4. PAAS â an investment in silver
ĂźPrimary silver producer â 25.4 Moz in 2016
ĂźGrowing production profile
ĂźLow-cost silver producer
Ăź286 Moz proven and probable silver reserves (1)
ĂźSignificant exploration potential
Ăź Experienced mine builder and operator
Ăź Strong balance sheet
ĂźPaying dividends since 2010
4 June 6, 2017(1) Please refer to the Appendix for more detailed information on the Companyâs reserves.
8. Progress reducing costs
8 June 6, 2017
$12.03
$6.29
$22.26
$10.17
$0
$5
$10
$15
$20
$25
2012 2013 2014 2015 2016
Cash Costs AISCSOS
Consolidated Cash Costs per payable ounce of silver, net of by-products (âCash Costsâ)1
Consolidated All-in Sustaining Costs per Silver Ounce Sold (âAISCSOSâ)1
(1) Cash Costs and AISCSOS are non-GAAP financial measures; see âAlternative Performance (non-GAAP) Measuresâ section of the Managementâs Discussion
& Analysis for the period ended December 31, 2016 for a more detailed discussion of this and other non-GAAP measures and their calculation.
Main drivers of 2016 cost
reduction:
⢠Improved productivity ~45%
⢠FX gains ~30%
⢠Higher by-product prices ~15%
⢠Generally lower input costs and
export credits ~10%
9. Q1 2017 unaudited financial results
Consolidated Financial Highlights Q1 2017 Q1 2016
Revenue ($ millions) 198.7 158.3
Net earnings ($ millions)
per share
20.0
0.13
1.9
0.01
AISCSOS ($/ounce) (1) 12.63 13.12
Operating cash flow before changes in non-cash
operating working capital ($ millions)(2)
per share
40.8
0.27
28.4
0.19
9
(1) AISCSOS is a non-GAAP measure; see the âAlternative Performance (non-GAAP) Measuresâ section of Pan Americanâs Managementâs Discussion & Analysis for the period
ended March 31, 2017 for a more detailed discussion of this and other non-GAAP measures and their calculation.
(2) Operating cash flow before changes in non-cash operating working capital is a non-GAAP measure calculated as net cash generated from operating activities less changes
in non-cash operating working capital, per share amounts are calculated using the basic weighted average shares outstanding for the period.
June 6, 2017
11. Financial strength
USD Millions
Cash and cash equivalents and short-term investments 205.4
Working capital (1) 423.0
Total debt (2) 43.8
Total available liquidity (3) 469.2
At March 31, 2017
11 June 6, 2017
(1) Working capital is a non-GAAP measure calculated as current assets less current liabilities. The Company and certain investors use this
information to evaluate whether the Company is able to meet its current obligations using its current assets.
(2) Total debt is a non-GAAP measure, and is inclusive of $7.6 million in capital leases.
(3) Total available liquidity is a non-GAAP measure, and includes cash and cash equivalents, short-term investments, and the undrawn portion of the
Companyâs secured line of credit.
12. Q1 2017 operating results
Consolidated Q1 2017 Q1 2016
Silver production (million ounces) 6.2 6.4
Gold production (thousand ounces) 37.7 41.2
Zinc production (thousand tonnes) 12.8 12.8
Lead production (thousand tonnes) 5.3 4.8
Copper production (thousand tonnes) 3.2 3.9
Cash Costs(1) ($/ounce) 6.18 8.03
12 June 6, 2017
(1) Cash Costs per payable ounce of silver, net of by-product credits. Average by-product metal prices for Q1 2017 were: Au $1,219/oz, Zn $2,780/tonne,
Pb $2,278/ton. ne, and Cu $5,831/tonne. Average by-product metal prices for Q1 2016 were: Au $1,183/oz, Zn $1,679/tonne, Pb $1,744/tonne, and Cu
$4,672/tonne. Cash Costs is a non-GAAP measure; see the âAlternative Performance (non-GAAP) Measures" section of Pan Americanâs Managementâs
Discussion & Analysis for the period ended March 31, 2017 for a more detailed discussion of this and other non-GAAP measures and their calculation.
