Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (August 2024)
52 slides from Pan American Silver's investor presentation, August 2024
Slide 1: The World's Premier Silver Mining Company
THE WORLD'S PREMIER SILVER MINING COMPANY NYSE | TSX PAAS PRESENTATION // AUGUST 2024
Slide 2: Cautionary Note and Non-GAAP Measures
2 operating mines; statements regarding the investments in capital projects, and base metal prices; fluctuations in prices for energy inputs, labour, materials, including at Jacobina, La Colorada, Huaron and Timmins, and any anticipated supplies and services (including transportation); fluctuations
Slide 3: Cautionary Note Continued: Not an Offer or Solicitation
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 5% • 2 catalysts with potential for material 8% 24% silver growth: La Colo
Slide 5: The go-to name for investing in silver
55 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 Navid
Slide 6: Silver reserves, resources and production versus 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 Endeavour $20 Silver Silvercrest 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: Strong total shareholder returns over 10-year period
8 // Plus, delivered strong total shareholder returns over 10-year period 1-Year Share Price Correlation to Silver Price 1 (%) 10-Year Total Shareholder Returns 2 Pan American 76% Aya 468% Hecla 73% Pan American 53% MAG 68% Hecla 47% First Majestic 65% MAG 23% Endeavour Silver Endeavour 64% Hochschi
Slide 9: Growing industrial demand from decarbonization and electrification
9 // Growing industrial demand from global transition to decarbonization and electrification 2024E Silver Market Dynamics 1 Electrical Applications Silver Demand (Moz) 486 445 351 371 Photography & Other 322 Recycling 2% 18% Investment2 17% Silver Silver Supply Demand 2020 2021 2022 2023 2024F 1.00
Slide 10: Silver Market Total Supply and Demand
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 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 ➢
Slide 12: Total available liquidity of $1,119M
12 Cash + short-term Revolving investments Credit TOTAL AVAILABLE $369M Facility LIQUIDITY Cash + short-term investments of $369M $750M $1,119M3 Total debt2 of $809.5M 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 $893M to shareholders since 2010
13 // Returned $893M 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: production and costs
14 // forecasting an increase in silver and gold production relative to 2023 and strong performance on costs 2 Ag Au 21.0 – 23.0 Moz3 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 CA
Slide 15: Asset divestitures: cash proceeds plus NSR royalties
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 and reduced expenses
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 Underground Mine Zacatecas, Mexi
Slide 18: Improved ventilation following new infrastructure completion
18 // Significant improvement in mine ventilation conditions following on-schedule completion of new infrastructure in July 2024 Two 2,000 horsepower ventilation fans installed at the surface of the Guadalupe shaft – a 5.5 metre by 580 metre deep, fully concrete-lined ventilation shaft Click here to
Slide 19: La Colorada Skarn Preliminary Economic Assessment Highlights
19 19 ZACATECAS, MEXICO // Preliminary Economic Assessment Highlights • Production averaging 17.2 Moz of silver, 427 kt of zinc and 218 kt 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 exploration upside
Slide 20: Mineralization concentrated in 3 zones
20 // Mineralization 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 as 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 as 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: First quartile of the zinc cost curve
23 // It would also rank in the first quartile of the cost curve Zinc Total Production Cost Curve in 2023 1 (kt, ₵ / lb) – inclusive of depreciation Production (%) 0% 25% 50% 75% 100% 200.00 Kazzinc Consolidated Dugald River McArthur River La Colorada Skarn2 Total Production Cost (¢/lb) 150.00 Rampu
Slide 24: Escobal: one of the world's best silver mines
24 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 25: Escobal license suspended pending ILO 169 consultation
25 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 26: Jacobina mine overview
26 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 27: Royalties and non-core project interests
27 ➢ 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 28: ESG ratings and rankings
28 Reporting Frameworks and Standards ESG Ratings and Rankings 60 BBB RATING Ranked top 9th Ranked Top 50th Percentile in the Metals percentile & Mining industry Memberships and Associations Scale: 0 (worst) Scale: CCC (worst) to 100 (best) to AAA (best) 24.2 (MEDIUM RISK) Environment: 3 Ranked Top
Slide 29: PAAS Snapshot
29 // PAAS SNAPSHOT 2 $7.1 B $0.10 MARKET CAP QUARTERLY DIVIDEND3 Analyst Coverage1 363.0 M 2.0% SHARES BofA Global Research (Lawson Winder) OUTSTANDING DIVIDEND YIELD Edison Group (Andrey Litvin) Jefferies (Matt Murphy) $95 M 9 AVERAGE DAILY SELL SIDE RBC Capital Markets (Michael Siperco) TRADING V
Slide 30: Appendix
PAN AMERICAN APPENDIX
Slide 31: Q2 2024 financial and production summary
