Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (February 2022)
46 slides from Pan American Silver's investor presentation, February 2022
Slide 1: Investor Presentation February 2022
INVESTOR PRESENTATION // FEBRUARY 2022
Slide 2: Cautionary Note and Non-GAAP Measures
Litigation Reform Act of 1995 and “forward-looking information” within the meaning on global economies and society; fluctuations in silver, gold, and base metal prices; of applicable Canadian provincial securities laws. All statements, other than fluctuations in prices for energy inputs; fluctuation
Slide 3: Cautionary Note Continued: Technical Information
3 CONTINUED Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Technical Information Scientific and technical information contained in this presentation with respect Canadian public discl
Slide 4: Diversified asset portfolio with 9 operations in the Americas
Corporate Office 4 Timmins Mining Operations Dolores Development & Advanced Stage Exploration Projects Skarn Deposit La Colorada NASDAQ: PAAS // TSX: PAAS Escobal (Escobal is currently on Diversified asset portfolio with 9 operations in the Americas care and maintenance) Revenues from Peru (44%), Me
Slide 5: Shareholders, Communities, Employees
5 Shareholders // Communities // Employees Solid track record of return to shareholders Dividend policy allows shareholders to participate in an improving financial position 28 years of responsible operations in Latin America Implementation of industry best practices, such as Towards Sustainable Min
Slide 6: View our 2020 Sustainability Report online
6 // View our 2020 Sustainability Report online Reporting ESG performance since 2010 under the Global Reporting Initiative (GRI) standards; in 2020, aligning disclosure with TCFD and SASB Member of UN Global Compact (UNGC) and reporting progress on the 10 UNGC Principles and the UN Sustainable Devel
Slide 7: Revenue by Metal and Mineral Reserves by Metal
7 S I LV E R GOLD COPPER ZINC LEAD 2% 8% 14% 4% 29% 6% 2021 2021 3% Mineral Revenue 26% Reserves by Metal1 60% by Metal2 48% 1. Revenue by Metal based on 2021 realized metal prices of: $25.00/oz for silver, $2,997/tonne for zinc, 2. Mineral resources that are not mineral reserves have no demonstrate
Slide 8: 2021 Highlights
8 NASDAQ: PAAS // TSX: PAAS Silver and gold production rose 11% over Cash and cash equivalent balances up 2020 levels $116.4M to $283.6M $1.6B revenue in 2021. Q4 2021 revenue New dividend policy and 20% increase to impacted by 13.3k build in Au finished the dividend declared inventory Exploration d
Slide 9: Cash and short-term investments walk 2021
9 Sustaining Cash Flow Performance Growth, Business Development, and Other $1,000 $950 $3 $629 $900 $850 $800 $750 $700 ($208) $650 Millions $600 $550 ($129) $500 $46 ($72) $431 $450 $400 ($71) ($60) $335 $350 ($50) $279 ($32) $300 $250 $200 $150 $100 $50 $0 Cash and STI at Adjusted Net other (e.g.
Slide 10: 2022 production back-end loaded to H2
10 1. The 2022 forecast assumes placement of Morococha into care and Production back-end Annual Production(1) 2. maintenance while strategic alternatives are evaluated for this asset. Cash Costs and AISC are non-GAAP measures. Please refer to the loaded to H2 2022 with section “Alternative Performan
Slide 11: La Colorada: supporting long-life veins and future Skarn development
11 // Supporting long-life production from veins and future development of Skarn Refrigeration unit and Electrical Room Estimated project spend of $68M to $81M in 2022 includes: • Refrigeration unit - the installation of a cooling system will reduce the working temperature in the mining areas. Targe
Slide 12: Prudent balance sheet management reduces risk
12 Cash + Short Term Investments //Prudent balance sheet management reduces risk, improves long-term shareholder returns TOTAL AVAILABLE $335.3M LIQUIDITY $835.3M Balance sheet management √ Total debt2 of $42.5M related to equipment leases and construction loans Revolving Credit $500.0M Sustainabili
Slide 13: $1.8B in FCF generated since 2010
