Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Q2 2020 Earnings Presentation
20 slides from Pan American Silver's earnings presentation, Aug 6, 2020
Slide 1: Q2 2020 Earnings Review
Q2 2020 Earnings Review 1 August 6, 2020
Slide 2: Cautionary Note
Cautionary Note Non-GAAP Measures This presentation of Pan American Silver Corp. and its subsidiaries (collectively, “Pan American”, “Pan American Silver”, the “Company”, “we” or “our”) refers to various non-GAAP measures, such as “AISC", “cash costs per ounce sold”, “adjusted earnings” and “basic a
Slide 3: Cautionary Note
Cautionary Note These forward-looking statements and information reflect Pan American’s current views with respect to future events and are necessarily based upon a number of assumptions that, while considered reasonable by Pan American, are inherently subject to significant operational, business, e
Slide 4: Cautionary Note to U.S. Investors Concerning Estimates of Mineral Reserves and Resources
Cautionary Note to U.S. Investors Concerning Estimates of Mineral Reserves and Resources This presentation has been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all mineral reserve an
Slide 5: Status of Operations
Status of Operations Mexico Operations were suspended in early April 2020. • La Colorada: operations and exploration drilling of skarn discovery resumed May 24, 2020. • Dolores: operations resumed June 1, 2020; production from circulation of process solutions on the heap leach pad continued througho
Slide 6: COVID-19: Our Response
COVID-19: Our Response Protocols and practices implemented across our operations Protecting Health & Safety • Complying with all recommended health & safety protocols in the jurisdictions where we operate. • Pre-screening of employees prior to arrival at site, including mandatory COVID-19 testing in
Slide 7: Crystallizing Value for Portfolio Assets
Crystallizing Value for Portfolio Assets • Maverix Metals Inc. (MMX) – realized gross proceeds of $45.54M through secondary offering of 10.35M shares. Exercised 8.25M warrants at cost of $15.6M. PAAS now owns a ~19.9% undiluted interest in MMX. (1) • New Pacific Metals Corp. (NUAG) – realized gross
Slide 8: Consolidated Financial Results
Consolidated Financial Results Unaudited in millions of US$, except per share amounts Q2 2020 Q2 2019 Revenue 249.5 340.5 Mine operating earnings 48.4 51.1 Net income 19.4 18.5 Basic income per share(1) 0.10 0.09 Adjusted income(2) 58.4 13.4 Basic adjusted income per share(1) 0.28 0.06 Net cash gene
Slide 9: Q2 2020 Consolidated Cash Flows
Q2 2020 Consolidated Cash Flows (1) (1) (2) (1) (1) (1) (1) (1) “STI” means short-term investments, “NCI” means non-controlling interests, and “D&A” means depreciation and amortization. (2) Net cash generated from operating activities before changes in working capital, interest and income taxes paid
Slide 10: Reconciliation of adjusted (loss) earnings to GAAP net (loss) earnings
Reconciliation of adjusted (loss) earnings to GAAP net (loss) earnings In US$ millions $90 $80 $2 $1 $2 $2 $5 $70 $47 $58 $60 ($14) ($5) ($1) $50 $40 $30 $19 $20 $10 $0 Net COVID-19 Net Write-down Loss on sale Unrealized Effect of Effect of Unrealized Derivative Adjusted earningsfor related mine rea
Slide 11: Liquidity and Capital Position
Liquidity and Capital Position US$ Millions June 30, 2020 Cash and Short-term Investments 261.6 Working Capital(1) 471.6 Amount drawn on Revolving Credit Facility* 200.0 Total Debt(2) 236.9 *In August 2020, Pan American made an additional repayment on the Credit Facility of $40M. (1) Working capital
Slide 12: Production
Production Silver Production Gold Production (ounces ‘000s) (ounces ‘000s) Q2 2020 Q2 2019 Q2 2020 Q2 2019 Silver Segment: La Colorada 801 2,045 0.6 1.1 Dolores 915 1,226 17.7 28.5 Huaron 211 948 0.1 0.2 Morococha(1) 47 615 - 0.3 San Vicente(2) 265 940 - 0.1 Manantial Espejo/COSE/Joaquin 503 652 3.5
Slide 13: Cash Cost and AISC
Cash Cost and AISC Cash Costs (1) AISC (1) ($ per ounce) ($ per ounce) Q2 2020 Q2 2019 Q2 2020 Q2 2019 La Colorada 7.13 2.82 12.56 5.07 Dolores 2.23 6.87 12.95 22.30 Huaron 3.93 1.64 6.61 4.45 Morococha 12.90 3.69 17.42 10.47 San Vicente 2.61 10.18 4.52 10.60 Manantial Espejo 16.24 18.35 16.54 14.01
Slide 14: Cash Flow Priorities
Free Cash Flow Allocation(1)(2) • Since 2010, returned $474M to shareholders (dividends and share buy-backs) and invested $582M in expansions • Increased quarterly dividend by 43% to $0.05/share in February 2020 2% 18% 25% Return to shareholders through dividends ~$1.3 Cash Flow Priorities Billion I
Slide 15: Return to Shareholders
Return to Shareholders Maintained quarterly cash dividend of $0.05 per common share, payable on or about August 27, 2020(1) in US$ millions $350 $0.60 $300 $0.50 Annualized Dividend per Share $250 $142.5 M in Cumulative Dividends $0.40 share buy-backs $200 $0.30 $150 $0.20 $100 $0.10 $50 $0 $0.00 20
Slide 16: La Colorada Discovery
La Colorada Discovery Large, high-grade polymetallic skarn deposit Deposit located adjacent and below Pan American’s La Colorada vein system Inferred Mineral Resource Estimate(1) M Tonnes Ag g/t Cu % Pb % Zn % 100.4 44 0.20 1.77 4.29 85 diamond drill holes with a total length of 70,000 metres
Slide 17: Revised 2020 Guidance
Revised 2020 Guidance Pan American withdrew its 2020 Guidance, as provided on March 12, 2020, due to uncertainties around COVID-19 on operations. Revised 2020 Guidance is at August 5, 2020(1). Silver Production Gold Production Cash Costs AISC (million ounces) (thousand ounces) ($ per ounce)(2) ($ pe
Slide 18: Revised 2020 Capital Expenditures Guidance
Revised 2020 Capital Expenditures Guidance(1) 2020 Capital Investment Project ($ million) La Colorada 19.0 - 19.5 Dolores 42.0 - 42.5 Huaron 5.5 - 6.0 Morococha 5.5 - 6.0 Sustaining San Vicente 3.5 - 4.0 Manantial Espejo, COSE, and Joaquin 3.0 Shahuindo 44.5 - 45.5 La Arena 40.0 - 41.0 Timmins 23.0
Slide 19: Q&A
Q&A To join the queue: Press * and 1 on your touch-tone telephone. You will hear a tone acknowledging your request. If you wish to remove yourself from the queue, press * and 2 19
Slide 20: Archived recording
Archived recording The audio and presentation archive of this conference call and webcast will be accessible on our website at: https://www.panamericansilver.com/investors/events-and-presentations/ 20