Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (September 2024)
54 slides from Pan American Silver's investor presentation, September 2024
Slide 1: Presentation September 2024
P R E S E N TAT I O N // SEPTEMBER 2024
Slide 2: Cautionary note regarding forward-looking statements
2 anticipated benefits therefrom; the expected sale of the La Arena gold mine and La fluctuations in prices for energy inputs, labour, materials, supplies and services Arena II copper/gold development project; statements regarding strategic priorities (including transportation); fluctuations in curr
Slide 3: Cautionary note continued
3 C O N T IN UED amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of “inferred NOT AN OFFER OR A SOLICITATION resources” exist, are economically or legally mineable or will ever be upgraded to a hi
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: Largest by market cap and most liquid silver producer
6 // Pan American is largest by market cap and most liquid of the following silver producers $100 $90 $80 $70 $60 Liquidity ($M)1 $50 Hecla $40 First Majestic Coeur $30 Fortuna Endeavour $20 Silver Silvercrest $10 Fresnillo MAG Hochschild Aya = Market Capitalization $0 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0
Slide 7: Silver price correlation and 10-year total shareholder returns
7 // Strong correlation coupled with delivery of 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 S
Slide 8: Growing industrial demand from decarbonization and electrification
8 // 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 2020 2021 2022 2023 2024F Supply Demand 1.00
Slide 9: Silver market total supply and demand
9 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 2
Slide 10: Vision and strategic priorities
10 10 // 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 11: Safety programs and initiatives
11 // Programs & Initiatives Lost Time Injury Frequency (LTIF) (1) Lost Time Injury Severity (LTIS) (2) • Implementation of the “Doing Safety Differently” initiative which 2023 0.69 2023 40 focuses on leading indicators to mitigate serious safety incidents • High Potential Incidents (HPIs) tracking
Slide 12: Operating Outlook reaffirmed
12 // Operating Outlook reaffirmed for production, Cash Costs and AISC, and capital expenditures • Annual silver production towards the low end of range • Silver and gold production heavily weighted to Q4 2024 H1 2024 2024 Full Year Actual Operating Outlook1 Consolidated Production Silver (Moz) 9.58
Slide 13: Generated Free Cash Flow of $102.1M
13 // Generated Free Cash Flow 1 of $102.1M Production of 4.6 million ounces silver and Adjusted earnings of $40.0M, or $0.11 220 thousand ounces gold per share2 , incl. $0.03 per share tax expense related to inflation adjustments in Argentina Silver Segment Cash Costs of $14.49 per ounce and Gold S
Slide 14: Cash flow performance
14 14 Sustaining Cash Flow Performance Growth, Business Development, and Other $700 $600 $243 $500 ($61) ($41) $403 $3 ($36) $400 $369 ($31) ($3) Millions $331 ($29) ($9) $300 $200 $100 $0 Cash and STI at Adjusted operating Sustaining capital Net changes in Dividends paid Net income tax Shares repur
Slide 15: Total available liquidity
15 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 primarily related to senior notes: $283M with 4.625% coupon maturing in December 2027 $500M with 2.63% coupon maturing in August 203
Slide 16: Priorities for deployment of free cash flow
16 // Pan American adheres to the following priorities for deployment of free cash flow 1 Maintain balance sheet flexibility, with low debt ➢ Long-term Total Gross Leverage1 target of below 1.0x ➢ Company has demonstrated a disciplined approach to returning below this target, reducing debt following
Slide 17: Successful integration of new operating assets and synergies
17 // Successful integration of new operating assets and realization of synergies 404 koz ~20 Moz $1.1B $25-30M Shahuindo La Arena February 22, 2019 2018A Gold Production Silver Production Optionality(1) Total Consideration(2) Annual Synergies(3) Timmins & Bell Creek Escobal Jacobina 565 koz 9.2 Moz
Slide 18: Estimated cost savings through synergies
18 // Pan American estimates ~$150M annually of cost savings through synergies with the successful integration of Yamana’s four operating mines and the reduction of expenses G&A (US$M) Implied Synergies = ~$60M Additional $90 million in annual cash savings following $6 $60 $94 $127 dispositions and
Slide 19: Received cash proceeds from asset sales, plus NSR royalties
19 // Received cash proceeds totaling $743.4M, plus 3 NSR royalties 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 royalty1 Sold 56.25% stake in the MARA project for $475M in
Slide 20: La Colorada mine overview
