Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (April 2024)
52 slides from Pan American Silver's investor presentation, April 2024
Slide 1: The World's Premier Silver Mining Company
THE WORLD'S PREMIER SILVER MINING COMPANY NYSE | TSX PAAS PRESENTATION // APRIL 2024
Slide 2: Cautionary Note and Non-GAAP Measures
2 annual synergies resulting from the integration of Yamana Gold Inc.; statements transportation); fluctuations in currency; operational risks and hazards inherent regarding the completion of any capital projects, including the installation of with the business of mining; risks relating to the credi
Slide 3: Cautionary Notes Continued
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 mines • 2 catalysts with potential for material 11% 4% Shahuindo growth: Escobal
Slide 5: 2023 Highlights: Record revenue driven by Yamana transaction
5 // Record revenue of $2.3B driven by transformational Yamana transaction Produced 20.4 Moz silver and Silver segment cash costs of $13.07; 882.9 koz gold AISC of $18.17. Gold segment cash costs of $1,113; AISC of $1,371(1) Completed acquisition of Yamana Announced PEA results for the La and succes
Slide 6: 2023 Cash Flow Performance
6 Sustaining Cash Flow Performance Growth, Business Development, and Other $1,200 $125 $1,000 $649 $69 $661 $800 ($382) Millions $600 ($289) ($130) ($77) $441 ($149) ($25) $400 ($14) $295 ($130) ($9) $200 $142 $0 Cash and STI at Adjusted Net changes in Sustaining Net income Dividends paid Net other
Slide 7: 2024 Operating Outlook
7 // forecasting an increase in silver and gold production relative to 2023 and strong performance on costs (1) Ag Au 21.0 – 23.0 Moz 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 COSTS1 GOLD SEGMENT CA
Slide 8: Vision and 2024 priorities
8 // 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 1 Focus on the safe, efficient and environmentally sound operation of our mines ➢ achieve our 2024 Operating Outlook(1) ➢
Slide 9: Total Available Liquidity
9 Revolving Credit TOTAL AVAILABLE Cash + short-term investments of $441M Facility LIQUIDITY Cash + $750M short-term $1,191M(3) investments Total debt(2) of $801.6M related to senior notes and $441M construction loans & leases $283M with 4.625% coupon maturing in December 2027 $500M with 2.63% coupo
Slide 10: Providing shareholder returns while maintaining a healthy balance sheet
10 // Providing shareholder returns while maintaining a healthy balance sheet • Maintain balance sheet flexibility with low debt • Base dividend of $0.10/share with a defined variable • $388.5M of debt was repaid in 2023 dividend linked to net cash(1) • $130.4M was paid to shareholders in 2023 Debt
Slide 11: ~$150M annual cost savings from Yamana synergies
11 // 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, primarily $6 $61 $94 $127 from the elimination of ca
Slide 12: La Colorada ventilation shaft
12 // significant improvement in mine operating conditions expected following completion mid 2024 The concrete-lined, 5.5-metre diameter ventilation shaft was fully excavated to a depth of 581 metres in December 2023. Ventilation fans to be installed on shaft by mid-2024. Once completed, the ventila
Slide 13: La Colorada Skarn Preliminary Economic Assessment Highlights
13 13 ZACATECAS, MEXICO // Preliminary Economic Assessment Highlights • Production averaging 17.2M ozs of silver, 427k tonnes of zinc and 218k tonnes 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 explora
Slide 14: La Colorada Skarn mineralisation zones
14 // mineralisation 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 15: La Colorada Skarn would rank 3rd largest global silver mine
15 // Relative to 2023 mine performance, La Colorada Skarn would rank as the 3 rd largest global silver mine 1,2 Largest Mines by Total Silver Production in 2023 1 (kt) Estimated Mine Life(3) 2040 n.a. 2030 2047 2028 2031 2027 2026 2029 2039 37,825 21,189 17,570 17,200 16,686 14,615 14,200 14,051 13
