Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (September 2021)
40 slides from Pan American Silver's investor presentation, September 2021
Slide 1: Investor Presentation September 2021
INVESTOR PRESENTATION // SEPTEMBER 2021
Slide 2: Non-GAAP Measures and Cautionary Note
2 Acquisition. Consequently, the Company's operations have been divided into duration and extent of the COVID-19 pandemic is minimized or not long-term; silver and gold segments for the purposes of our financial reporting, as the assumptions related to the global supply of COVID-19 vaccines and the
Slide 3: Cautionary Note (continued) and Technical Information
3 CONTINUED statements or information to reflect changes in assumptions or in Canadian public disclosure standards, including NI 43-101, differ significantly circumstances or any other events affecting such statements or information, from the requirements of the United States Securities and Exchange
Slide 4: Diversified asset portfolio with 9 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 (The Escobal mine is Diversified asset portfolio with 9 operations in the Americas currently not operating) Revenues from Peru (42%), Mex
Slide 5: Shareholders, Communities, Employees
5 Shareholders // Communities // Employees Solid track record of return to shareholders Quarterly dividend increased to $0.10/share in Q2 2021; paying a dividend since 2010 27 years of responsible operations in Latin America Implementation of industry best practices, such as Towards Sustainable Mini
Slide 6: Environmental Social Governance
6 ENVIRONMENTAL • No significant environmental incidents at our operations • Site-specific projects to reduce energy use, emissions and water intensity • Independent dam safety reviews completed at all sites • Implementing the TSM Tailings, Water Stewardship and Biodiversity Protocols SOCIAL • US$2
Slide 7: View our 2020 Sustainability Report online
7 // View our 2020 Sustainability Report online Reporting ESG performance since 2010 under the Global Reporting Initiative (GRI) standards; in 2020, aligning disclosure with TCFD and SASB Member of UN Global Compact (UNGC) and reporting progress on the 10 UNGC Principles and the UN Sustainable Devel
Slide 8: 2021F Revenue by Metal and Reserves by Metal
8 S I LV E R GOLD COPPER ZINC LEAD 2% 9% 14% 4% 29% 6% 2021F 2021 3% Revenue Reserves by Metal1 27% by Metal2 58% 48% 1. Revenue by Metal assumes realized metal prices for 1H 2021 and the following metal prices for the remainder metal reflect the Company's 2021 mineral reserve estimates announced in
Slide 9: $740.4M Total Available Liquidity
9 Cash + Short Term Investments // Prudent balance sheet management reduces risk, improves $240.4M long-term shareholder returns TOTAL AVAILABLE LIQUIDITY $740.4M Balance sheet management √ Total debt2 of $47.7M related to equipment leases and construction loans Revolving Credit Facility $500.0M √ S
Slide 10: FCF Allocation 2010 – Q2 2021
10 9%Share 24% Repurchases Dividends // $1.6B in FCF generated since 2010, returning $529M to shareholders 3 and investing $611M in expansions FCF 28% ALLOCATION Debt Repayment 2010 – Q2 2021 Cash Flow Priorities 1 Maintain balance sheet flexibility, with low to zero debt 39% Expansion 2 Invest in h
Slide 11: Production and cash flow back-end loaded in 2021
11 // Production and cash flow back-end loaded in 2021 • Resolved ventilation constraints at La Colorada in July 2021, allowing throughput and grades to improve going forward. PRODUCTION • Current air flow of ~750,000 cfm is the highest in the mine’s history Silver: 20.5 – 22.0 Moz • Reduction in he
Slide 12: Supporting long-life production from veins and future development of Skarn
12 // Supporting long-life production from veins and future development of Skarn • New surface to 345 level primary ventilation raise in service. In July 2021, cleared the blockage that formed during Q1 2021 commissioning. • Rehabilitation of two other main ventilation raises completed in Q3 2021. V
Slide 13: La Colorada Skarn, Zacatecas, Mexico
13 ZACATECAS, MEXICO // Estimated to contain 141 million ounces of silver • Deposit located adjacent and below the producing mine • Laboratory bench-scale metallurgical tests show positive polymetallic flotation recoveries • Advancing infill drilling, metallurgical & environmental studies, & prelimi
Slide 14: Investments: MMX, NUAG, Peru and Mexico projects
14 (MMX) (NUAG) (Peru) (Mexico) Pan American owns an ~17% Pan American owns a ~9.5% undiluted Pan American holds a free carried JV agreement with Radius Gold whereby Pan undiluted interest in this precious interest in NUAG, which is advancing interest of 25% to commercial American can earn an initia
Slide 15: PAAS Snapshot and Investment Highlights
15 // PAAS SNAPSHOT 1 // INVESTMENT HIGHLIGHTS ~$5.5 B $0.10 MARKET CAP QUARTERLY DIVIDEND2 Long-life silver reserves 210.3 M 1.5% SHARES OUTSTANDING DIVIDEND YIELD Major catalysts for silver growth 2.1 M 10 3-MONTH DAILY SELL SIDE Experienced management team AVERAGE ANALYSTS Strong financial positi
Slide 16: Investor Relations Contact
16 Siren Fisekci VP, INVESTOR RELATIONS & CORPORATE COMMUNICATIONS +1.604.806.3191 ir@panamericansilver.com PanAmericanSilver.com Suite 1440, 625 Howe Street Vancouver, BC, V6C 2T6
Slide 17: Appendix