20 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 21: Improved ventilation at La Colorada
21 // 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 22: La Colorada Skarn: exploring long-term partnerships
22 ZACATECAS, MEXICO La Colorada Skarn // Exploring long-term partnerships to develop the project Preliminary Economic Assessment 1 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 conventi
Slide 23: Mineralization concentrated in three zones
23 1 // 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 Colorad
Slide 24: La Colorada Skarn would rank as 4th largest global silver mine
24 // 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 25: La Colorada Skarn would rank as 4th largest global zinc mine
25 // 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 26: First quartile of the cost curve
26 // 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 27: Escobal: one of the world's best silver mines
27 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 28: Escobal ILO 169 consultation process
28 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 29: Jacobina mine overview
29 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 30: Royalties and non-core project interests
30 ➢ 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 31: ESG ratings and rankings
31 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 32: A leading producer of silver and gold in the Americas
32 // A leading producer of silver & gold in the Americas $7.8 B $0.10 $86 M QUARTERLY AVERAGE DAILY MARKET CAP DIVIDEND2 TRADING VALUE3 363.0 1.9% 9 SHARES SELL SIDE DIVIDEND YIELD OUTSTANDING ANALYSTS Analyst Coverage4 Top Shareholders5 BofA Global Research (Lawson Winder) Van Eck (10.25%) Edison
Slide 33: Appendix
PAN AMERICAN APPENDIX
Slide 34: 2024 operating outlook by mine
34 Silver Production Gold Production Cash Costs AISC (million ounces) (thousand ounces) ($ 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 35: 2024 capital expenditures
35 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 36: Dividend policy and share buyback
36 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 37: ESG structure and accountability
37 // 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 38: El Peñon mine overview
38 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 39: Huaron mine overview
39 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 40: Shahuindo mine overview
40 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 41: Timmins mine overview
41 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 42: San Vicente mine overview
42 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 43: Minera Florida mine overview
43 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 44: Cerro Moro mine overview
44 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 45: Dolores mine overview
45 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 46: Navidad: one of the largest undeveloped primary silver deposits
46 46 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 47: La Colorada Skarn mineral resource estimate
47 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 48: La Colorada Skarn 50,000 tpd case
48 // 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 $22.00 per ounce of silver. Average annual silver
Slide 49: Mineral reserves as of June 30, 2023
49 As of June 30, 20231,2 Tonnes Ag Contained Au Contained Cu Contained Contained Contained (1) See table below entitled Property Location Classification Pb (%) Zn (%) (Mt) (g/t) Ag (Moz) (g/t) Au (Koz) (%) Cu (Kt) Pb (Kt) Zn (Kt) "Metal price assumptions Silver Segment used to estimate mineral Huar
Slide 50: Measured and indicated mineral resources
Pan American Silver Corporation Measured and Indicated Mineral Resources as of June 30, 20231,2,3 50 Tonnes Contained Contained Property Location Classification (Mt) Ag (g/t) Ag (Moz) Au (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Huaron Peru Measured 1.4 180 8.2 0.30 1.95 3.15 Indicated 1.8 173 10.2 0.30 1
Slide 51: Inferred mineral resources
51 as of June 30, 20231,2,3 Pan American Silver Corporation Inferred Mineral Resources as of June 30, 20231,2,3 Tonnes Ag Contained Au Contained Property Location Classification (Mt) (g/t) Ag (Moz) (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Silver Segment Huaron Peru Inferred 5.9 164 31.2 0.35 1.76 2.87 1.
Slide 52: Metal price assumptions for reserves and resources
52 Metal Price Assumptions Used to Estimate Mineral Reserves and Mineral Resources as of June 30, 2023 Property Category Ag US$/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 53: Technical notes on mineral reserves and resources
53 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 54: Investor relations contact
54 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 (September 2024) on 6ix