Slide 16: La Colorada Skarn would rank 3rd largest global zinc mine
16 // Relative to 2023 mine performance, La Colorada Skarn would also rank as the 3 rd largest global zinc mine 1,2... Largest Mines by Total Zinc Production in 2023 1 (kt) Estimated Mine Life(3) 2031 2030 2047 2028 2040+ 2040+ 2033 2030 2034 2033 553 549 427 414 287 280 260 173 170 163 Red Dog Ramp
Slide 17: First quartile zinc cost curve
17 // …and it would 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% Kazzinc Consolidated 200.00 Dugald River McArthur River La Colorada Skarn(2) Mt Isa Zinc Total Production Cost (¢/lb
Slide 18: Escobal: One of the world's best silver mines
18 SANTA ROSA, GUATEMALA MEXICO GUATEMALA // One of the world’s best silver mines Escobal • High-quality, well-built operation with over US$500M invested(1) • 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 con
Slide 19: Escobal ILO 169 Consultation process
19 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 20: Jacobina: Study underway to optimize long-term economics
20 BAHIA, BRAZIL Jacobina // Study underway to optimize long-term economics and expansion potential • 100% owned and operated underground gold mine producing doré via a conventional leaching process • Throughput of ~8,500 tpd at gold recovery rates of ~96% Gold Production (koz) Mineral Reserves & Re
Slide 21: Royalties, La Arena II and New Pacific investment
21 ➢ Life-of-mine copper net smelter return ➢ Pan American holds a 100% interest in ➢ Pan American owns an ~11.6% undiluted royalty of 0.75% on a 100% interest in the La Arena II, an undeveloped copper-gold interest in New Pacific Metals, which is MARA project with the right for PAAS to freely trans
Slide 22: Silver supply shortfall and record industrial demand
22 // ~140 Moz supply shortfall estimated for 2023, marking the 3rd consecutive year of physical deficit, and reflecting record high industrial demand in 2023 Photography & Other Industrial Mine 2% 49% Recycling Production Investment2 18% 82% 26% Silver Silver Supply Demand 1.02B ozs 1.20B ozs Jewel
Slide 23: Silver demand from solar and automobiles
23 // Silver demand for solar installations and automobiles is large and increasing, accounting for an estimated ~267 Moz or 22% of total demand in 2023 Global Photovoltaic Demand (Moz Ag) Global Automotive Demand (Moz Ag) 220 80 200 75 180 70 160 65 140 60 120 55 100 50 80 60 45 40 40 2016 2017 201
Slide 24: Industrial demand from decarbonization and electrification
24 // 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. • ~16% of silver demand is for photovoltaics (solar panels
Slide 25: ESG ratings and frameworks
25 REPORTING FRAMEWORKS & STANDARDS 60 BBB rating Ranked top 11th percentile in Ranked in the top 50th the Metals & Mining industry percentile Scale: 0 (worst) to 100 (best). Scale: CCC (worst) to AAA (best). MEMBERSHIPS & COMMITMENTS 28.5 (medium risk) C+ rating #10 out of 30 companies in Ranked to
Slide 26: PAAS Snapshot
26 // PAAS SNAPSHOT 1 $5.5 B $0.10 MARKET CAP QUARTERLY DIVIDEND2 364.7 M 2.6% Preferred silver mining investment: large SHARES OUTSTANDING DIVIDEND YIELD mineral reserves and resources, well capitalized and highly liquid $50 M 9 AVERAGE DAILY SELL SIDE TRADING VALUE3 ANALYSTS Medium and long-term g
Slide 27: Appendix
PAN AMERICAN APPENDIX
Slide 28: Q4 and FY 2023 financial results
28 in millions of US$, except per share amounts Q4 2023 FY 2023 Revenue 669.6 2,316.1 Mine operating earnings 64.9 296.8 Net loss (67.8) (104.9) Basic loss per share(1) (0.19) (0.32) Adjusted (loss) earnings (2) (16.3) 39.3 Basic adjusted (loss) earnings per share(1)(2) (0.04) 0.12 Net cash generate
Slide 29: 2024 Operating Outlook by mine
29 Silver Production Gold Production Cash Costs AISC (million ounces) (thousand ounces) ($ per ounce)(1) ($ per ounce) (1) 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 -
Slide 30: 2024 quarterly guidance
