Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (December 2022)
45 slides from Pan American Silver's investor presentation, December 2022
Slide 1: Investor Presentation December 2022
INVESTOR PRESENTATION // DECEMBER 2022
Slide 2: Cautionary note and non-GAAP measures
2 our sustaining and project capital expenditures in 2022; the anticipated timing for diesel and certain consumables, as well as the impacts related to for metals production and sales, including the expectation with respect to disruptions in the supply chain; that the COVID-19 pandemic, or other pro
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: Pan American Silver & Agnico Eagle offer to acquire Yamana Gold
PAN AMERICAN SILVER CORP. & AGNICO EAGLE MINES LIMITED OFFER TO ACQUIRE YAMANA GOLD
Slide 5: Transaction overview
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 ~153.5 million Pan American shares • Pan American is the purchaser of the Ya
Slide 6: Transaction rationale and benefits
6 • Significantly improved trading liquidity (+50%)(1) with pro-forma US$5.6B(2) market capitalization • Meaningful impact on production - Increase in annual silver production of ~9.5Moz (+63%)(3) - Increase in annual gold production of ~550koz (+104%)(3) • Broadens LATAM exposure with two additiona
Slide 7: Assets to be acquired by Pan American
CANADA Timmins 7 Dolores La Colorada Skarn Deposit MEXICO GUATEMALA Escobal (C&M) Assets to be Acquired by Pan American Pan American Assets Yamana Assets PERU Currently Mining Operations Asset Jurisdiction Producing Shahuindo La Arena BRAZIL Jacobina Jacobina (100%) Brazil ✓ Huaron Morococha BOLIVIA
Slide 8: Pro forma 2022E silver and gold production
8 2022E Silver Production (Moz)(1) 2022E Gold Production (koz)(1) 1,080 24.5 Strengthens Pan American’s 15.0 position as the 530 leading Latin American focused silver and gold producer Pan American New Pan American Pan American New Pan American Excludes Manantial Espejo and Escobal (1) Based on Yama
Slide 9: Yamana LATAM assets overview
9 Reserve M&I Resource 2022 Production 2022 Cash 2022 AISC Grade Grade Guidance Cost Guidance Guidance (Au / Ag) (g/t) (Au / Ag) (g/t) Au (koz) Ag (Moz) Au Eq. (US$/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 $885 At
Slide 10: La Colorada Skarn highlights
10 ZACATECAS, MEXICO // 100% owned, large, polymetallic deposit offers decades of production • 190,000 metres drilled since discovery in October 2018, and additional 44,000 metres completed since cut-off for last resource update as of June 30, 2022 • Skarn footprint of 1,500 metres x 1,100 metres, o
Slide 11: La Colorada Skarn mineral resource estimate
11 ZACATECAS, MEXICO Mining Cut-off Resource Tonnes Zn Pb Ag Zn Pb Ag Method Value Classification (millions) (%) (%) (g/t) (Mt) (Mt) (Moz) (US$/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-off values
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$2,200 per tonne of lead. Mining Cut-off Value Classification Tonnes Zn Pb Ag Zn Pb Ag 2. An e
Slide 13: La Colorada Skarn mineralisation zones
13 ZACATECAS, MEXICO // polymetallic skarn mineralisation is concentrated in 3 zones, covering an area of 1,500 metres by 1,100 metres laterally, and a depth of between 600 metres and 1,900 metres below surface
Slide 14: Investments and other assets (MMX, NUAG, La Arena II)
14 (MMX) (NUAG) (Mexico) (Peru) Pan American owns a ~17% undiluted Pan American owns a ~9.4% JV agreement with Radius Gold: Pan American holds a 100% interest in MMX, representing a market value undiluted interest in NUAG, which Pan American holds a 65% interest interest in La Arena II, an of CAD ~$
Slide 15: Reporting frameworks, memberships and ESG ratings
15 Reporting Frameworks and Standards Ratings and Rankings (as of Nov. 10, 2022) 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) E
Slide 16: PAAS snapshot
16 // PAAS SNAPSHOT 1 ~$3.4B $0.10 MARKET CAP QUARTERLY Long-life silver reserves DIVIDEND2 210.5M 2.6% Major catalysts for silver growth SHARES OUTSTANDING DIVIDEND YIELD Diversified assets 3.7M 10 3-MONTH DAILY SELL SIDE AVERAGE SHARES ANALYSTS Experienced management team MEMBER OF THE MSCI WORLD
