Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Investor Presentation (May 2024)
57 slides from Pan American Silver's investor presentation, May 2024
Slide 1: The World's Premier Silver Mining Company
THE WORLD'S PREMIER SILVER MINING COMPANY NYSE | TSX PAAS PRESENTATION // MAY 2024
Slide 2: Cautionary Note and Non-GAAP Measures
2 allocation; synergies following the integration of Yamana Gold Inc.’s four pressures and the potential for economic recessions; fluctuations in silver, gold operating mines; statements regarding the investments in capital projects, and base metal prices; fluctuations in prices for energy inputs, l
Slide 3: Cautionary Note 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 3% • 2 catalysts with potential for material 10% 26% Shahuindo growth: Esco
Slide 5: The go-to name for investing in silver
5 Management team experienced working in the Americas and focused on executing clearly-defined strategic priorities The “go-to” name for investing in silver with industry leading Mineral Reserves & Resources Catalysts for material silver production growth: La Colorada Skarn and Escobal Strong financ
Slide 6: Largest by market cap and most liquid
6 // Pan American is largest by market cap and most liquid $90 $80 $70 $60 First Majestic Liquidity (US$M)1 $50 $40 Hecla $30 Coeur Fortuna $20 Silvercrest Endeavour Fresnillo $10 MAG Aya = Market Capitalization $0 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 Market Capitalization (US$B) Source
Slide 7: Silver Reserves and Resources vs Peers
7 Silver Proven & Probable Mineral Reserves 1 (Moz) Silver Measured & Indicated Mineral Resources 1 (Moz) (2) (2) Pan American 486.8 Pan American 1,033.8 Fresnillo 381.2 Fresnillo 723.7 Coeur 243.9 Endeavour 529.9 Hecla 238.3 Hecla 219.3 Aya 70.9 Coeur 196.3 Endeavour 57.1 First Majestic 86.8 First
Slide 8: Vision and strategic 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: On track to achieve 2024 Guidance
9 // On track to achieve 2024 Guidance (1) Production of 5.0 million ounces Adjusted earnings of silver and 223 thousand ounces gold $4.7M, or $0.01 per share1 Silver Segment Cash Costs of $12.67 Strong financial position with and Gold Segment Cash Costs of $1.1B in Total Available $1,207 below rang
Slide 10: Operating cash flows fund growth and shareholder returns
10 // Operating cash flows used to fund growth initiatives and shareholder returns Sustaining Cash Flow Performance Growth, Business Development, and Other $700 $183 ($72) $600 ($66) $500 ($41) $441 ($37) ($5) $403 ($31) $400 ($22) ($11) Millions ($8) $331 $300 $200 $100 $0 (1) (1)(3) Cash and STI a
Slide 11: Total available liquidity
11 Cash + short-term Revolving investments Credit TOTAL AVAILABLE $331M Facility LIQUIDITY Cash + short-term investments of $331M $750M $1,081M3 Total debt(2) of $806.6M related to senior notes and construction loans & leases $283M with 4.625% coupon maturing in December 2027 $500M with 2.63% coupon
Slide 12: Shareholder returns with a healthy balance sheet
12 // 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 cash1 • $36.5M was paid to shareholders in Q1 2024 Debt
Slide 13: 2024 production and cost guidance
13 // forecasting an increase in silver and gold production relative to 2023 and strong performance on costs 2 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 COSTS2 GOLD SEGMENT CAS
Slide 14: ~$150M annual cost savings from Yamana integration
14 // 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 15: La Colorada ventilation project
15 // 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 16: La Colorada Skarn PEA Highlights
16 16 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 17: La Colorada Skarn mineralisation zones
17 // 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 18: La Colorada Skarn would rank 3rd largest silver mine
18 // 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) n.a. 2033 2033 2047 2035 2027 2027 2029 2036 2039 21,189 17,786 17,566 17,200 16,813 13,349 12,772 12,102 11
Slide 19: La Colorada Skarn would rank 4th largest zinc mine
19 // 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 Life(3) 2031 2031 2036 2047 2044 2033 2040 2036 2030 2042 540 485 463 427 287 262 262 208 171 152 Red Dog Rampur
Slide 20: First quartile zinc cost curve
20 // …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 21: Escobal: one of the world's best silver mines
21 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 22: Escobal ILO 169 consultation process
22 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 23: Jacobina
23 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 24: Non-core asset divestments
// Sales of non-core assets focuses portfolio, improves the balance sheet and retains future upside 2023 – 2024 Divestments ✓ Entered into an 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
Slide 25: Royalties and equity interests retained
25 ➢ 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 26: ESG ratings and commitments
