Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (May 2023)
51 slides from Pan American Silver's investor presentation, May 2023
Slide 1: Investor Presentation May 2023
INVESTOR PRESENTATION // FEBRUARY 2023 I N V E S T O R P R E S E N TAT I O N // M AY 2 0 2 3
Slide 2: Cautionary Note and Non-GAAP Measures
2 and other metals forecasted for 2023, our estimated Cash Costs, AISC and fluctuations in prices for energy inputs, labour, materials, supplies and services expenditures in 2023; future anticipated prices for gold, silver and other metals (including transportation); fluctuations in currency markets
Slide 3: Cautionary Note Continued
3 CONTINUED herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, NOT AN OFFER OR A SOLICITATION this presentation uses the terms “measured mineral resources”, “indicated mineral resources”, ‘‘inferred mi
Slide 4: Pan American's portfolio in the Americas
4 CANADA Head Office Timmins Dolores La Colorada Skarn Deposit // The acquisition of Yamana Gold Inc. enhanced the scale and quality of MEXICO GUATEMALA Pan American’s portfolio in the Americas, where we have been operating for nearly 3 decades Escobal (C&M) • 4 producing mines: Jacobina, El Peñon,
Slide 5: Assets acquired through the Yamana Transaction
55 // Assets acquired through the Yamana Transaction have a long history of reserve replacement & an extensive exploration portfolio • Significant increase in production from 9-months of ownership in 2023: • Anticipated incremental Silver production of ~7.2M ozs(1) • Anticipated incremental Gold pro
Slide 6: Targeting $40-$60 million in annual post-tax synergies
6 // Targeting $40 - $60 million in annual post-tax synergies Established presence and expertise in Latin America will enable Pan American to leverage operational efficiencies and the growth potential of the acquired Yamana assets in the region Synergies driven by streamlining corporate costs, cross
Slide 7: 2023 guidance: material improvement in production and costs
7 // material improvement in production and costs Ag Au Sustaining capital of $305 - $320 million 21.0 – 23.0 Moz 870 – 970 Koz Project capital of ANNUAL CONSOLIDATED ANNUAL CONSOLIDATED $95 - $105 million PRODUCTION PRODUCTION Reclamation expenditures $10.00 - $12.00 per oz $975 - $1,100 per oz of
Slide 8: Q1 2023 highlights
8 NYSE: PAAS // TSX: PAAS Production and costs in line with Total available liquidity of $733.4M(1) management expectations Released consolidated production, Declared dividend of $0.10 per cost and capex guidance following common share(2) the Yamana transaction La Colorada Skarn drill results Revenu
Slide 9: Cash flow performance
9 Growth, Business Development, and Other Sustaining Cash Flow Performance $700 $59 $7 $600 $105 ($49) ($20) $513 $500 ($19) ($11) $260 $400 Millions $300 $116 $8 ($32) $200 $181 ($31) $142 ($21) ($1) $100 $0 Cash and STI Adjusted Net changes in Sustaining Net income Dividends paid Net other (e.g. C
Slide 10: Prudent balance sheet management
10 Cash + Short Term Investments(3) //Prudent balance sheet management reduces risk, improves long-term shareholder returns TOTAL WORKING $425.0M CAPITAL $513.1M $826.6M(3) Balance sheet management √ Total debt(2) of $1,187M related to senior notes, the SL- Credit Facility, and construction loans an
Slide 11: La Colorada Skarn
11 ZACATECAS, MEXICO // 100% owned, large, polymetallic deposit with potential for decades of production • The September 2022 resource statement was based on 190,000 metres of drilling. Currently, over 254,000 metres have been completed, and the next resource update will reflect a large portion of t
Slide 12: La Colorada ventilation shaft
12 The fully concrete lined 5.5-metre diameter ventilation shaft is expected to be completed in 2023 at a cost of Ventilation fans to be ~$47 million. installed on shaft in 2024, reducing power requirements upon commissioning Shaft sinking reached a depth of 228 metres by end of Q1 2023.
