Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Q3 2022 Earnings Presentation
28 slides from Pan American Silver's earnings presentation, Nov 10, 2022
Slide 1: Conference Call November 10, 2022
1 CONFERENCE CALL // NOVEMBER 10, 2022
Slide 2: Cautionary note and non-GAAP measures
2 our sustaining and project capital expenditures in 2022; the anticipated timing for diesel and certain consumables, as well as the impacts related to for metals production and sales, including the expectation with respect to disruptions in the supply chain; that the COVID-19 pandemic, or other pro
Slide 3: Not an offer or solicitation
3 CONTINUED NOT AN OFFER OR A SOLICITATION regulations. The requirements of NI 43-101 for the identification of “reserves” are also not the same as those of the SEC, and mineral reserves reported by Inflationary pressures and the potential for economic recessions; the duration THIS PRESENTATION DOES
Slide 4: On track to meet 80% of our 2022 ESG goals
4 NASDAQ: PAAS // TSX: PAAS On track to meet 80% of our 2022 ESG Adj. net loss of $2.8 million or $0.01/share1 goals Silver production of 4.5 Moz and gold Guidance on gold production reaffirmed, production of 128.8 Koz while silver production now expected to be between 18.0 and 18.5 Moz in 2022 Gene
Slide 5: Pan American Silver & Agnico Eagle offer to acquire Yamana Gold
PAN AMERICAN SILVER CORP. & AGNICO EAGLE MINES LIMITED OFFER TO ACQUIRE YAMANA GOLD
Slide 6: Transaction summary
6 TRANSACTION SUMMARY ➢ Total consideration of US$4.8 billion or US$5.02 per Yamana share (as of Nov. 4, 2022 announcement of binding proposal) Offer Price & Consideration ➢ Comprised of US$1.0 billion in cash funded by Agnico Eagle, ~36.1 million Agnico Eagle shares and ~153.5 million Pan American
Slide 7: Transformational and strategic transaction for Pan American
TRANSFORMATIONAL AND STRATEGIC TRANSACTION FOR PAN AMERICAN 7 ➢ Significantly improved trading liquidity (+50%)(1) with pro-forma US$5.6B(2) market capitalization TRANSFORMATIONAL ➢ Meaningful impact on production TRANSACTION ▪ Increase in annual silver production of ~9.5Moz (+59%)(3) ▪ Increase in
Slide 8: Anticipated pro forma portfolio with operations in the Americas
PAN AMERICAN’S ANTICIPATED PROFORMA PORTFOLIO WITH 12 OPERATIONS IN THE AMERICAS 8 CANADA Assets to be Acquired by Pan American Timmins Asset Jurisdiction Currently Producing Jacobina (100%) Brazil ✓ El Peñón (100%) Chile ✓ Dolores Minera Florida (100%) Chile ✓ La Colorada Cerro Moro (100%) Argentin
Slide 9: Significantly increases pro forma production profile
9 SIGNIFICANTLY INCREASES PAN AMERICAN’S PROFORMA PRODUCTION PROFILE 2 0 2 2 S I LV E R P R O D U C T I O N ( M o z ) (1) 2 0 2 2 G O L D P R O D U C T I O N ( k o z ) (1) 1,080 25.5 Strengthens Pan American’s 16.0 position as the leading 530 Latin American focused silver and gold producer Pan Ameri
Slide 10: Pan American retains strong financial position pro forma
10 PAN AMERICAN RETAINS STRONG FINANCIAL POSITION PRO FORMA 3.2x D E B T / LT M E B I T D A B E N C H M A R K I N G 1.8x 1.8x $181M 1.4x (2) 0.8x Cash & 0.7x 0.6x Cash 0.3x 0.1x Equivalents Hecla First Evolution Fresnillo Pro Forma SSR Endeavour Northern B2Gold TOTAL AVAILABLE Majestic PAAS Mining M
Slide 11: Pan American Silver Q3 2022 Results
PAN AMERICAN SILVER Q3 2022 RESULTS
Slide 12: Revenue and earnings
12 unaudited in millions of US$, except per share amounts Q3 2022 YTD 2022 Revenue 338.9 1,119.3 Mine operating (loss) earnings (21.8) 13.3 Net (loss) earnings (71.2) (168.0) Basic (loss) earnings per share(1) (0.34) (0.80) Adjusted (loss) earnings(2) (2.8) 22.7 Basic adjusted (loss) earnings per sh
Slide 13: Production by mine
13 Silver Production Gold Production (ounces ‘000s) (ounces ‘000s) Q3 2022 YTD 2022 Q3 2022 YTD 2022 La Colorada 1,494 4,589 1.0 2.6 Huaron 855 2,635 0.3 0.7 Morococha(1) — 324 — 0.1 San Vicente(2) 701 1,823 — 0.1 Manantial Espejo 857 2,453 6.4 17.7 Dolores 560 1,651 32.5 102.3 Shahuindo 59 184 35.9
Slide 14: Cash costs and AISC
14 Cash Costs(1) AISC(1) ($ per ounce) ($ per ounce) 1. Cash Costs and AISC are non-GAAP measures. Please refer to the “Alternative Performance (Non-GAAP) Measures” section of the Q3 2022 YTD 2022 Q3 2022 YTD 2022 MD&A for the period ended September 30, 2022 for a detailed description of these measu
