Pan American Silver Corp. · TSX:PAAS
Pan American Silver — Q2 2022 Earnings Presentation
26 slides from Pan American Silver's earnings presentation, Aug 11, 2022
Slide 1: Conference Call, August 11, 2022
1 CONFERENCE CALL // AUGUST 11, 2022
Slide 2: Non-GAAP Measures
2 performance, including our estimated production of silver, gold and other operations, or to successfully maintain our operations on care and metals forecasted for 2022, our estimated Cash Costs and AISC, and our maintenance, should the situation related to COVID-19 not be as anticipated; sustainin
Slide 3: Continued
3 CONTINUED to Pan American Silver Corp. has been reviewed and approved by Martin mineral resources”, ‘‘inferred mineral resource estimate’’. U.S. investors are Wafforn, P.Eng., SVP Technical Services and Process Optimization, and Chris advised that, while such terms are recognized and required by C
Slide 4: Q2 2022 highlights
4 NASDAQ: PAAS // TSX: PAAS Strong production at La Colorada Replaced 11Moz Ag and 96.1 koz Au of mineral reserves mined in 2022 Consolidated production remains Strong financial position and dividend backend loaded in 2022 of $0.11 per common share Recorded a net loss largely due to Guidance maintai
Slide 5: Revenue, mine operating earnings, net (loss) earnings
5 unaudited in millions of US$, except per share amounts Q2 2022 H1 2022 Revenue 340.5 780.4 Mine operating earnings (31.7) 35.1 Net (loss) earnings (173.6) (96.8) Basic (loss) earnings per share(1) (0.83) (0.46) Adjusted (loss) earnings(2) (6.5) 25.5 Basic adjusted (loss) earnings per share(1)(2) (
Slide 6: Silver and gold production by mine
6 Silver Production Gold Production (ounces ‘000s) (ounces ‘000s) Q2 2022 H1 2022 Q2 2022 H1 2022 La Colorada 1,675 3,095 1.0 1.6 Huaron 882 1,780 0.2 0.4 Morococha(1) — 324 — 0.1 San Vicente(2) 646 1,122 — 0.1 Manantial Espejo 693 1,595 5.2 11.3 Dolores 572 1,090 35.2 69.7 Shahuindo 59 125 31.6 65.
Slide 7: La Colorada silver production
7 //Improvements in mine ventilation have resulted in rising production, briefly interrupted by Omicron surge in Q1 2022 1.68 1.58 1.42 1.42 Silver Production (million Oz) 1.07 1.10 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2022 Q1 2022 Q2
Slide 8: Cash Costs and AISC by mine
8 Cash Costs(1) AISC(1) ($ per ounce) ($ per ounce) 1. Cash Costs and AISC are non-GAAP measures. Please refer to the Q2 2022 H1 2022 Q2 2022 H1 2022 “Alternative Performance (Non-GAAP) Measures” section of the MD&A for the period ended June 30, 2022 for a detailed description of these measures and
Slide 9: Realized metal prices and quantities of metal sold
9 Realized Metal Prices(1) Quantities of Metal Sold(2) Q2 2022 H1 2022 Q2 2022 H1 2022 Silver $22.03 $23.10 4,252 9,142 Gold $1,850 $1,867 119.3 267.4 Zinc $3,811 $3,802 8.0 16.0 Lead $2,162 $2,261 4.0 8.9 Copper $9,731 $9,753 1.1 2.8 1. Metal price stated as dollars per ounce for silver and gold, a
Slide 10: Payable metal produced and sold
10 Silver Gold Mine/Product Payable Metal Quantities of Inventory Produced(1,2) Metal Sold build/(draw)(3) 34.2 thousand ounces build 8.5 thousand ounces build Silver (thousand ounces) La Colorada 1,585.2 1,374.1 211.1 Payable Metal Sold Metal Payable Huaron 745.2 683.9 61.3 4,251.9 Produced Metal S
Slide 11: Cash flow performance Q2 2022
11 Growth, Business Development, and Sustaining Cash Flow Performance Other $450 $96 $2 $400 $350 $326 ($56) $300 ($42) $281 ($25) ($20) $241 Millions $250 ($20) ($12) ($8) $200 $150 $100 $50 $0 Cash and STI Adjusted Net other (e.g. Sustaining Net income Dividends paid Net changes in Cash and STI No
Slide 12: Cash flow performance H1 2022
12 Sustaining Cash Flow Performance Growth, Business Development, and Other $650 $600 $249 $4 $550 $500 $450 ($112) $400 Millions $335 $350 ($101) $290 $300 ($51) ($35) $241 $250 $8 ($30) ($22) ($5) $200 $150 $100 $50 $0 Cash and STI Adjusted Net other Sustaining Net income Dividends Net changes Cas
Slide 13: Q2 2022 basic adjusted net loss