Slide 13: La Colorada Skarn mineral resource estimate
13 ZACATECAS, MEXICO Mining Cut-off Resource Tonnes Zn Pb Ag Zn Pb Ag Method Value Classification (millions) (%) (%) (g/t) (Mt) (Mt) (Moz) (US$/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 14: Skarn mineralisation zones
14 // 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 15: Escobal: one of the world's best silver mines
15 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 16: Escobal ILO 169 consultation process
16 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 17: The go-to name for investing in silver
17 Large silver reserves(1) As of June 30, 2022, PAAS’ proven and probable mineral reserves 514.9M ozs plus measured and indicated mineral resources of 933.0M ozs As of Dec. 31, 2022, Yamana acquired assets had 112.0M ozs of proven and probable mineral reserves plus 51.7M ozs of measured and indicat
Slide 18: Investments and development projects: NUAG, La Arena II, MARA
(NUAG) (Peru) (Argentina) Pan American owns a ~9.4% undiluted Pan American holds a 100% interest in La Pan American holds a 56.25% interest in interest in NUAG, which is advancing Arena II, an undeveloped copper-gold Minera Agua Rica Alumbrera (MARA), a large the Silver Sand and Carangas project adj
Slide 19: ESG ratings and commitments
19 REPORTING FRAMEWORKS & STANDARDS 68 BBB rating Ranked top 7% in the Metals & Upgraded to ‘BBB’ from ‘BB’ in Mining industry November 2021 Scale: 0 (worst) to 100 (best). Scale: CCC (worst) to AAA (best). MEMBERSHIPS & COMMITMENTS 28.2 (medium risk) C+ rating #8 out of 29 companies in the Upgraded
Slide 20: PAAS Snapshot
20 // PAAS SNAPSHOT 1 $6.2B $0.10 MARKET CAP QUARTERLY DIVIDEND2 364.4M 2.3% Long-life silver reserves SHARES OUTSTANDING DIVIDEND YIELD Medium and long-term growth projects 5.3M 9 1-MONTH DAILY SELL SIDE AVERAGE SHARES ANALYSTS Committed to best-in-class ESG performance MEMBER OF THE MSCI WORLD AND
Slide 21: Appendix
PAN AMERICAN APPENDIX
Slide 22: Yamana transaction summary
22 • Transaction was completed on March 31, 2023 • ~US$1.0 billion in cash funded by Agnico Eagle, ~36.2 million Agnico Eagle shares and ~153.8 million Pan American shares • Pan American was the purchaser of the Yamana shares; contemporaneously with closing, Yamana transferred its interests in its C
Slide 23: 2023 production and cost guidance by mine
23 Silver Production Gold Production Cash Costs AISC (million ounces) (thousand ounces) ($ per ounce)(1) ($ per ounce) (1) Silver Segment: La Colorada (Mexico) 5.5 – 5.9 3 14.00 – 15.50 17.00 – 18.50 Cerro Moro (Argentina)(2) 3.6 – 3.9 77 – 85 5.50 – 8.80 11.00 – 14.50 Huaron (Peru) 3.6 – 3.8 – 5.80
Slide 24: 2023 capital expenditures guidance
24 Expenditures ($ millions) Sustaining Capital Project capital invested to advance La Colorada (Mexico) 15.0 – 16.0 strategic goals: Cerro Moro (Argentina) 20.0 – 21.0 Huaron (Peru) 17.0 – 18.0 • Continued exploration and in- San Vicente (Bolivia)(1) 3.5 – 4.5 fill drilling on the La Colorada Jacob
Slide 25: Investment grade debt acquired from Yamana
25 $500 million 2.63% coupon August 2031 $283 million S&P long-term issuer rating of BBB- 4.625% coupon December 2027 Moody’s rating of Baa3 Attractive coupon rates Staggered maturity dates 2023 2024 2025 2026 2027 2028 2029 2030 2031 Redeemable at Company’s option // Low cost debt acquired as part
Slide 26: ESG structure and accountability
26 // Structure and Accountability S A F E T Y, 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. • The Health, Safety, and Environment (HSE) Committee provides policy direction and oversigh
Slide 27: Climate change strategy
27 30% reduction in GHG emissions by 2030 and an aspirational objective of net zero by 2050 // Climate Change Strategy • Integrating GHG emission reduction strategies into our operational risk and opportunities assessments and strategic planning • Adapting our operating and non-operating mines to al
Slide 28: Silver supply and demand
28 // 2022 actual(1); in million ounces Photography & Other Mine 3% Recycling Production Industrial Investment2 18% 82% 45% 27% Silver Silver Supply Demand 1,005 1,242.4 Jewelry & Silverware 1. Source: Silver Institute, April 2023. 25% 2. Net physical investment in coins and bars. ~ 142 Moz supply s
Slide 29: Growth in silver demand for solar installations
29 // Continued growth in silver demand for solar installations Index is based on silver loadings per cell. Source: Metals Focus, EPIA, December 2022
Slide 30: Growing industrial demand from decarbonization and electrification
30 // 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 31: La Colorada