26 REPORTING FRAMEWORKS & STANDARDS 60 BBB rating Ranked top 9th 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 25.8 (medium risk) C+ rating #8 out of 30 companies in Precious Ra
Slide 27: PAAS Snapshot
27 // PAAS SNAPSHOT 2 $7.4 B $0.10 MARKET CAP QUARTERLY DIVIDEND3 Analyst Coverage1 362.9 M 2.0% SHARES Lawson Winder (BofA Global Research) OUTSTANDING DIVIDEND YIELD Andrey Litvin (Edison Group) Matt Murphy (Jefferies) $73 M 10 AVERAGE DAILY SELL SIDE Michael Siperco (RBC Capital Markets) TRADING
Slide 28: Appendix
PAN AMERICAN APPENDIX
Slide 29: Q1 2024 financial and production summary
29 Q1 2024 FINANCIAL (in millions of US$, except per share amounts) Revenue 601.4 Cost of Sales(1) 530.4 Mine operating earnings 71.0 Net loss (30.8) Basic loss per share(2) (0.08) Adjusted earnings(3) 4.7 Basic adjusted earnings per share(2)(3) 0.01 Net cash generated from operating activities 61.1
Slide 30: 2024 Operating Outlook by mine
30 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 -
Slide 31: 2024 Quarterly Operating Outlook
31 Q1 Guidance Q2 Guidance Q3 Guidance Q4 Guidance FY 2024 Guidance Silver Production (million ounces) 4.75 - 5.30 5.36 - 5.78 5.44 - 5.97 5.45 - 5.95 21.00 - 23.00 Gold Production (thousand ounces) 204 - 231 221 - 252 229 - 258 226 - 259 880 - 1,000 Silver Segment Cash Costs (2) 16.50 - 18.50 15.50
Slide 32: 2024 capital expenditure outlook
32 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
Slide 33: Dividend Policy and Normal Course Issuer Bid
33 Dividend Policy Normal Course Issuer Bid Pan American supplements a base dividend of $0.10 per common share Pan American believes that the market price of its common shares, from with a variable dividend, paid on a quarterly basis, that is linked to the net time to time, may not fully reflect the
Slide 34: ESG structure and accountability
34 // 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 30% sustainability and ESG performance. • The Health, Safety, and Environment (HSE) Committee provides policy direction and oversigh
Slide 35: Silver supply deficit
35 // ~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 36: Solar and automotive silver demand
36 // 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 37: Industrial demand from decarbonization and electrification
37 // 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 38: El Peñon
38 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 39: La Colorada
39 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 40: Shahuindo
40 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 41: Timmins
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 • Exploration succe
Slide 42: Huaron
42 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 43: San Vicente
43 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 44: La Arena
44 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 45: Cerro Moro
45 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 46: Minera Florida
46 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 47: Dolores
47 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 48: La Arena II
48 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 49: Navidad
49 49 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 50: La Colorada Skarn mineral resources
50 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 51: La Colorada Skarn PEA summary
51 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 $22
Slide 52: Mineral Reserves as of June 30, 2023
52 As of June 30, 2023 (1,2) Tonnes Ag Contained Au Contained Cu Contained Contained Contained (1) See table below entitled Property Location Classification Pb (%) Zn (%) (Mt) (g/t) Ag (Moz) (g/t) Au (Koz) (%) Cu (Kt) Pb (Kt) Zn (Kt) "Metal price assumptions Silver Segment used to estimate mineral H
Slide 53: Measured and Indicated Mineral Resources
Pan American Silver Corporation Measured and Indicated Mineral Resources as of June 30, 2023(1)(2)(3) Tonnes Contained Contained Property Location Classification (Mt) Ag (g/t) Ag (Moz) Au (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Huaron Peru Measured 1.4 180 8.2 0.30 1.95 3.15 Indicated 1.8 173 10.2 0.30
Slide 54: Inferred Mineral Resources
54 as of June 30, 2023 (1,2,3) Pan American Silver Corporation Inferred Mineral Resources as of June 30, 2023(1)(2)(3) Tonnes Ag Contained Au Contained Property Location Classification (Mt) (g/t) Ag (Moz) (g/t) Au (koz) Cu (%) Pb (%) Zn (%) Silver Segment Huaron Peru Inferred 5.9 164 31.2 0.35 1.76
Slide 55: Metal Price Assumptions for Reserves and Resources
55 Metal Price Assumptions Used to Estimate Mineral Reserves and Mineral Resources as of June 30, 2023 Property Category Ag US$/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 56: Technical and cautionary notes
56 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 57: Investor Relations contact
57 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 (May 2024) on 6ix