16. 0
50
100
150
200
250
300
350
400
450
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
2010 2011 2012 2013 2014 2015 2016 2017
Silver Grade (g/tonnes)
Million Tonnes
Probable (Mt)
Proven (Mt)
Silver Grade
(g/t)
La Colorada reserves increase >200%
16 June 6, 2017
30.4 Moz Ag
38.3 Moz Ag
44.1 Moz Ag
64.8 Moz Ag
81.4 Moz Ag
86 Moz Ag
91.2 Moz Ag
For La Coloradaâs complete mineral reserve details, please see Appendix.
98.1 Moz Ag
17. La Colorada expansion (1)
17 June 6, 2017
Highlights
⢠69% increase expected in average annual
silver production to 7.7 Moz by 2018
⢠137% and 185% increase expected in zinc
and lead production, respectively, by 2018
Project Scope
⢠New 618-metre deep mine shaft â fully
commissioned in Q3 2016
⢠New sulphide processing plant â began
operating Q3 2016
⢠Underground development to open new
production areas â advancing on schedule for
completion in 2017
⢠New 115kV power line - targeted for
completion in 2017
(1) For additional information, please refer to the Companyâs technical report entitled âTechnical Report â Preliminary Economic Analysis for the Expansion of the La Colorada Mine, Zacatecas, Mexicoâ,
with an effective date of Dec. 31, 2013 available at www.SEDAR.com. The results of this preliminary economic assessment are preliminary in nature, in that it includes inferred mineral resources that are
considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the assessment
will be realized. Mineral resources that are not mineral reserves have no demonstrated economic viability.
Original investment of $163.8M, including sustaining
capital. Project expected to be ~5% under budget
18. Dolores expansion (1)
18 June 6, 2017
Highlights
⢠Increases average production for the first 5
years to:
5.3 Moz for silver (+39% vs 2016)
151 koz for gold (+47% vs 2016)
Project Scope
⢠New 5,600 tpd pulp agglomeration plant -
scheduled for start-up in mid 2017
⢠New underground mine - scheduled to
reach 1,500 tpd by end of 2017
⢠New 115 kV power line - energized in
September 2016
(1) For additional information, please refer to the Companyâs technical report entitled âTechnical Report for the Dolores Property, Chihuahua, Mexicoâ, with an effective date of Dec. 31, 2016
available at www.SEDAR.com.
Estimated capital investment ~$132.4 M (incl. power line)
Project on time and on budget
20. Exploration and production growth
20 June 6, 2017
⢠2017 exploration budget of US$21M, up 45% from 2016
⢠Solid performance on replacing 2016 production with new silver reserves
⢠La Colorada continues to deliver both new reserves and extension to mine life
⢠High potential at Peru operations; near site and greenfield exploration
⢠La Negra (Kootenay Silver Inc.), Joaquin and COSE bring advanced silver exploration
projects into the pipeline with excellent regional exploration potential
⢠100% owner of Navidad, one of the largest undeveloped silver deposits in the
world:
Navidad Silver Resources (1) Contained Ag
(Moz)
Tonnes
(Mt)
Ag (g/t)
Measured (contained Moz) 67.8 15.4 137
Indicated (contained Moz) 564.5 139.8 126
Inferred (contained Moz) 119.4 45.9 81
(1) Estimated using a price of $12.52/oz of silver
22. Adding high-grade deposits to realize further
value at Manantial Espejo
22 June 6, 2017
⢠Pan American has acquired:
⢠100% of Coeur Miningâs Joaquin project (1)
⢠100% of Patagonia Goldâs Cap-Oeste Sur Este
project (COSE) (2)
⢠Both offer synergies with Pan Americanâs
Manantial Espejo operation
⢠Processing capacity available at Manantial
Espejo plant
⢠Projects are within trucking distance
⢠Potential for further exploration success
Joaquin is located about 145
km and COSE 180 km from
our Manantial Espejo mine
(1) For more information see press release dated Jan. 17, 2017
(2) For more information see press release dated April 25, 2017
25. PAAS company snapshot
25 June 6, 2017
Ticker TSX/NASDAQ PAAS
Shares outstanding 153.1 M
Market cap1 US$2.7 B
Avg. daily volume1 2.0 M
Yield2 0.6%
Total debt3 $43.8 M
Total available liquidity4 $469.2 M
All data as of close May 26, 2017
(1) Based on NASDAQ exchange
(2) Based on closing share price at May 26, 2017 and dividend declared May 9, 2017, annualized
(3) Total debt is a non-GAAP measure, and is inclusive of $7.6 million in capital leases.