30 • Silver production is anticipated to increase towards the second half of year largely as a result of increased production from La Colorada due to higher grades, and higher throughput following completion of ventilation improvements. • Gold production is expected to increase in the second half of
Slide 31: 2024 capital expenditures outlook
31 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)(1) 4.5 – 5.5 Jacobina Jacobina (Brazil) 53.0 – 55.0
Slide 32: ESG structure and accountability
32 // 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 33: El Peñon
33 ANTOFAGASTA, CHILE El Peñon // Large gold / silver Mine • 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 Silver & Gold Production Mineral Reserves & Resources Silver (Mo
Slide 34: La Colorada
34 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 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: Timmins
36 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 37: Huaron
37 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 Grade Contained Metal 3.7
Slide 38: San Vicente
38 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 39: La Arena
39 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 from 2021 to 2026 Gold Production (Koz) Minera
Slide 40: Cerro Moro
40 SANTA CRUZ, ARGENTINA // Integrated gold & silver mining complex Cerro Moro • 100% owned and operated open pit and underground gold and silver complex feeding a single processing plant producing gold and silver doré Silver & Gold Production Mineral Reserves & Resources Silver (Moz) Gold (koz) Gra
Slide 41: Minera Florida
41 METROPOLITAN REGION, CHILE Minera Florida // Polymetallic gold mine • 100% owned and operated underground mine producing gold and silver doré bars and zinc concentrate Gold Production (koz) Mineral Reserves & Resources 85 92(1) Grade Contained Metal 82 Yamana Tonnes Au Ag Zn Au Ag Zn Q1 (Mt) (g/t
Slide 42: Dolores
42 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 43: La Arena II
43 LA LIBERTAD, PERU La Arena II // 100% owned, undeveloped copper porphyry Mineral Resources 1 (as of June 30, 2023) Grade Contained Metal Tonnes Au Cu Au Cu (Mt) (g/t) (%) (koz) (kt) Model Highlights & Key Assumptions M&I Resources 708.7 0.23 0.37 5,300 2,633 Inferred Resources 68.2 0.21 0.29 455
Slide 44: Navidad
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 PEA summary
46 Construction period 6 years Production mine life 17 years Production rate 50 ktpd (or 18.25 Mtpa) Notes: Mineable inventory 284.7 million tonnes 1. Assumes metal prices of $2,800 per tonne of zinc, $2,200 per Average annual silver produced first 10 years 17.2 million ounces tonne of lead, and $22
Slide 47: Mineral reserves as of June 30, 2023
47 As of June 30, 2023 (1,2) Tonnes Ag Contained Au Contained Cu Contained Contained Contained (1) See table below entitled Property Location Classification Pb (%) Zn (%) (Mt) (g/t) Ag (Moz) (g/t) Au (Koz) (%) Cu (Kt) Pb (Kt) Zn (Kt) "Metal price assumptions Silver Segment used to estimate mineral H
Slide 48: Measured and Indicated Mineral Resources
Pan American Silver Corporation Measured and Indicated Mineral Resources as of June 30, 2023(1)(2)(3) Tonnes Contained Contained Property Location Classification (Mt) Ag (g/t) Ag (Moz) Au (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Huaron Peru Measured 1.4 180 8.2 0.30 1.95 3.15 Indicated 1.8 173 10.2 0.30
Slide 49: Inferred Mineral Resources
49 as of June 30, 2023 (1,2,3) Pan American Silver Corporation Inferred Mineral Resources as of June 30, 2023(1)(2)(3) Tonnes Ag Contained Au Contained Property Location Classification (Mt) (g/t) Ag (Moz) (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Silver Segment Huaron Peru Inferred 5.9 164 31.2 0.35 1.76
Slide 50: Metal price assumptions for reserves and resources
50 Metal Price Assumptions Used to Estimate Mineral Reserves and Mineral Resources as of June 30, 2023 Property Category Ag US$/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: Technical notes on reserves and resources
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 (April 2024) on 6ix