Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (January 2023)
46 slides from Pan American Silver's investor presentation, January 2023
Slide 1: Investor Presentation January 2023
INVESTOR PRESENTATION // JANUARY 2023
Slide 2: Cautionary note and non-GAAP measures
2 our sustaining and project capital expenditures; the anticipated timing for disruptions in the supply chain; that the COVID-19 pandemic, or other metals production and sales, including the timing and amount of any future pandemics, do not materially impact underlying assumptions used in sales of i
Slide 3: Cautionary note continued
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: Annual silver and gold production in line with guidance
4 // Annual silver and gold production in line with guidance Silver Production Gold Production (thousand ounces) (thousand ounces) Q4 2022 FY 2022 Q4 2022 FY 2022 La Colorada 1,339 5,927 0.7 3.3 Huaron 1,025 3,660 0.2 0.9 Morococha(2) -- 324 -- 0.1 San Vicente(3) 703 2,526 -- 0.1 Manantial Espejo 1,
Slide 5: Yamana acquisition transaction terms
5 • Total consideration of US$4.8 billion or US$5.02 per Yamana share (as of Nov. 4, 2022 announcement of binding proposal) • Comprised of US$1.0 billion in cash funded by Agnico Eagle, ~36.1 million Agnico Eagle shares and up to ~156.9 million Pan American shares • Pan American is the purchaser of
Slide 6: Transaction rationale and benefits
6 • Significantly improved trading liquidity (+50%)(1) with pro-forma US$5.6B(2) market capitalization • Meaningful impact on production; for example, on a pro forma basis for 2022, - Annual silver production would have increased by ~9.5Moz(3) - Annual gold production would have increased by ~550koz
Slide 7: Assets to be acquired by Pan American
CANADA Timmins 7 Dolores La Colorada Skarn Deposit MEXICO GUATEMALA Escobal (C&M) Assets to be Acquired by Pan American Pan American Assets Yamana Assets PERU Currently Mining Operations Asset Jurisdiction Producing Shahuindo La Arena BRAZIL Jacobina Jacobina (100%) Brazil ✓ Huaron Morococha BOLIVIA
Slide 8: Yamana LATAM assets reserves, grade and guidance
8 Reserve M&I Resource 2022 Production 2022 Cash 2022 AISC Grade Grade Guidance Cost Guidance Guidance (Au / Ag) (g/t) (Au / Ag) (g/t) Au (koz) Ag (Moz) Au Eq. (US$/oz) Au Eq. (US$/ox) Jacobina 2.18 / -- 2.38 / -- 195 -- $555 $760 Bahia, Brazil El Peñón 4.81 / 151.5 3.13 / 105.7 170 4.2 $660 $885 At
Slide 9: La Colorada Skarn: large polymetallic deposit
9 ZACATECAS, MEXICO // 100% owned, large, polymetallic deposit offers decades of production • 190,000 metres drilled since discovery in October 2018, and additional 44,000 metres completed since cut-off for last resource update as of June 30, 2022 • Skarn footprint of 1,500 metres x 1,100 metres, op
Slide 10: La Colorada new ventilation shaft
LA COLORADA NEW VENTILATION SHAFT \ PAN AMERICAN — silver —
Slide 11: La Colorada Skarn mineral resource
11 ZACATECAS, MEXICO Mining Cut-off Resource Tonnes Zn Pb Ag Zn Pb Ag Method Value Classification (millions) (%) (%) (g/t) (Mt) (Mt) (Moz) (US$/tonne) Indicated 95.9 2.77 1.28 31 2.66 1.23 94.4 Sub-level 45 Caving (SLC) Inferred 147.8 2.29 1.04 28 3.39 1.54 132.9 Notes: 5. Reasonable prospects for e
Slide 12: Mineral resource estimate at different cut-offs and mining methods
12 ZACATECAS, MEXICO // Mineral Resource Estimate at Different Cut-off Values and Mining Methods 1. Prices used to report mineral resources were: US$22 per ounce of silver, US$2,800 per tonne of zinc and US$2,200 per tonne of lead. Mining Cut-off Value Classification Tonnes Zn Pb Ag Zn Pb Ag 2. An e
Slide 13: Skarn mineralisation in 3 zones
13 ZACATECAS, MEXICO // polymetallic skarn mineralisation is concentrated in 3 zones, covering an area of 1,500 metres by 1,100 metres laterally, and a depth of between 600 metres and 1,900 metres below surface
Slide 14: Escobal: one of the world's best silver mines
14 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 15: Escobal ILO 169 consultation process
