Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Non-Deal Roadshow (October 2009)
27 slides from Pan American Silver's roadshow presentation, Oct 22, 2009
Slide 1: UBS Europe Road Show / Cautionary Note Regarding Forward Looking Statements
UBS Europe Road Show October 22-23, 2009 Cautionary Note Regarding Forward Looking Statements Certain of the statements and information in this investor presentation constitute “forward looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “
Slide 2: Why PAAS? / Our Operations
Why PAAS? • 2009 to be 14th consecutive year of production growth • Diversified political & operational exposure • Increasing exposure to silver and gold • Industry‐leading mine construction and operating expertise (3 new mines in last 3 years) • Superior financial performance • Core assets possess
Slide 3: 2009 H1 Operations Review: Mexico - La Colorada
2009 H1 Operations Review 5 Mexico ‐ La Colorada • Our purest underground silver producer • Annual production 3.5 to 4 Moz Ag • 2009 YTD production - 1.6 Moz Ag - Cash costs: $7.29/oz - In Q2 higher throughput rates made up for lower grades • 2009 production forecast - 3.4 Moz Ag at cash costs of $7
Slide 4: Mexico - Alamo Dorado; Peru - Morococha
Mexico ‐ Alamo Dorado • Our first open pit mine and our largest producing asset • Annual production ~5.0 Moz Ag • 2009 YTD production – 2.7 Moz Ag – 8.9 Koz Au – Cash costs $4.36/oz Ag • 2009 production forecast – 4.8 Moz Ag at cash costs of $5.65/oz Ag 7 Peru ‐ Morococha • Underground poly-metallic
Slide 5: Peru - Huaron; Argentina - Manantial Espejo
Peru ‐ Huaron • Underground poly-metallic mine • Annual production ~ 4.0 Moz Ag • Core asset with excellent exploration potential • Largest P&P reserves in our portfolio (62 Moz Ag) • 2009 YTD production – 1.8 Moz Ag – Cash costs $9.42/oz Ag – Cash costs negatively affected by DRP smelter closure •
Slide 6: Bolivia - San Vicente; Silver Production Growth
Bolivia ‐ San Vicente • Our newest underground development project • Excellent poly-metallic vein deposit • 2009 YTD production (Q2 2009 startup quarter) – 0.69 Moz Ag – Cash costs $8.92/oz Ag • New 750 TPD plant already running at full capacity • Cash costs expected to decline over remainder of 200
Slide 7: 2009 Silver Production Forecast
2009 Silver Production Forecast 1 SILVER PRODUCTION CASH COSTS MILLIONS OF OUNCES PER OUNCE Huaron 4.2 $7.86 Morococha (92.2%) 2.7 $7.59 Silver Stockpiles 0.2 $3.26 San Vicente (95.0%) 1.9 $6.70 La Colorada 3.4 $7.70 Alamo Dorado 4.8 $5.65 Manantial Espejo 4.3 $2.77 TOTAL 21.5 $6.06 1 Excluding Quir
Slide 8: Increasing Exposure To Precious Metals / Geology & Exploration Review
Increasing Exposure To Precious Metals Silver + Gold = 67% Silver + Gold = 74% Gold Gold 16% Copper 5% 9% Lead Copper 6% 7% Lead 6% Silver 58% Zinc Silver 17% 62% Zinc 14% 2008 Revenue 2009 Revenue Forecast* * Price Assumptions: Ag $10/oz; Au $725/oz; Zn $1,150/tonne; Pb $1,300/tonne; Cu $3,500/tonn
Slide 9: P&P Silver Reserves
P&P Silver Reserves P&P Reserve Replacement, January 1, 2009(1) *Million Ounces Contained Silver Reserves* Mined 2008* Gained/lost Reserves* Jan 1, 2008 2008* Jan 1, 2009 Morococha 32.1 3.0 6.1 35.2 (92.2%) Huaron 58.8 4.6 7.7 62.0 Quiruvilca 7.4 1.6 (2.5) 3.3 La Colorada 18.0 4.5 4.6 18.2 Alamo Dor
Slide 10: Organic Growth: Brownfield Exploration
Organic Growth Brownfield Exploration 2009 Diamond Drill Program * Morococha 11,500 metres Huaron 5,000 La Colorada 12,000 Manantial Espejo 7,000 Other 17,800 TOTAL 53,300 metres 2009 Exploration Budget $4.6 M * Does not include La Preciosa JV Exploration Program 19 2009 Brownfield Exploration (Cont
Slide 11: 2009 H1 Financial Review
2009 H1 Financial Review 21 2009 H1 Highlights (US$) Silver production 10.7 M Gold production 46.1 Koz Cash costs per ounce of silver $5.97/oz Adjusted net income $20.1 M Adjusted net income per share* $0.24 Cash flow generated by operations $26.7 M Cash flow per share $0.31 * Excluding after tax $3
Slide 12: 2009 H1 Highlights (Cont'd) / What's Next?
2009 H1 Highlights (US$) (Cont’d) Cash and cash equivalents $112.4 M Working capital $216.1 M Undrawn credit facility $70.0 M 9Major capital expenditures completed 9No precious metals hedges 9Well funded for growth 23 What’s Next? La Preciosa Joint Venture • Pan American and Orko Silver formed a JV
Slide 13: La Preciosa Joint Venture / Resources
La Preciosa Joint Venture • 47 km NE of Durango La Preciosa • Accessible by two major highways from Durango LA PRECIOSA PROJECT • Martha, Abundancia, Gloria and Luz Elena are the main structures which can be followed at surface for over 2.5 km along strike • Main veins are 1.5 to 20 20 km meters wid
Slide 14: Friendly Offer for Aquiline Resources Inc.
