Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Merger or Acquisition (November 2018)
42 slides from Pan American Silver's merger presentation, Nov 14, 2018
Slide 1: The World's Premier Silver Mining Company
The World’s Premier Silver Mining Company November 14, 2018
Slide 2: Cautionary Note
Cautionary Note Non‐GAAP Measures This presentation of Pan American Silver Corp. (“Pan American”) and Tahoe Resources Inc. (“Tahoe”) refers to various non‐GAAP measures, such as cash costs per payable ounce of silver, net of by‐product credits (“Cash Costs”), all‐in sustaining cost per silver ounce
Slide 3: Cautionary Note About Mineral Reserves and Resources
Cautionary Note About Mineral Reserves and Resources Cautionary Note to US Investors Concerning Estimates of Mineral Reserves and Resources (Pan American Silver) This presentation has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of
Slide 4: Transaction Details
The World’s Premier Silver Mining Company Transaction Details Pan American Silver and Tahoe Resources to combine, creating the world’s premier silver mining company • Pan American Silver (“Pan American”) to acquire Tahoe Resources (“Tahoe”) via Plan of Arrangement • Unanimous support of Pan American
Slide 5: New Pan American – The World's Premier Silver Mining Company
New Pan American – The World’s Premier Silver Mining Company World class primary silver asset portfolio with the largest silver reserve base An industry leader in high margin / low cost production Robust growth profile with Escobal restart, expansion potential at La Colorada following Pan Americ
Slide 6: A Compelling Transaction for All Shareholders
The World’s Premier Silver Mining Company A Compelling Transaction for All Shareholders • Acquisition of one of the most attractive silver mines in the world − Escobal produced 21Moz of Ag at US$8.63/oz Ag AISC during the last four quarters of uninterrupted production1 • Escobal is a well built, pro
Slide 7: Escobal: One of The World's Best Silver Mines
The World’s Premier Silver Mining Company Escobal: One of The World’s Best Silver Mines World Class Silver Mine High quality, well built operation with over US$500 million invested1 One of the world’s largest primary silver deposits with reserves of 264Moz One of the world’s largest primary silv
Slide 8: A More Geographically Diversified Portfolio
The World’s Premier Silver Mining Company A More Geographically Diversified Portfolio Shahuindo La Arena Huaron Morococha Bell Creek Timmins West San Vicente Dolores La Colorada Navidad Pro‐Forma Segmented Revenue Profile1 Manantial Espejo Escobal Bolivia Argentina 4% 7% Peru Pan American Assets Can
Slide 9: Maintaining Silver Exposure While Doubling Silver Reserves
The World’s Premier Silver Mining Company Maintaining Silver Exposure While Doubling Silver Reserves Reserve Value by Commodity1 Pan American New Pan American Pb Cu 5% 2% Pb Cu 6% 5% Zn 12% Zn 17% 593 Moz AgEq Ag 1,205 Moz AgEq Ag 49% 48% (288 Moz Ag) (576 Moz Ag) Au 23% Au 33% Transaction increases
Slide 10: New Pan American Will Be an Industry Leader Across Key Metrics
The World’s Premier Silver Mining Company New Pan American Will Be an Industry Leader Across Key Metrics The most significant reserve base Enhances leading position in silver resources Silver Reserves (Moz Ag) M&I Silver Resources (Moz Ag) 17% Increase 700 100% Increase 1,000 560 800 420 600 280 400
Slide 11: New Pan American Will Have an Enviable Reserve Position Relative to Peers
The World’s Premier Silver Mining Company New Pan American Will Have an Enviable Reserve Position Relative to Peers Silver Comparables – Reserve Value by Commodity1 New Pan American – Reserve Value by Commodity1 Fresnillo Hecla Pb Pb 5% Cu 5% Pb 2% Zn 14% 12% Ag Ag 32% Zn 33% 1,502 Moz (502 Moz Ag)
Slide 12: New Pan American Will be the Largest, Widely-Traded Silver Mining Company
The World’s Premier Silver Mining Investment New Pan American Will be the Largest, Widely‐Traded Silver Mining Company The largest widely‐traded silver mining company by free float Free Float Value1 (US$m) $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 New Pan American Fresnillo Hecla Coeur Hochs
Slide 13: Tahoe's Gold Assets
The World’s Premier Silver Mining Company Tahoe’s Gold Assets Shahuindo, La Arena (Peru), Key Assets: Well built, well run, modern operations in Timmins (Canada) stable jurisdictions Combined 442koz Au 2017 Production: Combined 47% 2017 Gross Margin: Significant production Combined Reserves: 3,4
Slide 14: Integration Plan