13 Q2 2022 Basic Adjusted Net Loss $0.03/share (1) Impairment Heap inventory charges on net realizable Unrealized Mine operation Effect of taxes Net Loss for the mineral value charge Investment loss foreign severance on adjusting Adjusted Loss period properties (recovery) (income) exchange losses pa
Slide 14: $241.3M total available liquidity
14 $241.3M //Prudent balance sheet management reduces Cash + Short Term risk, improves long-term shareholder returns Investments TOTAL AVAILABLE LIQUIDITY $741.3M Balance sheet management √ Total debt(2) of $63.2M related to equipment leases and construction loans Revolving $500.0M Credit √ Sustaina
Slide 15: $1.8B FCF 2010 – YTD 2022
15 8% 2% Treasury Build, net Share of other Repurchases 27% // $1.8B in FCF generated since 2010, returning $621M to Dividends shareholders (2) and investing $672M in expansions 25% Debt $1.8B FCF Repayment(3) 2010 – YTD 2022 Cash Flow Priorities 1 Maintain balance sheet flexibility, with low to zer
Slide 16: Production guidance expected to be at the low end of the ranges
16 2022 August 2022 Production guidance Operating Outlook Revised Operating Outlook expected to be at the Annual Production low end of the ranges. Silver - Moz 19.0 - 20.5 No change Gold Segment AISC Gold - koz 550.0 - 605.0 No change and Capital Zinc - kt 35.0 - 40.0 No change Expenditures revised.
Slide 17: 2022 Quarterly Operating Outlook
17 2022 Quarterly Operating Outlook Q1 Q2 Q3 Q4 FY 2022 Silver Production (million ounces) 4.49 - 4.87 4.69 - 5.07 4.89 - 5.27 4.94 - 5.30 19.00 - 20.50 Gold Production (thousand ounces) 133.0 - 146.4 124.9 - 137.7 135.2 - 148.8 157.0 - 172.2 550.0 - 605.0 Silver Segment Cash Costs (1) 11.10 - 12.75
Slide 18: Sustaining capital increased to $240M–$250M
18 Expenditures ($ millions) Sustaining capital 2022 August 2022 increased to between Operating Outlook Revised Operating Outlook $240M and $250M due Sustaining Capital to a change in the La Colorada 28.0 - 29.0 No change financing of certain Huaron 16.0 - 19.0 No change planned sustaining San Vicen
Slide 19: Mineral reserves and resources as at June 30, 2022
19 // as at June 30, 2022 Contained Contained Tonnes (Mt) Ag (g/t) Au (g/t) Ag (Moz) Au (Moz) Proven Reserves 116 60 174.5 0.61 2.0 Probable Reserves 112 124 340.4 0.48 1.6 Proven and Probable Reserves 228 91 514.9 0.54 3.6 Measured Resources 203 89 128.0 0.39 2.3 Indicated Resources 752 118 710.6 0
Slide 20: Proven and probable reserves by property
20 Property Location Classification Tonnes Ag Contained Au Contained Cu (%) Contained Pb (%) Contained Zn (%) Contained (Mt) (g/t) Ag (Moz) (g/t) Au (koz) Cu (kt) Pb (kt) Zn (kt) Silver Segment Huaron Peru Proven 7.0 169 38.1 0.54 38.0 1.51 105.6 2.97 208.2 Probable 3.9 167 21.1 0.30 11.8 1.63 64.2
Slide 21: Measured and indicated resources by property
21 Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag (Moz) Au (g/t) Contained Au (koz) Cu (%) Pb (%) Zn (%) Silver Segment Huaron Peru Measured 2.1 163 10.9 0.42 1.58 3.05 Indicated 2.4 166 12.7 0.40 1.71 2.92 Morococha (92.3%) (3) Peru Measured 0.6 130 2.7 0.64 0.79 2.59 Indicated
Slide 22: Inferred resources by property
22 Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag Au (g/t) Contained Au Cu (%) Pb (%) Zn (%) (Moz) (koz) Silver Segment Huaron Peru Inferred 7.2 155 36.1 0.26 1.47 2.73 Morococha (92.3%) (3) Peru Inferred 5.2 143 24.0 0.35 1.28 3.74 La Colorada Mexico Inferred 14.9 195 93.9 0.20
Slide 23: Metal price assumptions for reserves and resources
23 Mine Category Ag US$/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 1,300 7,000 2,000 2,600 La Colorada Skarn All categories 18.50 6,500 2,200 2,600 Reserves 19.00
Slide 24: QA/QC and cautionary notes on mineral estimates
24 analytical, and security procedures followed for the samples are sufficient and reliable for the purpose of this mineral resource and mineral reserve estimates. Pan American is not aware of any drilling, sampling, recovery or other factors that could materially affect the accuracy or reliability
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Slide 26: Audio and presentation archive
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/