Slide 17: Appendix
PAN AMERICAN APPENDIX
Slide 18: Free cash flow and cash flow priorities
18 8% Share Repurchases 28% // $1.8B in FCF generated since 2010, returning $644M Dividends to shareholders(2) and investing $698M in expansions 25% Debt $1.8B FCF Repayment(3) 2010 – YTD 2022 Cash Flow Priorities 1 Maintain balance sheet flexibility, with low to zero debt 2 Invest in high-return pr
Slide 19: Balance sheet and liquidity
19 3.2x DEBT / LTM EBITDA Benchmarking 1.8x 1.8x 1.4x (2) $181M 0.8x 0.7x 0.6x 0.3x Cash and Cash 0.1x Equivalents Hecla First Evolution Fresnillo Pro Forma SSR Endeavour Northern B2Gold TOTAL AVAILABLE Majestic PAAS Mining Mining Star LIQUIDITY(1) $681M Balance Sheet ✓ Yamana total debt(3) of $851M
Slide 20: Revised 2022 operating outlook
20 August 2022 November 2022 Original 2022 Revised Operating Revised Operating Operating Outlook Outlook Outlook Annual Production Silver - Moz 19.0 - 20.5 No change 18.0 - 18.5 Annual silver Gold - koz 550.0 - 605.0 No change No change production revised Zinc - kt 35.0 - 40.0 No change No change to
Slide 21: Capital expenditures outlook
21 Expenditures ($ 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 22: ESG structure and accountability
22 // 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 23: ESG ratings as of November 10, 2022
23 // As of November 10, 2022 S&P Global 0 (worst) to 100 (best) 23 46 56 68 93 MSCI CCC (worst) to AAA (best) BB BB BBB BBB ~44 Sustainalytics 0 (best) to 100 (worst) 44.0 35.6 31.0 27.3 92 (SEVERE RISK) (HIGH RISK) (HIGH RISK) (MEDIUM RISK) 1 (higher disclosure) to E 10 (lower disclosure) - 5 3 4
Slide 24: Silver supply and demand
24 // 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 25: Growth in silver demand for solar installations
25 // Continued growth in silver demand for solar installations Moz Source: GTM, Metals Focus, April 2022
Slide 26: Industrial demand from decarbonization and electrification
26 // 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 27: Escobal: one of the world's best silver mines
27 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 28: Escobal ILO 169 consultation process
28 // 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 29: Navidad
29 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 30: La Colorada
30 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 31: Dolores
31 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 32: Huaron
32 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 33: Morococha
33 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 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: Manantial Espejo
35 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 36: Shahuindo
36 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 37: La Arena
37 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 38: La Arena II
38 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 39: Timmins West and Bell Creek
39 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 40: Mineral reserves as of June 30, 2022
40 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 41: Measured and indicated mineral resources
41 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 42: Inferred mineral resources
42 Pan American Silver Corporation Inferred Mineral Resources as of June 30, 2022 (1,2) Contained Ag Property Location Classification Tonnes (Mt) Ag (g/t) Au (g/t) Contained Au (koz) Cu (%) Pb (%) Zn (%) (Moz) Silver Segment Huaron Peru Inferred 7.2 155 36.1 0.26 1.47 2.73 Morococha (92.3%) (3) Peru
Slide 43: Metal price assumptions for reserves and resources
43 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 44: Mineral reserve and resource notes
44 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 45: Investor relations contact
45 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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