The World’s Premier Silver Mining Company Integration Plan • Support the Court Mandated Consultation Process − Four‐stage Indigenous Consultation Process including: Review, Pre‐Consultation, Consultation and Court Verification • Complete Court Mandated Administrative Matters − Developing strategy to
Slide 15: Escobal Mining License: Indigenous Consultation Process
The World’s Premier Silver Mining Company Escobal Mining License: Indigenous Consultation Process Supreme Court Review Pre‐Consultation Consultation Verification • Minera San Rafael (“MSR”) • Moderated by the • Moderated by MEM • MEM to submit results of the to work with 2011 Guatemalan Ministry of
Slide 16: Past Results are the Best Predictor of Future Results
The World’s Premier Silver Mining Company Past Results are the Best Predictor of Future Results Ag Production (Moz) Quiruvilca: Alamo Dorado: 80.0 • Acquired in 1995 • Acquired in 2003 • Achieved profitability in 1996 following 6 • Completed construction in only 1 year, Future growth to come from: c
Slide 17: A Leader in Responsible Mining
The World’s Premier Silver Mining Company A Leader in Responsible Mining Culture of Social Responsibility and Environmental Performance Track Record of Success in Latin America Transparent Sustainability Reporting 25 years of building trust with local communities and • Based on annual consultation p
Slide 18: Transaction Overview
The World’s Premier Silver Mining Company Transaction Overview Proposed • Pan American to acquire Tahoe via Plan of Arrangement Transaction • Implied equity value of US$1,288 million • Base Purchase Price: US$3.40 per Tahoe share payable at closing, representing an immediate 34.9% premium to Tahoe’s
Slide 19: Transaction Overview (Cont'd)
The World’s Premier Silver Mining Company Transaction Overview (Cont’d) • Transaction has the unanimous approval of the Board of Directors of both Pan American and Tahoe • Subject to approval of 66 2/3% of Tahoe’s shareholders and (1) a simple majority of Pan American's shareholders and (2) 66 2/3%
Slide 20: Strong Balance Sheet Pro-Forma
The World’s Premier Silver Mining Company Strong Balance Sheet Pro‐Forma Exchange (exchange) TSX / NASDAQ TSX / NYSE / FRA TSX / NASDAQ Share Price (C$/share) $18.71 $2.90 $18.71 Trading Share Price (US$/share) $14.13 $2.20 $14.13 Shares Outstanding (m) 153.3 314.2 209.4 CVR (m) ‐ ‐ 15.6 Cash & Equi
Slide 21: New Pan American – The World's Premier Silver Mining Company
New Pan American – The World’s Premier Silver Mining Company World class primary silver asset portfolio with the largest silver reserve base An industry leader in high margin / low cost production Robust growth profile with Escobal restart, expansion potential at La Colorada following Pan Americ
Slide 22: Pan American Silver contact details
Suite 1440, 625 Howe Street, V6C 2T6 – Vancouver, BC Panamericansilver.com ir@panamericansilver.com 22 November 14, 2018
Slide 23: Appendix
Appendix RESOURCES™
Slide 24: Shahuindo
Shahuindo Sizeable Gold Mine with Significant Growth Potential • 100% owned open pit gold mine located in Northern Peru producing silver by‐products from dore • Heap leach processing • Commercial production began in 2016 with current estimated mine life until 2028 • Significant exploration opportuni
Slide 25: La Arena
La Arena Producing Gold Mine with Sulphide Expansion Potential • 100% owned open pit gold mine located in Peru producing dore • Run‐of‐mine heap leach currently processing 36ktpd • Commercial production began in 2011 with estimated mine life until 2021 • PEA released in February 2018 on sulphide exp
Slide 26: Timmins Mines
Timmins Mines Two Producing Mines in Prolific Canadian Mining Camp • The Timmins mines are comprised of the 100% owned Timmins West and Bell Creek mines, both of which are located near Timmins, Ontario • Underground gold operation with an estimated mine reserve life until 2024, producing dore • Leac
Slide 27: La Colorada
La Colorada Pan American’s Largest Silver Producing Mine with Significant Growth Potential • La Colorada is an underground mine located in Zacatecas, Mexico • 100% owned and operated by Pan American • Epithermal silver deposit, with transition at depth to a base metal predominant system • Currently
Slide 28: La Colorada – Recent Discovery
La Colorada – Recent Discovery Pan American’s Major Exploration Discovery at La Colorada • Successful exploration drilling at La Colorada has discovered wide La Colorada Cross Section zones of mineralization below the current production levels • High grade mineralization in limestone replacement man
Slide 29: Dolores
Dolores Large Silver/Gold Mine • The Dolores mine is 100% owned and operated by Pan American • Low sulphidation epithermal deposit with strong structural control. Silver and gold mineralization is hosted in hydrothermal breccias and sheeted vein zones Dolores • Mining at Dolores is by standard open