(4) Total available liquidity is a non-GAAP measure, and includes cash and cash equivalents, short-term investments, and the undrawn portion of the Companyâs
secured line of credit.
See the âAlternative Performance (non-GAAP) Measuresâ section of Pan Americanâs Managementâs Discussion & Analysis for the period ended March 31, 2017
for a more detailed discussion of these and other non-GAAP measures and their calculation.
28. Q1 2017 capital expenditures
28 June 6, 2017
Mine US$M
La Colorada 2.2
Dolores 8.4
Huaron 2.6
Morococha 2.3
San Vicente 1.6
Manantial Espejo 1.1
Total Sustaining Capital 18.2
La Colorada Expansion Project 1.8
Dolores Expansion Project 13.1
Total Non-Sustaining Capital 14.9
Total Capital Expenditures 33.1
29. Q1 2017 operating results by mine
29
Mine Ag Production
(Moz)
Au Production
(koz)
$ Cash Costs (1)
La Colorada 1.63 0.87 3.01
Dolores 0.96 24.39 (1.67)
Alamo Dorado 0.35 1.33 21.29
Huaron 0.90 0.25 0.77
Morococha (2) 0.64 0.60 (3.18)
San Vicente (2) 0.93 0.12 12.47
Manantial Espejo 0.79 10.13 20.38
TOTAL (3) 6.20 37.70 6.18
(1) Cash costs per ounce of silver, net of by-product credits. Cash cost is a non-GAAP measure. Cash costs does not have a standardized meaning
prescribed by IFRS as an indicator of performance. The Companyâs method of calculating cash costs may differ from the methods used by
other entities and, accordingly, the Companyâs cash costs may not be comparable to similarly titled measures used by other entities; see the
âAlternative Performance (Non-GAAP) Measuresâ section of the Companyâs Managementâs Discussion & Analysis for the period ended March
31, 2017, for a more detailed description of this measure and its calculation.
(2) Represents the Companyâs partial ownership interest.
(3) Totals may not add up due to rounding.
June 6, 2017
31. 2017 Guidance by mine
Mine
Silver Production
(million ounces)
Gold Production
(thousand ounces)
Cash Costs
($/ounce)(1)
La Colorada 6.4 - 6.9 3.3 - 3.5 3.35 - 3.95
Dolores 4.0 - 4.5 109.1 - 115.0 1.25 - 2.25
Alamo Dorado 0.3 1.4 - 1.5 18.00 - 20.00
Huaron 3.7 - 3.8 0.3 - 0.4 5.95 - 6.95
Morococha (92.3%)(2) 2.5 - 2.6 2.9 - 3.1 3.15 - 4.15
San Vicente (95%)(2) 4.4 - 4.5 0.5 - 0.6 10.90 - 11.90
Manantial Espejo 3.3 - 3.4 37.5 - 41.0 15.35 - 16.25
Total(3) 24.5 - 26.0 155.0 - 165.0 6.45 - 7.45
31 June 6, 2017
(1) Cash Costs is a non-GAAP measure; see the âAlternative Performance (Non-GAAP) Measuresâ section of the Companyâs Managementâs
Discussion & Analysis for the period ended March 31, 2017, for a more detailed description of this measure and its calculation.
(2) Reflects Pan Americanâs ownership in the operation.
(3) Totals may not add up due to rounding.
32. Three-year outlook
Consolidated 2017 Guidance 2018 Outlook 2019 Outlook
Silver production (million ounces) 24.5 â 26.0 26.0 - 28.0 26.5 â 29.5
Gold production (thousand ounces) 155 - 165 170 - 185 175 - 200
Zinc production (thousand tonnes) 56.5 - 58.5 59.0 - 63.0 55.0 - 65.0
Lead production (thousand tonnes) 19.0 - 20.0 23.0 - 26.0 23.0 - 27.0
Copper production (thousand tonnes) 8.75 - 9.25 6.00 - 8.00 4.00 - 4.20
Cash Costs(1)($/ounce) 6.45 - 7.45 5.60 - 7.10 5.20 â 6.80
Sustaining capital ($ millions) 82 - 88 75 - 85 75 - 90
Project Capital ($ millions) (2) 58 - 62 - -
AISCSOS(1) ($/ounce) 11.50 - 12.90 10.00 - 12.20 9.30 - 11.60
32 June 6, 2017
(1) Cash Costs and AISCSOS are non-GAAP measures; see the âAlternative Performance (non-GAAP) Measures" section of Pan Americanâs
Managementâs Discussion and Analysis for the period ended March 31, 2017 for more information.