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 (Mexico)
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 • Average throughput capacity of 20,000 tpd Silver & Gold Production Mineral Reserves & Resources Silver (Moz) Gold (
Slide 33: Huaron
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) Mineral Reserves & Resources 3.7 Grade Contained Metal
Slide 34: San Vicente
34 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 35: Shahuindo
35 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 36: La Arena
36 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 Gold Production (Koz) Mineral Reserves & Resou
Slide 37: Timmins
37 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 • Exploration succe
Slide 38: Jacobina
38 BAHIA, BRAZIL // Large gold mine with significant growth potential (1) • 100% owned and operated underground gold mine producing doré via a conventional leaching process • Average throughput of ~8,289 tpd during 2022 with the phased expansion to 8,500 tpd completed mid-2022 Gold Production (koz)(
Slide 39: El Peñon
39 Dolores ANTOFAGASTA, CHILE // Large gold / silver Mine (1) • 100% owned and operated underground gold and silver mine producing gold and silver doré • The mine has been in operation since 1999 and has consistently replaced ounces mined • Average throughput of ~3,714 tpd in 2022 Silver & Gold Prod
Slide 40: Cerro Moro
40 Dolores SANTA CRUZ, ARGENTINA // Integrated gold & silver mining complex (1) • 100% owned and operated open pit and underground gold and silver complex feeding a single processing plant producing gold and silver doré • Average throughput of ~1,074 tpd in 2022 Silver & Gold Production (2) Silver (
Slide 41: Minera Florida
41 METROPOLITAN REGION, CHILE // Polymetallic gold mine (1) • 100% owned and operated underground mine producing gold and silver doré bars and zinc concentrate • Average throughput of ~2,649 tpd during 2022 Gold Production (koz)(2) 90 85 82 2020 2021 2022 1. See Yamana’s website and Yamana’s SEDAR p
Slide 42: MARA development project
42 CATAMARCA, ARGENTINA // Large copper, gold, molybdenum, silver development project(1) • The MARA project was established in December 2020 following the integration of the Minera Alumbrera plant and mining infrastructure with the Agua Rica deposit • Pan American is the operator with a 56.25% inter
Slide 43: La Arena II
43 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) Model Highlights & Key Assumptions M&I Resources 696.3 0.24 0.38 5,280 2,623 Inferred Resources 54.7 0.23 0.29 413
Slide 44: Navidad
44 44 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
Slide 45: La Colorada Skarn resource at different cut-offs
45 ZACATECAS, MEXICO ZACATECAS, MEXICO // Mineral Resource Estimate at Different Cut-off Values and Mining Methods 1. Prices used to report mineral resources were: US$22 Mining Cut-off Classification Tonnes Zn Pb Ag Zn Pb Ag per ounce of silver, US$2,800 per tonne of zinc and US$2,200 per tonne of l
Slide 46: Mineral reserves as of June 30, 2022
46 As of June 30, 2022 (1,2) Silver Segment Huaron Peru Proven 7.0 169 38.1 0.54 38.0 1.51 105.6 2.97 208.2 Probable 3.9 167 21.1 0.30 11.8 1.63 64.2 2.97 116.6 Morococha (92.3%) (3) Peru Proven 3.3 156 16.6 0.44 14.7 1.31 43.3 3.95 130.7 Probable 3.3 158 16.6 0.32 10.6 1.43 46.5 3.78 123.1 La Color
Slide 47: Measured and indicated resources as of June 30, 2022
47 As of June 30, 2022 (1,2) Silver Segment Huaron Peru Measured 2.1 163 10.9 0.42 1.58 3.05 Indicated 2.4 166 12.7 0.40 1.71 2.92 Morococha (92.3%) (3) Peru Measured 0.6 130 2.7 0.64 0.79 2.59 (1) See table below entitled "Metal price Indicated 0.7 124 3.0 0.61 0.74 2.37 assumptions used to estimat
Slide 48: Inferred resources as of June 30, 2022
48 as of June 30, 2022 (1,2) Silver Segment Huaron Peru Inferred 7.2 155 36.1 0.26 1.47 2.73 Morococha (92.3%) (3) Peru Inferred 5.2 143 24.0 0.35 1.28 3.74 La Colorada Mexico Inferred 14.9 195 93.9 0.20 98.4 1.05 1.89 La Colorada Skarn(4) Mexico Inferred 147.8 28 132.9 1.04 2.29 Manantial Espejo Ar
Slide 49: Metal price assumptions for reserves and resources
49 Metal Price Assumptions Used to Estimate Mineral Reserves and Resources as of June 30, 2022 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 1,300 7,000 2,000 2,600 La Colorada skarn All categories 22.00 2,
Slide 50: Reserves and resources notes
50 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 51: Investor relations contact
51 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
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