Slide 30: Huaron
Huaron Polymetallic Silver Mine • The Huaron underground mine is 100% owned and operated by Pan American • Huaron is a hydrothermal polymetallic deposit of silver, lead, zinc, and copper occurring in veins, mantos and disseminated volcanic intrusions Peru • The mine operates at 2,500 tpd using flota
Slide 31: Morococha
Morococha Polymetallic Mine with Significant By‐Product Credits • The Morococha underground mine is 92.3% owned and operated by Pan American • Polymetallic mineralization comprising silver, lead, zinc, and copper • Mineralization includes epithermal veins, mantos and replacements ore bodies Peru • M
Slide 32: San Vicente
San Vicente Polymetallic Silver‐Zinc Mine • The San Vicente underground mine is 95% owned and operated by Pan American • Hydrothermal polymetallic deposit consisting of replacement veins in pre‐existing faults, replacements in conglomerates, and mineralization in dacitic dykes • The San Vicente plan
Slide 33: Manantial Espejo
Manantial Espejo Providing Support to the Development of the Joaquin and COSE Projects • The Manantial Espejo underground mine is 100% owned and operated by Pan American • Low sulphidation, silver‐gold epithermal deposit • Ore is treated by gravity concentration, agitation leaching and Merril Crowe
Slide 34: Navidad
Navidad One of The World’s Largest Undeveloped Primary Silver Deposits • 100% owned silver mine located in Chubut Province in Argentina • Pan American gained control of the project in 2010 through the acquisition of Aquiline Resources • The project currently comprises eight individual mineral deposi
Slide 35: Pan American Silver Proven and Probable Reserves at December 31, 2017
Pan American Silver Proven and Probable Reserves at December 31, 2017 (1) (2) Property Location Category Tonnes Ag Contained Ag Au Contained Au Cu Pb Zn (Mt) (g/t) (Moz) (g/t) (koz) (%) (%) (%) Huaron Peru Proven 5.7 167 30.8 0.47 1.43 2.95 Probable 4.0 169 21.7 0.47 1.55 2.91 Morococha (92.3%) (3)
Slide 36: Pan American Silver Measured and Indicated Resources
Pan American Silver Measured and Indicated Resources (1)(2) Property Location Category Tonnes Ag Contained Ag Au Contained Au Cu Pb Zn (Mt) (g/t) (Moz) (g/t) (koz) (%) (%) (%) Huaron Peru Measured 2.2 162 11.3 0.22 1.58 3.00 Indicated 1.5 167 7.9 0.28 1.66 3.20 Morococha (92.3%) (3) Peru Measured 0.
Slide 37: Pan American Silver Inferred Resources
Pan American Silver Inferred Resources(1)(2) Property Location Category Tonnes Ag Contained Ag Au Contained Au Cu Pb Zn (Mt) (g/t) (Moz) (g/t) (koz) (%) (%) (%) Huaron Peru Inferred 6.6 163 34.5 0.41 1.51 2.76 Morococha (92.3%) (3) Peru Inferred 4.4 148 21.0 0.62 1.12 3.31 La Colorada Mexico Inferre
Slide 38: Tahoe Resources Mineral Reserves as of January 1, 2018
Tahoe Resources Mineral Reserves as of January 1, 2018 Proven Probable Proven & Probable Gold Location Ownership Tonnes Grade Metal Tonnes Grade Metal Tonnes Grade Metal (M) (g/t) (koz) (M) (g/t) (koz) (M) (g/t) (koz) Bell Creek Canada 100% 0.5 3.90 68 1.9 4.12 246 2.4 4.07 315 Escobal Guatemala 100
Slide 39: Tahoe Resources Mineral Resources as of January 1, 2018
Tahoe Resources Mineral Resources as of January 1, 2018 Measured Indicated Measured & Indicated Inferred Gold Location Ownership Tonnes Grade Metal Tonnes Grade Metal Tonnes Grade Metal Tonnes Grade Metal (M) (g/t) (koz) (M) (g/t) (koz) (M) (g/t) (koz) (M) (g/t) (koz) Bell Creek Canada 100% 1.2 4.43
Slide 40: Tahoe Resources January 1, 2018 Mineral Reserve and Mineral Resource Notes
Tahoe Resources January 1, 2018 Mineral Reserve and Mineral Resource Notes 1. Technical information in this document has been approved by Tom Fudge, Vice President Operations, Tahoe Resources Inc., a Qualified Person as defined by NI 43‐101. 2. Mineral Resource estimates are classified as Measured,
Slide 41: Tahoe Resources January 1, 2018 Mineral Reserve and Mineral Resource Notes
Tahoe Resources January 1, 2018 Mineral Reserve and Mineral Resource Notes 9. Timmins West – The basis of the Timmins West Mine Mineral Resource and Mineral Reserve estimates is from NI 43‐101 Technical Report, Timmins West Mine, Timmins, Ontario, Canada, dated September 20, 2017. Mineral Resources
Slide 42: Tahoe Resources January 1, 2018 Mineral Reserve and Mineral Resource Notes
Tahoe Resources January 1, 2018 Mineral Reserve and Mineral Resource Notes The Mineral Resource and Mineral Reserve estimates contained in this document have been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United Sta
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