Pan American Silver Announces 2023 Production and Cost Guidance

Press Release

April 27, 2023

VANCOUVER, British Columbia – Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) (“Pan American”) today provided its guidance for production, costs and certain expenditures in 2023. Pan American completed its previously announced transaction with Yamana Gold Inc. (“Yamana”) on March 31, 2023, resulting in the addition of four producing mines (the “Acquired Operations”), plus several exploration and development projects in Chile, Brazil and Argentina. The guidance reflects the contribution from the Acquired Operations for the nine-month period from March 31 to December 31, 2023. Guidance for the original Pan American operations reflect the full 12-month period of 2023.

“The 2023 guidance is in line with our expectation for a material increase in silver and gold production together with lower consolidated operating costs following the acquisition of Yamana, indicative of the accretive nature of the transaction,” said Michael Steinmann, President and Chief Executive Officer of Pan American. “The integration is progressing well and after only one month of ownership of the Acquired Operations, we are on track to realize the $40 to $60 million in annual synergies we had identified. Our teams are now focused on delivering the production and cost targets through the safe, efficient and environmentally sound operation of our mines.”

Pan American reports mines under either a Silver Segment or a Gold Segment with costs calculated on a by-product basis (by-product metal sales a credit to costs to produce the primary metal for that segment). Yamana reported production and costs in gold equivalent ounces (“GEO”), which is not directly comparable to the way in which Pan American reports its production and costs.

The guidance also incorporates the application of Pan American’s accounting and reporting policies to the Acquired Operations, of which the most significant changes relate to re-allocating large portions of previously capitalized mine development to operating expenses, and re-categorizing certain capital expenditures (including exploration and tailings facility expansions) from project capital to sustaining capital. This re-categorization will result in higher all-in sustaining costs (“AISC”). Specifically, for the Acquired Operations in 2023, Pan American is providing project capital guidance for Jacobina only, where it will be invested to complete certain growth-related projects that were already underway prior to the closing of the transaction with Yamana and to initiate a comprehensive mine optimization study. For the remaining Acquired Operations, all capital expenditures are being classified as sustaining capital for the remainder of 2023.

The following estimates contain forward-looking information about expected future events and financial and operating performance of Pan American. Readers should refer to the risks and assumptions set out in the “Cautionary Note Regarding Forward-Looking Statements and Information” at the end of this news release. Pan American may revise forecasts during the year to reflect actual results to date and those anticipated for the remainder of the year.

2023 Production and Cost Forecast

	Silver Production (million ounces)	Gold Production (thousand ounces)	Cash Costs ($ per ounce)(1)	AISC ($ per ounce)(1)
Silver Segment:
La Colorada (Mexico)	5.5 – 5.9	3	14.00 – 15.50	17.00 – 18.50
Cerro Moro (Argentina)(2)	3.6 – 3.9	77 – 85	5.50 – 8.80	11.00 – 14.50
Huaron (Peru)	3.6 – 3.8	—	5.80 – 7.30	11.50 – 13.00
San Vicente (Bolivia)(3)	2.5 – 2.6	—	14.10 – 15.90	16.00 – 17.50
Manantial Espejo (Argentina)(4)	0.2	2	11.80 – 12.90	13.70 – 14.80
Total	15.4 – 16.4	82 – 90	10.00 – 12.00	14.00 – 16.00
Gold Segment:
Jacobina (Brazil)(2)	—	144 – 164	750 – 810	1,020 – 1,110
El Peñón (Chile)(2)	2.9 – 3.5	122 – 142	600 – 770	785 – 985
Timmins (Canada)	—	130 – 141	1,340 – 1,480	1,650 – 1,800
Shahuindo (Peru)	0.3	134 – 146	780 – 920	1,300 – 1,470
La Arena (Peru)	—	98 – 106	1,200 – 1,270	1,600 – 1,690
Minera Florida (Chile)(2)	0.2 – 0.3	62 – 74	1,340 – 1,430	1,700 – 1,850
Dolores (Mexico)	2.2 – 2.5	98 – 107	1,110 – 1,240	1,230 – 1,360
Total	5.6 – 6.6	788 – 880	975 – 1,100	1,275 – 1,425
12-months Pan American Original Assets Production(5)	14.3 – 15.3	465 – 505	n/a	n/a
9-months Acquired Operations Production(6)	6.7 – 7.7	405 – 465	n/a	n/a
Total Production	21.0 – 23.0	870 – 970	n/a	n/a

(1)		AISC is a non-GAAP measure. Please refer to the “Alternative Performance (Non-GAAP) Measures” section of this news release for further information on this measure. The AISC forecast assumes metal prices of $22.00/oz for silver, $1,850/oz for gold, $3,000/tonne ($1.36/lb) for zinc, $2,100/tonne ($0.95/lb) for lead, and $8,000/tonne ($3.63/lb) for copper; and average annual exchange rates relative to 1 USD of 18.75 for the Mexican peso (“MXN”), 3.75 for the Peruvian sol (“PEN”), 257.00 for the Argentine peso (“ARS”), 7.00 for the Bolivian boliviano (“BOB”), $1.33 for the Canadian dollar (“CAD”), $800.00 for the Chilean peso (“CLP”) and $5.00 for the Brazilian real (“BRL”).
(2)		2023 production and AISC forecasts for Cerro Moro, Jacobina, El Peñón and Minera Florida reflects ownership for the nine- month period from March 31 to December 31, 2023.
(3)		San Vicente data represents Pan American’s 95.0% interest in the mine’s production.
(4)		Mining activities have been completed at Manantial Espejo and the operation was placed on care and maintenance at the end of 2022.
(5)		Includes La Colorada, Huaron, San Vicente, Manantial Espejo, Timmins, Shahuindo, La Arena and Dolores mines.
(6)		Reflects ownership of the Cerro Moro, Jacobina, El Peñón and Minera Florida mines for the nine-month period from March 31 to December 31, 2023.