13 7% 8% Treasury Build, net Share Repurchases of other 24% Dividends //$1.8B in FCF generated since 2010, returning $571M to shareholders (2) and investing $643M in expansions $1.8B FCF 2010 –2021 25% Cash Flow Priorities Debt Repayment(3) 1 Maintain balance sheet flexibility, with low to zero debt
Slide 14: Dividend policy linked to net cash
14 Linked to net cash on Net Cash(2) Base Dividend Variable-Dividend Total Dividend the balance sheet, per Quarter per Quarter per Quarter allowing shareholders to participate in an Less than $100 million $0.10 per share $0.00 per share $0.10 per share improving financial position $100 million to le
Slide 15: La Colorada Skarn, Zacatecas, Mexico
15 ZACATECAS, MEXICO // Estimated to contain 141 million ounces of silver 1 • Total of 160,000 metres drilled since discovery, plan to complete another 55,000 metres of exploration and infill drilling in 2022 • Skarn footprint extends over 1,400 metres x 650 metres, open in all directions • Laborato
Slide 16: Equity interests and royalty holdings
16 (MMX) (NUAG) (Peru) (Mexico) Pan American owns an ~17% Pan American owns a ~9.5% undiluted Pan American holds a free carried JV agreement with Radius Gold whereby Pan undiluted interest in this precious interest in NUAG, which is advancing interest of 25% to commercial American can earn an initia
Slide 17: PAAS Snapshot and Investment Highlights
17 // PAAS SNAPSHOT 1 // INVESTMENT HIGHLIGHTS ~$5.1B $0.12 MARKET CAP QUARTERLY DIVIDEND2 Long-life silver reserves 210.5M 2% SHARES OUTSTANDING DIVIDEND YIELD Major catalysts for silver growth 2.4M 10 3-MONTH DAILY SELL SIDE Experienced management team AVERAGE SHARES ANALYSTS Strong financial posi
Slide 18: Investor Relations contact
18 Siren Fisekci VP, INVESTOR RELATIONS & CORPORATE COMMUNICATIONS +1.604.806.3191 ir@panamericansilver.com PanAmericanSilver.com Suite 1440, 625 Howe Street Vancouver, BC, V6C 2T6
Slide 19: Appendix
PAN AMERICAN APPENDIX
Slide 20: 2022 guidance by mine
20 Silver Production Gold Production Cash Costs AISC (million ounces) (thousand ounces) ($ per ounce)(1) ($ per ounce)(1) Silver Segment: La Colorada 6.85 - 7.10 2.8 - 3.0 8.00 - 9.00 12.40 - 13.40 Huaron 3.70 - 3.95 0.5 1.80 - 4.50 7.80 - 9.90 San Vicente(2) 2.35 - 2.50 0.2 15.30 - 16.55 18.70 - 19
Slide 21: 2022 capital expenditure guidance
21 Expenditures ($ millions) Sustaining capital Sustaining Capital includes spending at La Colorada 28.0 - 29.0 La Colorada to Huaron 16.0 - 19.0 advance development San Vicente 7.0 - 8.0 of the mine at depth Manantial Espejo 2.0 - 3.0 and further investment Dolores 33.0 - 34.0 in ventilation Shahui
Slide 22: Q4 and FY 2021 financial results
22 in millions of US$, except per share amounts Q4 2021 FY 2021 Revenue 422.2 1,632.8 Mine operating earnings 76.0 367.9 Net income 14.7 98.6 Basic income per share(1) 0.07 0.46 Adjusted income(2) 39.9 161.8 Basic adjusted income per share(1)(2) 0.19 0.77 Net cash generated from operating activities
Slide 23: Silver and gold production Q4 2021
23 Silver Production Gold Production (ounces ‘000s) (ounces ‘000s) Q4 2021 FY 2021 Q4 2021 FY 2021 La Colorada 1,584 5,171 0.8 2.7 Huaron 838 3,513 0.3 1.1 Morococha(1) 540 2,175 0.4 1.1 San Vicente(2) 641 2,548 0.1 0.3 Manantial Espejo 1,090 3,236 11.3 33.8 Dolores 507 2,240 40.1 160.1 Shahuindo 61
Slide 24: Cash costs and AISC
24 Cash Costs(1) AISC(1) ($ per ounce) ($ per ounce) 1. Cash Costs and AISC are non-GAAP measures. Please refer to the Q4 2021 FY 2021 Q4 2021 FY 2021 section “Alternative Performance (Non-GAAP) Measures” of the MD&A for the year ended December 31, 2021 for a detailed description of these measures a
Slide 25: Environmental, Social, Governance
25 ENVIRONMENTAL • No significant environmental incidents at our operations • Site-specific projects to reduce energy use, emissions and water intensity • Independent dam safety reviews completed at all sites • Implementing the TSM Tailings, Water Stewardship and Biodiversity Protocols SOCIAL • US$2
Slide 26: ESG structure and accountability
26 // Structure and Accountability E N V I R O N M E N TA L AND SOCIAL 35% • Communities and Sustainable Development Committee provides oversight and guidance on our approach to environmental, social and governance (ESG) matters and policies 15% SAFETY • Other committees include: a) Health, Safety a