Slide 15: Realized metal prices and quantities sold
15 Realized Metal Prices(1) Quantities of Metal Sold(2) Q3 2022 YTD 2022 Q3 2022 YTD 2022 Silver $18.76 $21.72 4,263 13,406 Gold $1,705 $1,813 134.7 402.2 Zinc $3,232 $3,603 8.6 24.5 Lead $1,944 $2,162 4.1 13.0 Copper $7,707 $9,318 0.8 3.6 1. Metal price stated as dollars per ounce for silver and go
Slide 16: Payable metal quantities of inventory
16 Silver Gold Mine/Product Payable Metal Quantities of Inventory Produced(1,2) Metal Sold build/(draw)(3) 35.6 thousand ounces build 6.5 thousand ounces draw Silver (thousand ounces) La Colorada 1,418.4 1,411.4 7.0 Payable Metal Sold Metal Sold Metal Payable Huaron 716.9 766.0 (49.1) 4,263.4 134.7
Slide 17: Growth, business development, and sustaining cash flow performance
17 Growth, Business Development, and Sustaining Cash Flow Performance Other $350 $22 $66 $300 ($46) $241 $238 $250 ($23) ($20) ($1) Millions ($26) $187 $200 ($13) ($12) $150 $100 $50 $0 Cash and STI at Adjusted Net changes in Sustaining capital Dividends paid Net income tax Net other (e.g. Cash and
Slide 18: Sustaining cash flow performance
18 Sustaining Cash Flow Performance Growth, Business Development, and Other $700 $315 $2 $650 $600 $550 $500 ($158) $450 Millions $400 $335 $350 ($121) $287 $8 $300 ($74) $250 ($13) ($56) $187 $200 ($35) $150 ($18) $100 $50 $0 Cash and STI at Adjusted Net other (e.g. Sustaining Net income tax Divide
Slide 19: Q3 2022 basic adjusted net loss
19 // Q3 2022 Basic Adjusted Net Loss $0.01/share (1) Heap inventory net Net loss for the realizable value Severance Unrealized gains on Tax related Adjusted loss for the period expense Investment loss provisions derivatives Other adjustments period $10 $3.6 $0 $4.4 $7.8 ($2.8) -$10 $9.4 -$20 $12.6
Slide 20: Total available liquidity
20 $153.1M Cash and Cash //Prudent balance sheet management reduces Equivalents risk, improves long-term shareholder returns TOTAL AVAILABLE LIQUIDITY $653.1M Balance sheet management √ Total debt(2) of $68.5M related to equipment leases and construction loans Revolving $500.0M Credit √ Sustainabili
Slide 21: Free cash flow since 2010
21 8% Share Repurchases 28% // $1.8B in FCF generated since 2010, returning $644M to shareholders (2) and investing $698M in expansions Dividends 25% Debt $1.8B FCF Repayment(3) 2010 – YTD 2022 Cash Flow Priorities 1 Maintain balance sheet flexibility, with low to zero debt Invest in high-return pro
Slide 22: Annual silver production revised
22 August 2022 November 2022 Original 2022 Revised Operating Revised Operating Annual silver production Operating Outlook Outlook Outlook is revised to between Annual Production 18.0 and 18.5 Moz, while Silver - Moz 19.0 - 20.5 No change 18.0 - 18.5 Gold production is reaffirmed. Gold - koz 550.0 -
Slide 23: Revised operating outlook
23 August 2022 YTD 2022 Annual silver production Revised Operating Outlook Actual is revised to between Annual Production 18.0 and 18.5 Moz, while Silver - Moz 19.0 - 20.5 13.69 Gold production is Gold - koz 550.0 - 605.0 388.1 reaffirmed. Zinc - kt 35.0 - 40.0 28.1 Silver Segment costs Lead - kt 15
Slide 24: Revised operating outlook maintained
24 Expenditures ($ millions) Revised Operating 2022 August 2022 Outlook maintained. Operating Outlook Revised Operating Outlook Sustaining Capital La Colorada 28.0 - 29.0 No change Huaron 16.0 - 19.0 No change San Vicente 7.0 - 8.0 No change Manantial Espejo 2.0 - 3.0 No change Dolores 33.0 - 34.0 N
Slide 25: Revised capital expenditures maintained
25 Expenditures ($ millions) Revised capital August 2022 YTD 2022 expenditures Revised Operating Outlook Actual maintained Sustaining Capital La Colorada 28.0 - 29.0 17.6 Huaron 16.0 - 19.0 10.0 Morococha n/a 0.3 San Vicente 7.0 - 8.0 6.5 Manantial Espejo 2.0 - 3.0 3.6 Dolores 33.0 - 34.0 31.2 Shahu
Slide 26: Environment, social, communities, human capital and inclusion
26 ENVIRONMENT SOCIAL • Achieve zero significant environmental incidents (SEIs) at our operations COMMUNITIES • Improve on bi-annual environmental audit performance • Achieve zero new social disputes at our operations • Reduce water use by 1% compared to the 2022 base case(1) • Resolve all medium an
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Slide 28: Presentation archive
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/