2023 Consolidated Base Metal Production Forecast

	Zinc (kt)	Lead (kt)	Copper (kt)
Consolidated Production	41 – 45	18 – 21	5

2023 Capital Expenditure Forecast

	Expenditures ($ millions)
Sustaining Capital
La Colorada (Mexico)	15.0 – 16.0
Cerro Moro (Argentina)	20.0 – 21.0
Huaron (Peru)	17.0 – 18.0
San Vicente (Bolivia)	3.5 – 4.5
Jacobina (Brazil)	42.0 – 44.0
El Peñón (Chile)	25.5 – 26.5
Timmins (Canada)	41.0 – 43.0
Shahuindo (Peru)	72.0 – 74.0
La Arena (Peru)	38.0 – 40.0
Minera Florida (Chile)	24.0 – 25.0
Dolores (Mexico)	7.0 – 8.0
Sustaining Capital Sub-total	305.0 – 320.0
Project Capital
La Colorada Projects (Mexico)	16.0 – 18.0
Huaron Projects (Peru)	22.0 – 25.0
Timmins Projects (Canada)	11.0 – 13.0
Jacobina Projects (Brazil)	26.0 – 29.0
Project Capital Sub-Total	75.0 – 85.0
Total Capital Expenditures	380.0 – 405.0

In 2023, Pan American plans to invest an estimated $75 to $85 million of project capital in the following projects.

• At Jacobina, $26 to $29 million of project capital will be invested during the nine-months of 2023 to stabilize the operation with the expansion underway, which involves upgrading plant facility infrastructure to sustain a gold recovery of about 96%.
• At La Colorada, $16 to $18 million of project capital will be invested in: continued exploration and in-fill drilling on the Skarn project; advancing engineering work towards a preliminary economic assessment for the Skarn project, which is expected to be released in the second half of 2023; and advancing construction of the concrete-lined ventilation shaft, which is expected to benefit both the long-term development of the Skarn project, as well as the current vein-system operation. We expect to complete the concrete-lined ventilation shaft by the end of 2023 and install and commission the high-capacity fans in mid-2024. The shaft is currently at a depth of 270 metres, with the final depth being 560 metres. Pan American assumes mining ore below reserve grades until this additional infrastructure for the ventilation system is commissioned.
• At Huaron, $22 to $25 million of project capital will be invested in advancing the construction of a tailings pressure filtration plant and a dry-stack tailings storage facility to replace the conventional tailings storage facility currently in operation. The project is expected to be completed in 2024 and operational thereafter.
• At Timmins, $12 to $13 million of project capital will be invested in the construction of a paste fill plant at Bell Creek, which will improve backfill quality and availability for more effective ground support systems and to increase resource recovery and throughput.

General and Administrative and Greenfield Exploration Expenditures

In order to include ongoing adjustments, management intends to provide estimates for annual 2023 consolidated general and administrative expenses, greenfield exploration expenditures and care and maintenance spending as part of the unaudited financial results for the first quarter of 2023, scheduled to be released on May 10, 2023 after market close.

Strong Financial Position Post Completion of Yamana Acquisition

As at March 31, 2023, Pan American had cash and short-term investments of $513.1 million, inclusive of $204.7 million related to the MARA project in Argentina, and $425.0 million available under its $750.0 million revolving Sustainability-Linked Credit Facility.

Conference Call and Webcast

Date:			April 27, 2023
Time:			11:00 am ET (8:00 am PT)
Dial-in numbers:			1-877-883-0383 (toll-free in Canada and the U.S.)
			+1-412-902-6506 (international participants)
Conference ID:			9134520
Webcast:			https://edge.media-server.com/mmc/p/mk5c7bnu/

The live webcast and presentation slides will be available at https://www.panamericansilver.com/invest/events-and-presentations/. An archive of the webcast will also be available for three months.

Technical Information

Scientific and technical information contained in this news release have been reviewed and approved by Martin Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, and Christopher Emerson, FAusIMM, Vice President Business Development and Geology, each of whom is a Qualified Person, as the term is defined in Canadian National Instrument 43-101 – Standards of Disclosure of Mineral Projects.

For additional information about Pan American Silver’s material mineral properties, please refer to Pan American Silver’s Annual Information Form dated February 22, 2023, filed at www.sedar.com, or Pan American Silver’s most recent Form 40-F filed with the SEC. For further information about the Yamana material mineral properties, please refer to Yamana’s Annual Information Form dated March 29, 2023, filed at www.sedar.com or Yamana’s most recent Form 40-F filed with the SEC.

For more information about Pan American:
Siren Fisekci
VP, Investor Relations & Corporate Communications
Ph: 604-806-3191
Email: [email protected]

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