Slide 27: ESG ratings
27 // As of February 4, 2022 S&P Global 0 (worst) to 100 (best) 23 46 56 83 MSCI CCC (worst) to AAA (best) BB BB BBB ~46 Sustainalytics 0 (best) to 100 (worst) 44.0 35.6 31.0 80 1 (higher disclosure) to E 10 (lower disclosure) - 5 3 1 (higher disclosure) to ISS S 10 (lower disclosure) - 2 3 n.a. 1 (
Slide 28: Silver supply and demand 2022 forecast
28 // 2022 forecast 1; in million ounces Mine Recycling Industrial Production Investment2 18% 52% 82% 27% Silver Silver Supply Demand 1,092 1,112 Jewelry & Silverware 21% ~ 20 Moz supply shortfall projected for 2022 1. Source: Silver Institute, February 9, 2022. 2. Net physical investment in coins a
Slide 29: Growing industrial demand from decarbonization and electrification
29 // 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. • ~10% of silver supply used for photovoltaics (solar pane
Slide 30: Escobal: one of the world's best silver mines
30 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 31: Escobal ILO 169 consultation process
31 Suspended pending completion of an ILO 169 Consultation by the Ministry of Energy and Mines (MEM) in Guatemala For more information visit: https://mem.gob.gt/pueblo-indigena-xinka/ STAGE 1 STAGE 2 STAGE 3 STAGE 4 REVIEW PRE-CONSULTATION CONSULTATION SUPREME COURT VERIFICATION Minera San Rafael (E
Slide 32: Navidad: largest undeveloped primary silver deposits
32 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 33: La Colorada: largest silver producing mine
33 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 34: Dolores: large gold/silver mine
34 Dolores CHIHUAHUA, MEXICO // Large gold / silver Mine • 100% owned and operated • Mining is by open pit and underground methods 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
Slide 35: Huaron: polymetallic silver mine
35 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 36: Morococha: on care and maintenance
36 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 • Current activities focus on opportunities to enhance productivity and effi
Slide 37: San Vicente: polymetallic silver mine
37 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 38: Manantial Espejo: underground mines in Santa Cruz
38 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 39: Shahuindo: large gold mine
39 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 40: La Arena: gold mine with sulphide expansion potential
40 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 41: Timmins: two producing mines
41 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 42: Proven and probable mineral reserves
42 Property Location Classification Tonnes Ag Contained Au Contained Cu (%) Contained Pb (%) Contained Zn (%) Contained (Mt) (g/t) Ag (Moz) (g/t) Au (koz) Cu (kt) Pb (kt) Zn (kt) Silver Segment Huaron Peru Proven 6.9 164 36.6 0.70 48.5 1.46 101.2 2.95 204.3 Probable 3.6 171 19.8 0.31 11.1 1.73 62.4
Slide 43: Measured and indicated mineral resources
43 Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag Au (g/t) Contained Au Cu (%) Pb (%) Zn (%) (Moz) (koz) Silver Segment Huaron Peru Measured 1.9 162 9.9 0.21 1.63 3.11 Indicated 2.5 154 12.1 0.67 1.55 2.78 Morococha (92.3%) (3) Peru Measured 0.6 134 2.4 0.61 0.82 2.64 Indicated 0
Slide 44: Inferred mineral resources
44 Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag Au (g/t) Contained Au Cu (%) Pb (%) Zn (%) (Moz) (koz) Silver Segment Huaron Peru Inferred 5.8 153 28.6 0.43 1.51 2.73 Morococha (92.3%) (3) Peru Inferred 4.8 143 21.9 0.39 1.09 3.29 La Colorada Mexico Inferred 8.4 190 51.1 0.15 4
Slide 45: Metal price assumptions for reserves and resources
45 Mine Category Ag US$/oz Au US$/oz Cu US$/t Pb US$/t Zn US$/t Huaron All categories 18.00 1,300 6,500 2,000 2,450 Morococha All categories 18.00 1,300 6,500 2,000 2,450 La Colorada All categories 18.00 1,300 6,500 2,000 2,450 La Colorada skarn All categories 18.50 6,500 2,200 2,600 Reserves 18.00
Slide 46: Mineral reserve and resource notes
46 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
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