Click to What’s Next? edit Master title style Pan American Click Silver to edit Master Corp.’s subtitle style Friendly Offer for Aquiline Resources Inc. 27 Transaction Highlights Pan American Silver Corp. (“PAA”) will make a friendly offer to acquire Aquiline Resources Inc. (“AQI”) • PAA will offer
Slide 15: Transaction Highlights (Cont'd) / Other Terms
Transaction Highlights (Cont’d) PAA will make separate offers to purchase AQI warrants and the convertible debenture • PAA will offer replacement securities with similar terms, adjusted by the 0.2495 exchange ratio The Board of Directors of AQI has unanimously determined that the PAA Share Offer is
Slide 16: Pan American + Aquiline - The Assets / The Rationale
Pan American + Aquiline – The Assets Canada Head Office (Vancouver) USA Hog Heaven Waterloo Mexico Alamo Dorado La Preciosa (JV) La Colorada Peru Quiruvilca Huaron Morococha Stockpiles Pico Machay Bolivia San Vicente Pan American Silver Argentina Aquiline Resources Calcatreu Navidad Manantial Espejo
Slide 17: Pan American + Aquiline - Silver Resources
Pan American + Aquiline – Silver Resources Silver Reserves and Resources (mm oz) 1,325 233 945 937 678 639 121 721 +208% 440 306 112 224 82 229 187 101 224 Proven & Measured Inferred Measured Inferred Proven & Measured Inferred Silver Polymetal Fresnillo Coeur Hecla Mining Hochschild Silvercorp Prob
Slide 18: Value for Pan American Shareholders
Value for Pan American Shareholders Accretive to NAV per share and resources per share Expected to be accretive to CFPS once Navidad is in production PAA adds another world-class project to its development pipeline 208% overall increase in silver M&I resources (including P&P reserves) 99% overall in
Slide 19: Navidad - Project Description
Navidad – Project Description Location, Infrastructure and Surface Land Ownership • Located in northern Chubut province at 1,000 to 1,500 meter elevation, between small communities of Gastre and Gan Gan • Grassroots project with limited infrastructure and housing • 80 kms from 330 KV power line • 15
Slide 20: Navidad (Cont'd) / Political Perspective
Navidad (Cont’d) (1) Barite Hill Zone Near surface deposit amenable to open pit mining methods Indicated resource(2) – 7.7 M tonnes@ average 153 g/t (38 M contained oz) Metallurgical test work indicates high-silver grade bulk flotation concentrate can be produced Valle Esperanza Zone Near surface de
Slide 21: PAA + AQI - A Win/Win Combination / The Silver Market
PAA + AQI - A Win/Win Combination For AQI Shareholders • Significant upfront premium to current price • Opportunity to participate in PAA’s future upside • Development and operation of Navidad by PAA’s experienced team • Immediate access to PAA market liquidity For PAA Shareholders • PAA will incorp
Slide 22: The Silver Price / 2008 Silver Market
The Silver Price 43 2008 Silver Market* • Total world silver supply 888.4 Moz – Mine production: 76.6% (681 Moz) – Scrap silver: 19.9% – Government sales: 3.5% • 2008 Demand – Industrial fabrication: 50% – Photography: 12% – Jewelry + Silverware + Coins & Medals: 31.5% – Net investment demand 50.2 M
Slide 23: 2009 Silver Market Trends / ETF Silver Holdings
2009 Silver Market Trends* • World silver supply expected to fall by 2% in 2009 • Industrial demand expected to fall sharply as well • Increased investment demand expected to offset other declines in demand • Photographic demand expected to continue secular decline • Jewelry demand expected to decli
Slide 24: Executive Team / Board of Directors
Executive Team LEFT TO RIGHT Back: Michael Steinmann – EVP Geology & Exploration; Andres Dasso – SVP Mining Operations; Wayne Vincent – VP Accounting & Financial Reporting Front: Joe Phillips – SVP Project Development; Rob Doyle – CFO; Geoff Burns – President & CEO; Steve Busby – COO; Martin Wafforn
Slide 25: Capital Structure / Appendix: Pan American Silver Resources
Capital Structure Shares Outstanding 87.23 M +Options 0.99 M Fully Diluted 88.22 M 3 Month Avg. Daily Volume TSX (PAA) 0.17 M Nasdaq (PAAS) 1.28 M 49 Appendix: Pan American Silver Resources Grade Contained Ore Ag Au Pb Zn Cu Mine Classification (mm tonnes) Ag (g/t) Au (g/t) Pb % Zn % Cu % (mm oz) (m
Slide 26: Appendix: Aquiline Resources
Appendix: Aquiline Resources Grade Contained Ore Ag Au Pb Cu Deposit / Zone Classification (mm tonnes) Ag (g/t) Au (g/t) Pb % Cu % (mm oz) (mm oz) (mm lbs) (mm lbs) Calcite Hill NW Measured & Indicated 14.8 78 - 0.6 % - 37 - 194 - Inferred 14.6 52 - 0.8 - 24 - 265 - Calcite Hill Measured & Indicated
Slide 27: Endnotes and Cautionary Statements
Endnotes and Cautionary Statements For full transaction terms and conditions, refer to Pan American Silver’s Take-over Bid Circular, which will be filed shortly and available at www.sedar.com and www.panamericansilver.com Michael Steinmann, P.Geo. Executive Vice President, Geology and Exploration of
Pan American Silver — Non-Deal Roadshow (October 2009) on 6ix