of the following silver producers $120 $100 $80 Liquidity ($M)1 $60 First Majestic Hecla $40 Coeur Fortuna $20 Endeavour Silvercrest Silver Fresnillo MAG Hochschild Aya = Market Capitalization $0 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0
Slide 8: Share price correlation to silver price
8 // In 2023, Pan American’s share price demonstrated a strong relationship to the silver price Share Price Correlation to Silver Price 1 (%) 10-Year Total Shareholder Returns 2 Pan American 72% Aya 698% Endeavour Silver 68% MAG 102% Fortuna 67% Pan American 65% Hecla 66% Hecla 62% First Majestic 62
Slide 9: Growing industrial demand from decarbonization and electrification
9 // Growing industrial demand from global transition to decarbonization and electrification 2024E Silver Market Dynamics Electrical Applications Silver Demand (Moz) 486 445 351 371 Photography & Other 322 Recycling 2% 18% Investment1 17% Silver Silver 2020 2021 2022 2023 2024F Supply Demand 1.00 Bo
Slide 10: Silver Market Supply, Demand and Balance
10 Silver Market Total Supply and Demand (Moz Ag) 1,300 1,100 Silver (Moz) 900 700 500 2016 2017 2018 2019 2020 2021 2022 2023 2024F 2025F 2026F 2027F 2028F Total Supply Total Demand Silver Market Balance (Moz Ag) 100 0 Silver (Moz) -100 -200 -300 2016 2017 2018 2019 2020 2021 2022 2023 2024F 2025F
Slide 11: Vision and strategic priorities
11 // Pan American’s vision is to be the world’s premier silver mining company, with a reputation for excellence in discovery, engineering, innovation and sustainable development Focus on the safe, efficient and environmentally sound operation of our mines ➢ achieve our 2024 Operating Outlook1 ➢ fin
Slide 12: Total available liquidity
12 Cash + short-term Revolving investments Credit TOTAL AVAILABLE $331M Facility LIQUIDITY Cash + short-term investments of $331M $750M $1,081M3 Total debt2 of $806.6M related to senior notes and construction loans & leases $283M with 4.625% coupon maturing in December 2027 $500M with 2.63% coupon m
Slide 13: Returned $854M to shareholders since 2010
13 // Returned $854M to shareholders 1 since 2010 while investing in projects & maintaining a healthy balance sheet Debt Repayment Dividends • Base dividend of $0.10/share with a defined variable • Maintain balance sheet flexibility with low leverage dividend linked to net cash2 • $388.5M of debt wa
Slide 14: 2024 Operating Outlook
14 // forecasting an increase in silver and gold production relative to 2023 and strong performance on costs 2 Ag Au 21.0 – 23.0 Moz 880 – 1,000 Koz ANNUAL CONSOLIDATED ANNUAL CONSOLIDATED PRODUCTION PRODUCTION $11.70 - $14.10 per oz $1,165 - $1,260 per oz SILVER SEGMENT CASH COSTS2 GOLD SEGMENT CAS
Slide 15: Asset sales cash proceeds
15 // Cash proceeds totaled $988.4M, plus 4 NSR royalties1 Entered into agreement to sell La Arena gold mine and La Arena II copper/gold development project for $245M in cash upfront, a $50M contingent payment, and a 1.5% gold NSR royalty2 Sold 56.25% stake in the MARA project for $475M in cash and
Slide 16: ~$150M annual cost savings from synergies
16 // Pan American estimates ~$150M annually of cost savings through synergies and reduced expenses with the successful integration of Yamana’s four operating mines G&A (US$M) Implied Synergies = $61M Additional $90 million in annual cash savings following $6 $61 $94 $127 dispositions and debt repay
Slide 17: La Colorada mine overview