15 // Escobal mining license suspended pending completion of an ILO 169 Consultation in Guatemala. For more information visit: https://mem.gob.gt/pueblo-indigena-xinka/ PRE-PHASE 1 PHASE 1 PHASE 2 PHASE 3 REVIEW PRE-CONSULTATION CONSULTATION SUPREME COURT VERIFICATION PAS Guatemala shall work Minist
Slide 16: Investments and exploration interests
16 (MMX) (NUAG) (Mexico) (Peru) Pan American owns a ~17% undiluted interest in Pan American owns a ~9.4% JV agreement with Radius Gold: Pan American holds a 100% MMX, representing a market value of US ~$125M1. undiluted interest in NUAG, which Pan American holds a 65% interest interest in La Arena I
Slide 17: ESG frameworks, memberships, ratings and rankings
17 Reporting Frameworks and Standards Ratings and Rankings (as of Jan. 9, 2023) 68 BBB rating Ranked top 7% in the Metals & Upgraded to ‘BBB’ from ‘BB’ in Mining industry November 2021 Memberships and Commitments Scale: 0 (worst) to 100 (best). Scale: CCC (worst) to AAA (best). 27.3 (medium risk) En
Slide 18: PAAS snapshot
18 // PAAS SNAPSHOT 1 ~$3.9B $0.10 MARKET CAP QUARTERLY Long-life silver reserves DIVIDEND2 210.5M 2.1% Major catalysts for silver growth SHARES OUTSTANDING DIVIDEND YIELD Diversified assets 5.1M 10 3-MONTH DAILY SELL SIDE AVERAGE SHARES ANALYSTS Experienced management team MEMBER OF THE MSCI WORLD
Slide 19: Appendix
PAN AMERICAN APPENDIX
Slide 20: $1.8B in FCF generated since 2010
20 8% Share Repurchases 28% // $1.8B in FCF generated since 2010, returning $644M Dividends to shareholders(2) and investing $698M in expansions 25% $1.8B FCF Debt Repayment(3) 2010 – SEPT 30, 2022 Cash Flow Priorities 1 Maintain balance sheet flexibility, with low to zero debt 2 Invest in high-retu
Slide 21: Total available liquidity
21 Cash and Cash Equivalents $181M TOTAL AVAILABLE Pan American has received a commitment LIQUIDITY(1) from a Canadian chartered bank to underwrite an upsized revolving credit $531M facility of up to $750M following closing of the Arrangement and a term loan of up to $500M, for a combined total cred
Slide 22: Annual silver and gold production in line with guidance
22 August 2022 November 2022 Original 2022 Revised Operating Revised Operating Operating Outlook Outlook Outlook Annual Production Silver - Moz 19.0 - 20.5 No change 18.0 - 18.5 Annual silver and Gold - koz 550.0 - 605.0 No change No change gold production in Zinc - kt 35.0 - 40.0 No change No chang
Slide 23: Revised operating outlook maintained
23 Expenditures ($ millions) 2022 August 2022 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 No change Revised Operating Shahuindo 3
Slide 24: Structure and accountability
24 // Structure and Accountability E N V I R O N M E N TA L AND SOCIAL • The Communities and Sustainable Development (CSD) Committee reviews the Company’s 35% sustainability and ESG performance. 15% • The Health, Safety, and Environment (HSE) Committee provides policy direction and oversight of SAFE
Slide 25: Climate change strategy
25 // Climate Change Strategy // 30% reduction in GHG emissions by 2030 and an aspirational objective of net zero by 2050 • Integrating GHG emission reduction strategies into our operational risk and opportunities assessments and strategic planning • Adapting our operating and non-operating mines to
Slide 26: ESG ratings history
26 // As of Jan. 9, 2023 S&P Global 0 (worst) to 100 (best) 23 46 56 68 93 MSCI CCC (worst) to AAA (best) BB BB BBB BBB ~43 Sustainalytics 0 (best) to 100 (worst) 44.0 35.6 31.0 27.3 81 (SEVERE RISK) (HIGH RISK) (HIGH RISK) (MEDIUM RISK) 1 (higher disclosure) to E 10 (lower disclosure) - 5 3 4 1 (hi
Slide 27: Silver supply and demand
27 // 2022 estimate1; in million ounces Mine Photography & Industrial Recycling Production Other Investment2 45% 18% 82% 3% 27% Silver Silver Supply Demand 1,017 1,210 Jewelry & Silverware 25% ~ 194 Moz supply shortfall estimated for 2022 1. Source: Silver Institute, Nov. 18, 2022. 2. Net physical i