(2) Project Capital relates to the current mine expansions at La Colorada and Dolores; 2017 is expected to be the final year of spending on
project capital related to these expansions.
33. Pan American Silver Proven and Probable
Reserves at December 31, 2016 (1) (2)
Property Location Category Tonnes
(Mt)
Ag
g/t
Contained
Ag (Moz)
Au
g/t
Contained
Au (000âs oz)
Cu
%
Pb
%
Zn
%
Huaron Peru Proven 5.7 169 30.8 N/A 0.37 1.46 3.02
Probable 3.8 167 20.6 N/A 0.38 1.62 3.10
Morococha (92.3%) (3) Peru Proven 2.6 173 14.6 N/A 0.58 1.18 3.78
Probable 2.2 181 12.8 N/A 0.44 1.64 4.21
La Colorada Mexico Proven 3.7 432 51.3 0.33 39.1 1.72 3.08
Probable 4.0 362 46.8 0.32 41.2 1.24 2.06
Dolores Mexico Proven 41.6 27 36.1 0.77 1,034.9
Probable 22.5 25 17.9 0.65 472.4
La Bolsa Mexico Proven 9.5 10 3.1 0.67 203.0
Probable 6.2 7 1.4 0.57 113.1
Manantial Espejo Argentina Proven 2.2 111 8.0 1.17 84.4
Probable 0.5 244 3.8 3.32 52.2
San Vicente (95%) (3) Bolivia Proven 2.0 464 29.4 N/A 0.46 0.39 3.00
Probable 0.5 531 9.2 N/A 0.56 0.45 2.52
Total (4) Proven +
Probable
107.0 83 285.8 0.70 2,040.3 0.43 1.36 3.06
33 June 6, 2017
(1) Prices used to estimate mineral reserves for 2016 were $18.50 per ounce of silver, $1,300 per ounce of gold, $2,200 per tonne of zinc, $2,000 per tonne of
lead, and $5,000 per tonne of copper, except at Manantial Espejo where $17.00 per ounce of silver and $1,200 per ounce of gold were used for planned
2017 production, reverting to $18.50 per ounce of silver and $1,300 per ounce of gold thereafter. Metal prices used for La Bolsa were $14.00 per ounce of
silver and $825 per ounce of gold.
(2) Mineral reserve estimates were prepared under the supervision of, or were reviewed by, Christopher Emerson, FAusIMM, Vice President Business
Development and Geology and Martin G. Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, each of whom are Qualified
Persons as that term is defined in National Instrument 43-101 (âNI 43-101).
(3) This information represents the portion of mineral reserves attributable to Pan American based on its ownership interest in the operating entity as indicated.
(4) Totals may not add up due to rounding.
34. 34
All Pan American Silver Measured and Indicated Resources (1)(2)
Property Location Category Tonnes (Mt) Ag g/t Au g/t Zn% Pb% Cu%
Huaron Peru Measured 2.2 165 2.93 1.57 0.27
Indicated 1.7 164 2.99 1.56 0.33
Morococha (92.3%)(3) Peru Measured 0.4 161 3.31 1.09 0.25
Indicated 1.1 127 3.26 0.93 0.56
La Colorada Mexico Measured 0.5 206 0.31 0.85 0.45
Indicated 2.0 200 0.18 0.63 0.39
Dolores Mexico Measured 1.9 13 0.22
Indicated 3.2 24 0.43
La Bolsa Mexico Measured 1.4 11 0.90
Indicated 4.5 9 0.50
Manantial Espejo Argentina Measured 0.1 125 1.65
Indicated 0.4 207 2.04
San Vicente (95%)(3) Bolivia Measured 0.8 202 2.45 0.14 0.30
Indicated 0.1 194 2.30 0.17 0.33
Navidad Argentina Measured 15.4 137 1.44 0.10
Indicated 139.8 126 0.79 0.04
Pico Machay Argentina Measured 4.7 0.91
Indicated 5.9 0.67
Calcatreu Argentina Measured
Indicated 8.0 26 2.63
Total (4) Measured +
Indicated
194.0 118 1.11 2.32 0.86 0.06
Notes:
(1) Prices used to estimate mineral resources for 2016 were $18.50 per ounce of silver, $1,300 per ounce of gold, $2,200 per tonne of zinc, $2,000 per tonne of lead, and
$5,000 per tonne of copper, except at Dolores and Manantial Espejo, where $25.00 per ounce of silver and $1,400 per ounce of gold were used. Metal prices used for La
Bolsa were $14.00 per ounce of silver and $825 per ounce of gold. Metal prices for Navidad were $12.52 per ounce of silver and $1,100 per tonne of lead. Metal prices
used for Calcatreu were $12.50 per ounce of silver and $650 per ounce of gold.