17 Opportunities MINE OVERVIEW Ag Pb Zn Restoring mine ventilation through new, 5.3 – 5.7 Moz 5.5 metre concrete-lined ventilation shaft 2024F Ag Production1 and twin fan infrastructure (Backend Loaded) TYPE LOCATION OWNERSHIP Exploration to the east of NC2 and south ~1,620 tpd Underground Mine Zaca
Slide 18: La Colorada ventilation shaft improvement
18 // significant improvement in mine operating conditions expected following completion mid 2024 The concrete-lined, 5.5-metre diameter ventilation shaft was fully excavated to a depth of 581 metres in December 2023. Ventilation fans to be installed on shaft by mid-2024. Once completed, the ventila
Slide 19: La Colorada Skarn Preliminary Economic Assessment Highlights
19 19 ZACATECAS, MEXICO // Preliminary Economic Assessment Highlights • Production averaging 17.2 Moz of silver, 427k tonnes of zinc and 218k tonnes of lead annually during the first 10 years • 50,000 tpd sub-level cave mine and conventional flotation plant • 17-year mine life and continued explorat
Slide 20: La Colorada Skarn mineralisation zones
20 // Mineralisation is concentrated in 3 zones, covering an area of 1,500 metres by 1,100 metres, and a depth of 800 metres to 1,900 metres below surface (1) Please refer to the NI 43-101 Technical Report dated January 31, 2024, as amended, for the Preliminary Economic Assessment of the La Colorada
Slide 21: La Colorada Skarn would rank 4th largest global silver mine
21 // Relative to 2023 mine performance, La Colorada Skarn would rank as the 4 th largest global silver mine 1,2 Largest Mines by Total Silver Production in 2023 1 (Moz) Estimated Mine Life3 2040 n.a. 2030 2033 2047 2035 2028 2027 2027 2039 41.1 Annual Production1 (Moz) 21.2 19.0 18.0 17.2 16.8 14.9
Slide 22: La Colorada Skarn would rank 4th largest global zinc mine
22 // Relative to 2023 mine performance, La Colorada Skarn would also rank as the 4 th largest global zinc mine 1,2 Largest Mines by Total Zinc Production in 2023 1 (kt) Estimated Mine Life3 2031 2031 2036 2047 2044 2033 2040 2036 2030 2042 540 485 463 Annual Production1 (kt) 427 287 262 262 208 171
Slide 23: Escobal: one of the world's best silver mines
23 SANTA ROSA, GUATEMALA MEXICO GUATEMALA // One of the world’s best silver mines Escobal • High-quality, well-built operation with over US$500M 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 consi
Slide 24: Escobal ILO 169 consultation process
24 For more information, please visit https://mem.gob.gt/derecho- // Escobal mining license suspended pending completion of an ILO 169 Consultation in Guatemala minero-escobal/ PRE-PHASE 1 PHASE 1 PHASE 2 PHASE 3 REVIEW PRE-CONSULTATION CONSULTATION SUPREME COURT VERIFICATION PAS Guatemala shall wor
Slide 25: Jacobina mine overview
25 Opportunities MINE OVERVIEW Au Mine optimization and mining method selection 185 – 203 koz 2024F Au Production1 TYPE LOCATION OWNERSHIP Excellent exploration potential to extend down- dip and along strike of known conglomerate ~8,400 tpd Underground Mine Bahia, Brazil 100% reefs 2024F Plant Throu
Slide 26: Royalties and non-core project interests
26 ➢ Life-of-mine copper net smelter return ➢ La Bolsa Gold-Silver Project (Mexico) ➢ Pan American owns an ~11.6% undiluted royalty of 0.75% on a 100% interest in the interest in New Pacific Metals, which is MARA project with the right for PAAS to ➢ Pico Machay Gold Project (Peru) freely transfer th
Slide 27: ESG Ratings and Rankings
27 Reporting Frameworks and Standards ESG Ratings and Rankings Memberships and Associations $750 MILLION REVOLVING CREDIT FACILITY LINKED TO THIRD -PARTY ESG RATINGS (S&P GLOBAL AND MSCI) As of May 23, 2024
Slide 28: PAAS Snapshot