31 Q2 2024 FINANCIAL (in millions of US$, except per share amounts) Revenue 686.3 Cost of Sales1 569.4 Mine operating earnings 116.9 Net loss (21.4) Basic loss per share2 (0.06) Adjusted earnings3 40.0 Basic adjusted earnings per share2,3 0.11 Net cash generated from operating activities 162.7 Net c
Slide 32: 2024 production and cost outlook by mine
32 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 33: 2024 capital expenditures outlook
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: El Peñon mine overview
36 Opportunities MINE OVERVIEW Au Ag District-scale potential resulting from continued 120 - 135 koz Au exploration of the rhyolitic level 3.6 – 3.9 Moz Ag TYPE LOCATION OWNERSHIP 2024F Production(1) Continue infill drilling to confirm reserve grades Underground Mine Antofagasta, Chile 100% ~3,650 t
Slide 37: Huaron mine overview
37 Opportunities MINE OVERVIEW Ag Zn Pb Cu 3.5 – 3.8 Moz Continue development and exploration of 2024F Ag Production(1) TYPE LOCATION OWNERSHIP the Horizonte zone Underground Mine Pasco, Peru 100% ~2,550 tpd Improve electricity efficiency and lower costs 2024F Plant Throughput(1) • Huaron is an unde
Slide 38: Shahuindo mine overview
38 Opportunities MINE OVERVIEW Au Ag 122 - 144 koz Expected leach recovery increase over LOM 2024F Au Production(1) TYPE LOCATION OWNERSHIP based on metallurgical testing Open-Pit Mine Cajamarca, Peru 100% ~33,840 tpd Completion of leach pads and waste 2024F Plant Throughput(1) dumps facilities by 2
Slide 39: Timmins mine overview
39 Opportunities MINE OVERVIEW Au New tailings facility and completion of 125 – 135 koz paste fill plant at Bell Creek 2024F Au Production(1) TYPE LOCATION OWNERSHIP Exploration and development Underground Mine Ontario, Canada 100% opportunities at Whitney and deep Bell ~4,240 tpd Creek 2024F Plant
Slide 40: San Vicente mine overview
40 Opportunities MINE OVERVIEW Ag Zn Pb Cu 2.9 – 3.1 Moz Maintain consistent steady-state 2024F Ag Production(1) TYPE LOCATION OWNERSHIP production Underground Mine Potosi, Bolivia 95% ~1,030 tpd Near mine exploration on the western 2024F Plant Throughput(1) portion of the Union Vein; veins and geop
Slide 41: Minera Florida mine overview
41 Opportunities MINE OVERVIEW Au Ag Zn Ongoing exploration of the core mine down dip and laterally. Continued near- 85 – 96 koz Au site exploration to the east and at depth 2024F Ag Production(1) TYPE LOCATION OWNERSHIP where the veins are under-explored Underground Mine Metropolitan Region, Chile
Slide 42: Cerro Moro mine overview
42 MINE OVERVIEW Opportunities Ag Au Gold production is expected to increase in 3.2 – 3.5 Moz Ag Q4 2024 with the mining of the high grade 93 – 115 koz Au Naty Zone 2024F Production(1) TYPE LOCATION OWNERSHIP Possible reduction in costs will allow us to Open-Pit & Santa Cruz, Argentina 100% convert
Slide 43: Dolores mine overview
43 MINE OVERVIEW Au Ag 65 – 75 koz Au 1.9 – 2.2 Moz Ag TYPE LOCATION OWNERSHIP 2024F Production(1) Open-Pit Mine Chihuahua, Mexico 100% Production & Cost History $1,275 – $1,375 2024F Au AISC(1,2) • Dolores is an open-pit mine that produces gold and silver dore using a $2,065 novel pulp agglomeratio
Slide 44: Navidad: one of the largest undeveloped primary silver deposits
44 44 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 45: La Colorada Skarn mineral resource estimate
45 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 46: La Colorada Skarn 50,000 tpd case
46 // 50,000 tpd case Construction period 6 years Production mine life 17 years Notes: Production rate 50 ktpd (or 18.25 Mtpa) 1. Assumes metal prices of $2,800 per tonne of zinc, $2,200 per Mineable inventory 284.7 million tonnes tonne of lead, and $22.00 per ounce of silver. Average annual silver
Slide 47: Proven and probable mineral reserves
47 As of June 30, 20231,2 Tonnes Ag Contained Au Contained Cu Contained Contained Contained (1) See table below entitled Property Location Classification Pb (%) Zn (%) (Mt) (g/t) Ag (Moz) (g/t) Au (Koz) (%) Cu (Kt) Pb (Kt) Zn (Kt) "Metal price assumptions Silver Segment used to estimate mineral Huar
Slide 48: Measured and indicated mineral resources
Pan American Silver Corporation Measured and Indicated Mineral Resources as of June 30, 20231,2,3 48 Tonnes Contained Contained Property Location Classification (Mt) Ag (g/t) Ag (Moz) Au (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Huaron Peru Measured 1.4 180 8.2 0.30 1.95 3.15 Indicated 1.8 173 10.2 0.30 1
Slide 49: Inferred mineral resources
49 as of June 30, 20231,2,3 Pan American Silver Corporation Inferred Mineral Resources as of June 30, 20231,2,3 Tonnes Ag Contained Au Contained Property Location Classification (Mt) (g/t) Ag (Moz) (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Silver Segment Huaron Peru Inferred 5.9 164 31.2 0.35 1.76 2.87 1.
Slide 50: Metal price assumptions for reserves and resources
50 Metal Price Assumptions Used to Estimate Mineral Reserves and Mineral Resources as of June 30, 2023 Property Category Ag US$/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 51: Mineral reserves and resources notes
51 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 52: Investor relations contact
52 Siren Fisekci VP, INVESTOR RELATIONS & CORPORATE COMMUNICATIONS +1.604.806.3191 | ir@panamericansilver.com panamericansilver.com Suite 2100, 733 Seymour St Vancouver, BC, V6B 0S6
Pan American Silver — Investor Presentation (August 2024) on 6ix