(2) Mineral resource estimates were prepared under the supervision of, or were reviewed by, Christopher Emerson, FAusIMM, Vice President Business Development and
Geology and Martin G. Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, each of whom are Qualified Persons as that term is defined in
National Instrument 43-101 (âNI 43-101).
(3) This information represents the portion of mineral resources attributable to Pan American based on its ownership interest in the operating entity as indicated.
(4) Totals may not add up due to rounding.
35. All Pan American Silver Inferred Resources(1)(2)
35
Property Location Category Tonnes (Mt) Ag g/t Au g/t Zn% Pb% Cu%
Huaron Peru Inferred 6.2 164 2.81 1.56 0.34
Morococha (92.3%)(3) Peru Inferred 3.9 214 3.58 1.30 0.29
La Colorada Mexico Inferred 1.8 313 0.35 4.58 2.65
Dolores Mexico Inferred 1.7 37 1.01
La Bolsa Mexico Inferred 13.7 8 0.51
Manantial Espejo Argentina Inferred 0.5 211 2.60
San Vicente (95%)(3) Bolivia Inferred 2.8 330 2.42 0.33 0.28
Navidad Argentina Inferred 45.9 81 0.57 0.02
Pico Machay Argentina Inferred 23.9 0.58
Calcatreu Argentina Inferred 3.4 17 2.06
Total (4) Inferred 103.7 92 0.70 2.83 0.77 0.08
Notes:
(1) Prices used to estimate mineral resources for 2016 were $18.50 per ounce of silver, $1,300 per ounce of gold, $2,000 per tonne of lead, $2,200 per tonne of zinc, and
$5,000 per tonne of copper, except at Dolores and Manantial Espejo, where $25.00 per ounce of silver and $1,400 per ounce of gold were used. Metal prices used for La
Bolsa were $14.00 per ounce of silver and $825 per ounce of gold. Metal prices for Navidad were $12.52 per ounce of silver and $1,100 per tonne of lead. Metal prices
used for Calcatreu were $12.50 per ounce of silver and $650 per ounce of gold.
(2) Mineral resource estimates were prepared under the supervision of, or were reviewed by, Christopher Emerson, FAusIMM, Vice President Business Development and
Geology and Martin G. Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, each of whom are Qualified Persons as that term is defined in
National Instrument 43-101 (âNI 43-101).
(3) This information represents the portion of mineral resources attributable to Pan American based on its ownership interest in the operating entity as indicated.
(4) Totals may not add up due to rounding.
36. Views on the silver market (1)
⢠Global silver production declined in 2016 for the first time since 2002
⢠Industrial demand represents just under half of the total demand for silver
⢠Growing demand through the use of technology, electronics and renewable sources of power
⢠Demand for photovoltaic applications rose 34% in 2016 vs 2015 due to increase in global solar
panel installations. Photovoltaics industry now represents 14% of silverâs industrial demand, up
from only 1% a decade ago.
⢠Real interest rates in the U.S. likely to remain low in 2017, despite expected monetary tightening
⢠US GDP growth constrained by high government debt, limiting governmentâs scope for new round of
fiscal stimulus
⢠Inflationary pressures are starting to build
36 June 6, 2017
(1) Sources include: Bloomberg Metals Focus December, 2016 and GFMS, Thomson Reuters / The Silver Institute 2017
Factors support continued demand for silver for both industrial applications and
as a safe-haven asset.