28 // PAAS SNAPSHOT 2 $7.3 B $0.10 MARKET CAP QUARTERLY DIVIDEND3 Analyst Coverage1 362.9 M 2.0% SHARES BofA Global Research (Lawson Winder) OUTSTANDING DIVIDEND YIELD Edison Group (Andrey Litvin) Jefferies (Matt Murphy) $90 M 10 AVERAGE DAILY SELL SIDE RBC Capital Markets (Michael Siperco) TRADING
Slide 29: Appendix
PAN AMERICAN APPENDIX
Slide 30: Q1 2024 financial and production results
30 Q1 2024 FINANCIAL (in millions of US$, except per share amounts) Revenue 601.4 Cost of Sales1 530.4 Mine operating earnings 71.0 Net loss (30.8) Basic loss per share2 (0.08) Adjusted earnings3 4.7 Basic adjusted earnings per share2,3 0.01 Net cash generated from operating activities 61.1 Net cash
Slide 31: 2024 guidance by mine
31 Silver Production Gold Production Cash Costs AISC (million ounces) (thousand ounces) ($ per ounce)2 ($ per ounce)2 Silver Segment: La Colorada (Mexico) 5.3 – 5.7 2 16.60 - 19.30 21.00 - 24.00 Cerro Moro (Argentina) 3.2 – 3.5 93 – 115 3.20 - 6.70 8.00 - 11.50 Huaron (Peru) 3.5 – 3.8 – 9.30 - 11.20
Slide 32: 2024 quarterly guidance
32 • Silver production is anticipated to increase towards the second half of 2024 largely as a result of increased production from La Colorada as the fan installation is expected to be completed in mid-2024 allowing for better ventilation at the mine, and an increase in silver grades due to improved
Slide 33: 2024 capital expenditures guidance
33 Expenditures ($ millions) Sustaining Capital Project capital invested to advance La Colorada (Mexico) 22.5 – 23.0 strategic goals: Cerro Moro (Argentina) 14.0 – 15.5 Huaron (Peru) 17.5 – 18.5 • Upgrading processing plant at San Vicente (Bolivia)2 4.5 – 5.5 Jacobina Jacobina (Brazil) 53.0 – 55.0 E
Slide 34: Dividend Policy and Share Buyback
34 Dividend Policy Share Buyback (Normal Course Issuer Bid) Pan American supplements a base dividend of $0.10 per Pan American believes that the market price of its common common share with a variable dividend, paid on a quarterly shares, from time to time, may not fully reflect the underlying basis
Slide 35: ESG Structure and Accountability
35 // Structure and Accountability Senior Management’s Compensation linked to ESG Performance • The Communities and Sustainable Development Committee reviews the Company’s sustainability performance and management of sustainability impacts. • The Health, Safety and Environment Committee provides pol
Slide 36: Jacobina
36 BAHIA, BRAZIL Jacobina // Study underway to optimize long-term economics and expansion potential • 100% owned and operated underground gold mine producing doré via a conventional leaching process • Throughput of ~8,500 tpd at gold recovery rates of ~96% Gold Production (koz) Mineral Reserves & Re
Slide 37: El Peñon
37 ANTOFAGASTA, CHILE El Peñon // Large gold / silver Mine • 100% owned and operated underground gold and silver mine producing gold and silver doré • The mine has been in operation since 1999 and has consistently replaced ounces mined Silver & Gold Production Mineral Reserves & Resources Silver (Mo
Slide 38: La Colorada
38 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 39: Shahuindo
39 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 40: Timmins
40 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 • Exploration succe
Slide 41: Huaron
41 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) Mineral Reserves & Resources Grade Contained Metal 3.7
Slide 42: San Vicente
42 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 43: Cerro Moro