Slide 28: Continued growth in silver demand for solar installations
28 // Continued growth in silver demand for solar installations Index is based on silver loadings per cell Source: Metals Focus, EPIA, December 2022
Slide 29: Growing industrial demand from decarbonization and electrification
29 // 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. • ~11% of silver supply used for photovoltaics (solar pane
Slide 30: Navidad: one of the largest undeveloped primary silver deposits
30 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 31: La Colorada: largest silver producing mine
31 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 32: Dolores: large gold/silver mine
32 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 • Expansion completed in 2017 featuring a pulp agglomeration plant to process high-grade ore • Average throughput cap
Slide 33: Huaron: polymetallic silver mine
33 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) Reserves & Resources 3.8 Grade Contained Metal 3.5 Tonn
Slide 34: Morococha: on care and maintenance
34 YAULI, PERU Morococha // On care and maintenance • 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 • Evaluating strategic alternatives for Morococha while placing the operatio
Slide 35: San Vicente: polymetallic silver mine
35 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 36: Manantial Espejo: underground mines in Santa Cruz
36 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 the Manantial Espejo plant • Average throughput capacity of ~2,150 tpd, treating ore by Manantial Espejo gravity concentration, agitatio
Slide 37: Shahuindo: large gold mine with growth potential
37 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 38: La Arena: gold mine with sulphide expansion potential
38 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 expan
Slide 39: La Arena II: undeveloped copper porphyry
39 LA LIBERTAD, PERU La Arena II // 100% owned, undeveloped copper porphyry Reserves & Resources (as of June 30, 2021) Grade Contained Metal Tonnes Au Cu Au Cu (Mt) (g/t) (%) (koz) (kt) M&I Resources 696.3 0.24 0.38 5,280 2,623 Inferred Resources 54.7 0.23 0.29 413 159 Model Highlights & Key Assumpt
Slide 40: Timmins: two producing mines
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 • Shaft upgrade to
Slide 41: Mineral reserves as of June 30, 2022
41 Pan American Silver Corporation Mineral Reserves as of June 30, 2022 (1,2) Tonnes Contained Ag Contained Au Contained Cu Contained Pb Contained Zn Property Location Classification Ag (g/t) Au (g/t) Cu (%) Pb (%) Zn (%) (Mt) (Moz) (koz) (kt) (kt) (kt) Silver Segment Huaron Peru Proven 7.0 169 38.1
Slide 42: Measured and indicated mineral resources as of June 30, 2022
42 Pan American Silver Corporation Measured and Indicated Mineral Resources as of June 30, 2022 (1,2) Contained Ag Contained Au Property Location Classification Tonnes (Mt) Ag (g/t) Au (g/t) Cu (%) Pb (%) Zn (%) (Moz) (koz) Silver Segment Huaron Peru Measured 2.1 163 10.9 0.42 1.58 3.05 Indicated 2.
Slide 43: Inferred mineral resources as of June 30, 2022
Pan American Silver Corporation Inferred Mineral Resources as of June 30, 2022 (1,2) 43 Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag (Moz) Au (g/t) Contained Au (koz) Cu (%) Pb (%) Zn (%) Silver Segment Huaron Peru Inferred 7.2 155 36.1 0.26 1.47 2.73 Morococha (92.3%) (3) Peru
Slide 44: Metal price assumptions for reserves and resources
44 Metal Price Assumptions Used to Estimate Mineral Reserves and Resources as of June 30, 2022 Mine 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 Morococha All categories 19.00 1,300 7,000 2,000 2,600 La Colorada All categories 19.00 1,30
Slide 45: Mineral reserves and resources notes
45 Mineral reserves and mineral 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
Slide 46: Investor relations contact
46 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
Pan American Silver — Investor Presentation (January 2023) on 6ix