PAN AMERICAN APPENDIX
Slide 18: 2021 Guidance: Annual Production
18 Annual Production production and cash 1. Cash Costs and AISC are non-GAAP measures. Please refer to the section flow back-end Silver - Moz 20.50 – 22.00 “Alternative Performance (Non-GAAP) Measures” of the Q2 2021 MD&A for a detailed description of these measures and where appropriate a reconcili
Slide 19: Silver and Gold Production by Mine
19 Silver Production Gold Production (ounces ‘000s) (ounces ‘000s) Q2 2021 H1 2021 Q2 2021 H1 2021 La Colorada 1,099 2,164 0.7 1.2 Huaron 903 1,787 0.3 0.6 Morococha(1) 568 1,089 0.3 0.4 San Vicente(2) 601 1,302 0.1 0.2 Manantial Espejo 635 1,333 8.1 14.0 Dolores 612 1,246 43.3 80.3 Shahuindo 54 119
Slide 20: Cash Costs and AISC
20 Cash Costs(1) AISC(1) 1. Cash Costs and AISC are non-GAAP measures. Please refer to the “Alternative Performance (Non-GAAP) Measures” section of the ($ per ounce) ($ per ounce) MD&A for the period ended June 30, 2021 for a detailed description of these measures and where appropriate a reconciliat
Slide 21: Realized Metal Prices and Quantities of Metal Sold
21 Realized Metal Prices(1) Quantities of Metal Sold(2) Q2 2021 H1 2021 Q2 2021 H1 2021 Silver $26.88 $26.66 4,044 7,534 Gold $1,809 $1,798 126.2 262.2 Zinc $2,935 $2,849 11.9 23.0 Lead $2,151 $2,096 4.3 8.2 Copper $9,679 $9,076 1.6 3.4 1. Metal price stated as dollars per ounce for silver and gold,
Slide 22: Q2 2021 Financial Highlights
22 unaudited in millions of US$, except per share amounts Q2 2021 H1 2021 Revenue 382.1 750.2 Mine operating earnings 103.0 193.0 Net income 71.2 63.7 Basic income per share(1) 0.34 0.30 Adjusted income(2) 46.6 84.1 Basic adjusted income per share(1)(2) 0.22 0.40 Net cash generated from operating ac
Slide 23: Highlights of 2020 silver market
23 // 2020 actuals; in million ounces Highlights of 2020 silver market • Silver investment rose, as investors gravitated to safe-haven investments. Mine production 784.4 Recycling 182.1 • Global holdings of silver-backed exchange-traded products (ETP) rose to a record 1.1 billion ounces Other 9.7 •
Slide 24: Growing industrial demand from decarbonization and electrification
24 // 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. • ~10% of silver supply used for photovoltaics (solar pane
Slide 25: Escobal: One of the world's best silver mines
25 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 26: Navidad: One of the largest undeveloped primary silver deposits
26 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 27: La Colorada: Largest silver producing mine
27 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 28: Dolores: Large gold / silver mine
28 Dolores CHIHUAHUA, MEXICO // Large gold / silver Mine • 100% owned and operated • Mining is by open pit and underground methods 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
Slide 29: Huaron: Polymetallic silver mine
29 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 • Mechanization of mining methods has improved efficiency and reduced operating
Slide 30: Morococha: Polymetallic silver mine
30 YAULI, PERU Morococha // Polymetallic silver mine • 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 • Mechanization of mining methods has improved efficiency and reduced operat
Slide 31: San Vicente: Polymetallic silver mine
31 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 improv
Slide 32: Underground mines in Santa Cruz, Argentina
32 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 Manantial Espejo the Manantial Espejo plant • Average throughput capacity of 2,150 tpd, treating ore by gravity concentration, agitation
Slide 33: Shahuindo: Large gold mine with growth potential
33 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 34: La Arena: Gold mine with sulphide expansion potential
34 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 expans
Slide 35: Timmins: Two producing mines in Canadian mining camp
35 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 1
Slide 36: Proven and Probable Reserves by Property
36 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 6.9 164 36.6 0.70 48.5 1.46 101.2 2.95 204.3 Probable 3.6 171 19.8 0.31 11.1 1.73 62.4
Slide 37: Measured and Indicated Resources by Property
37 Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag Au (g/t) Contained Au Cu (%) Pb (%) Zn (%) (Moz) (koz) Silver Segment Huaron Peru Measured 1.9 162 9.9 0.21 1.63 3.11 Indicated 2.5 154 12.1 0.67 1.55 2.78 Morococha (92.3%) (3) Peru Measured 0.6 134 2.4 0.61 0.82 2.64 Indicated 0
Slide 38: Inferred Resources by Property
38 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 5.8 153 28.6 0.43 1.51 2.73 Morococha (92.3%) (3) Peru Inferred 4.8 143 21.9 0.39 1.09 3.29 La Colorada Mexico Inferred 8.4 190 51.1 0.15 4
Slide 39: Metal price assumptions as of June 30, 2021
39 Mine Category Ag US$/oz Au US$/oz Cu US$/t Pb US$/t Zn US$/t Huaron All categories 18.00 1,300 6,500 2,000 2,450 Morococha All categories 18.00 1,300 6,500 2,000 2,450 La Colorada All categories 18.00 1,300 6,500 2,000 2,450 La Colorada skarn All categories 18.50 6,500 2,200 2,600 Reserves 18.00
Slide 40: Mineral reserves and resources notes
40 Mineral reserves and 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 not min
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