43 SANTA CRUZ, ARGENTINA // Integrated gold & silver mining complex Cerro Moro • 100% owned and operated open pit and underground gold and silver complex feeding a single processing plant producing gold and silver doré Silver & Gold Production Mineral Reserves & Resources Silver (Moz) Gold (koz) Gra
Slide 44: Minera Florida
44 METROPOLITAN REGION, CHILE Minera Florida // Polymetallic gold mine • 100% owned and operated underground mine producing gold and silver doré bars and zinc concentrate Gold Production (koz) Mineral Reserves & Resources 85 921 Grade Contained Metal 82 Yamana Tonnes Au Ag Zn Au Ag Zn Q1 (Mt) (g/t)
Slide 45: Dolores
45 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 • Average throughput capacity of 20,000 tpd Silver & Gold Production Mineral Reserves & Resources Silver (Moz) Gold (
Slide 46: Navidad
46 46 CHUBUT, ARGENTINA Navidad // One of the largest undeveloped primary silver deposits • 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
Slide 47: La Colorada Skarn mineral resource estimate
47 ZACATECAS, MEXICO Mining Resource Tonnes Zn Pb Ag Zn Pb Ag Method Classification (millions) (%) (%) (g/t) (Mt) (Mt) (Moz) Indicated 173.6 2.79 1.32 33 4.8 2.3 183 Sub-level Caving (SLC) Inferred 103.6 2.47 1.03 35 2.6 1.1 116 Notes: 7. Reasonable prospects for eventual economic extraction were as
Slide 48: La Colorada Skarn PEA summary
48 Construction period 6 years Production mine life 17 years Production rate 50 ktpd (or 18.25 Mtpa) Notes: Mineable inventory 284.7 million tonnes 1. Assumes metal prices of $2,800 per tonne of zinc, $2,200 per Average annual silver produced first 10 years 17.2 million ounces tonne of lead, and $22
Slide 49: Mineral Reserves as of June 30, 2023
49 As of June 30, 20231,2 Tonnes Ag Contained Au Contained Cu Contained Contained Contained (1) See table below entitled Property Location Classification Pb (%) Zn (%) (Mt) (g/t) Ag (Moz) (g/t) Au (Koz) (%) Cu (Kt) Pb (Kt) Zn (Kt) "Metal price assumptions Silver Segment used to estimate mineral Huar
Slide 50: Measured and Indicated Mineral Resources
Pan American Silver Corporation Measured and Indicated Mineral Resources as of June 30, 20231,2,3 Tonnes Contained Contained Property Location Classification (Mt) Ag (g/t) Ag (Moz) Au (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Huaron Peru Measured 1.4 180 8.2 0.30 1.95 3.15 Indicated 1.8 173 10.2 0.30 1.86
Slide 51: Inferred Mineral Resources
51 as of June 30, 20231,2,3 Pan American Silver Corporation Inferred Mineral Resources as of June 30, 20231,2,3 Tonnes Ag Contained Au Contained Property Location Classification (Mt) (g/t) Ag (Moz) (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Silver Segment Huaron Peru Inferred 5.9 164 31.2 0.35 1.76 2.87 1.
Slide 52: Metal Price Assumptions for Reserves and Resources
52 Metal Price Assumptions Used to Estimate Mineral Reserves and Mineral Resources as of June 30, 2023 Property Category Ag US$/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 La Colorada All categories 19.00 1,300 7,000 2,000 2,600 La Colorada Skarn Resou
Slide 53: Mineral reserves and resources notes
53 All mineral reserves and mineral resources have been estimated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101. Mineral resources are reported exclusives of mineral reserves. Pan American does not expect these mineral r
Slide 54: Investor Relations contact
54 Siren Fisek ci VP, INVESTOR RELATIONS & CORPORATE COMMUNICATIONS +1.604.806.3191 | ir@panamericansilver.com panamericansilver.com Suite 2100, 733 Seymour St Vancouver, BC, V6B 0S6
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