Scotiabank Mining Conference. December 3, 2014

Transcription

1 Scotiabank Mining Conference December 3, 2014

2 Cautionary Notes NON-GAAP MEASURE CASH COSTS PER OUNCE, NET OF BY-PRODUCT CREDITS THIS PRESENTATION PRESENTS INFORMATION ABOUT OUR CASH COSTS OF PRODUCTION OF AN OUNCE OF SILVER FOR OUR OPERATING MINES. CASH COSTS PER OUNCE OF SILVER PRODUCED, NET OF BY-PRODUCT CREDITS IS CALCULATED AS FOLLOWS: EXCEPT AS OTHERWISE NOTED, CASH COSTS PER OUNCE PRODUCED IS CALCULATED BY DIVIDING TOTAL CASH COSTS, NET OF BY-PRODUCT CREDITS BY TOTAL SILVER OUNCES PRODUCED AT THE RELEVANT MINE OR MINES. TOTAL CASH COSTS INCLUDE MINE OPERATING COSTS SUCH AS MINING, PROCESSING, ADMINISTRATION, ROYALTIES AND OPERATING TAXES, BUT EXCLUDE AMORTIZATION, RECLAMATION COSTS, FINANCING COSTS AND CAPITAL DEVELOPMENT AND EXPLORATION. CERTAIN AMOUNTS OF STOCK-BASED COMPENSATION ARE EXCLUDED AS WELL. CASH COST PER OUNCE OF SILVER PRODUCED, NET OF BY-PRODUCT CREDITS IS INCLUDED IN THIS PRESENTATION BECAUSE CERTAIN INVESTORS USE THIS INFORMATION TO ASSESS OUR PERFORMANCE AND ALSO TO DETERMINE OUR ABILITY TO GENERATE CASH FLOW FOR USE IN INVESTING AND OTHER ACTIVITIES. THE INCLUSION OF CASH COSTS PER OUNCE PRODUCED MAY ENABLE INVESTORS TO BETTER UNDERSTAND YEAR-OVER-YEAR CHANGES IN OUR PRODUCTION COSTS, WHICH IN TURN AFFECT PROFITABILITY AND CASH FLOW. CASH COSTS PER OUNCE, NET OF BY-PRODUCT CREDITS DOES NOT HAVE A STANDARDIZED MEANING OR A CONSISTENT BASIS OF CALCULATION PRESCRIBED BY CANADIAN ACCOUNTING STANDARDS. INVESTORS ARE CAUTIONED THAT CASH COSTS PER OUNCE PRODUCED, NET OF BY-PRODUCT CREDITS SHOULD NOT BE CONSIDERED IN ISOLATION OR CONSTRUED AS A SUBSTITUTE TO COSTS DETERMINED IN ACCORDANCE WITH CANADIAN ACCOUNTING STANDARDS AS PRESCRIBED UNDER IFRS AS AN INDICATOR OF PERFORMANCE. OUR METHOD OF CALCULATING CASH COSTS PER OUNCE PRODUCED, NET OF BY-PRODUCT CREDITS MAY DIFFER FROM THE METHODS USED BY OTHER ENTITIES AND, ACCORDINGLY, OUR CASH COSTS PER OUNCE PRODUCED MAY NOT BE COMPARABLE TO SIMILARLY TITLED MEASURED USED BY OTHER ENTITIES. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS CERTAIN OF THE STATEMENTS AND INFORMATION IN THIS PRESENTATION CONSTITUTE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FORWARD-LOOKING INFORMATION WITHIN THE MEANING OF APPLICABLE CANADIAN PROVINCIAL SECURITIES LAWS. ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACT, ARE FORWARD-LOOKING STATEMENTS OR INFORMATION. FORWARD-LOOKING STATEMENTS OR INFORMATION IN THIS PRESENTATION RELATE TO, AMONG OTHER THINGS: OUR ESTIMATED PRODUCTION OF SILVER, GOLD AND OTHER METALS IN 2014; OUR FORECAST CASH COSTS PER OUNCE OF SILVER IN 2014; OUR ESTIMATED AISCSOS FOR 2014; OUR ANTICIPATED CAPITAL INVESTMENTS FOR 2014; THE ABILITY OF THE COMPANY TO SUCCESSFULLY COMPLETE ANY CAPITAL INVESTMENT PROGRAMS AND PROJECTS AND THE IMPACTS OF ANY SUCH PROGRAMS AND PROJECTS ON THE COMPANY; STATEMENTS AS TO ANY FUTURE DIVIDENDS; AND ANY ANTICIPATED LEVEL OF FINANCIAL AND OPERATIONAL SUCCESS IN THESE STATEMENTS REFLECT THE COMPANY S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE NECESSARILY BASED UPON A NUMBER OF ASSUMPTIONS THAT, WHILE CONSIDERED REASONABLE BY THE COMPANY, ARE INHERENTLY SUBJECT TO SIGNIFICANT OPERATIONAL, BUSINESS, ECONOMIC AND REGULATORY UNCERTAINTIES AND CONTINGENCIES. THESE ASSUMPTIONS INCLUDE: TONNAGE OF ORE TO BE MINED AND PROCESSED; ORE GRADES AND RECOVERIES; PRICES FOR SILVER, GOLD AND BASE METALS; CAPITAL, DECOMMISSIONING AND RECLAMATION ESTIMATES; OUR MINERAL RESERVE AND RESOURCE ESTIMATES AND THE ASSUMPTIONS UPON WHICH THEY ARE BASED; PRICES FOR ENERGY INPUTS, LABOUR, MATERIALS, SUPPLIES AND SERVICES (INCLUDING TRANSPORTATION); NO LABOUR-RELATED DISRUPTIONS AT ANY OF OUR OPERATIONS: NO UNPLANNED DELAYS IN OR INTERRUPTIONS IN SCHEDULED PRODUCTION; ALL NECESSARY PERMITS, LICENCES AND REGULATORY APPROVALS FOR OUR OPERATIONS ARE RECEIVED IN A TIMELY MANNER; AND OUR ABILITY TO COMPLY WITH ENVIRONMENTAL, HEALTH AND SAFETY LAWS. THE FOREGOING LIST OF ASSUMPTIONS IS NOT EXHAUSTIVE. THE COMPANY CAUTIONS THE READER THAT FORWARD-LOOKING STATEMENTS AND INFORMATION INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS AND DEVELOPMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS OR INFORMATION CONTAINED IN THIS PRESENTATION AND THE COMPANY HAS MADE ASSUMPTIONS AND ESTIMATES BASED ON OR RELATED TO MANY OF THESE FACTORS. SUCH FACTORS INCLUDE, WITHOUT LIMITATION: FLUCTUATIONS IN SILVER, GOLD AND BASE METALS PRICES; FLUCTUATIONS IN PRICES FOR ENERGY INPUTS, LABOUR, MATERIALS, SUPPLIES AND SERVICES (INCLUDING TRANSPORTATION); FLUCTUATIONS IN CURRENCY MARKETS (SUCH AS THE CANADIAN DOLLAR, PERUVIAN SOL, MEXICAN PESO AND BOLIVIAN BOLIVIANO VERSUS THE U.S. DOLLAR); OPERATIONAL RISKS AND HAZARDS INHERENT WITH THE BUSINESS OF MINING (INCLUDING ENVIRONMENTAL ACCIDENTS AND HAZARDS, INDUSTRIAL ACCIDENTS, EQUIPMENT BREAKDOWN, UNUSUAL OR UNEXPECTED GEOLOGICAL OR STRUCTURAL FORMATIONS, CAVE-INS, FLOODING AND SEVERE WEATHER); RISKS RELATING TO THE CREDIT WORTHINESS OR FINANCIAL CONDITION OF SUPPLIERS, REFINERS AND OTHER PARTIES WITH WHOM THE COMPANY DOES BUSINESS; INADEQUATE INSURANCE, OR INABILITY TO OBTAIN INSURANCE, TO COVER THESE RISKS AND HAZARDS; EMPLOYEE RELATIONS; RELATIONSHIPS WITH, AND CLAIMS BY, LOCAL COMMUNITIES AND INDIGENOUS POPULATIONS; OUR ABILITY TO OBTAIN ALL NECESSARY PERMITS, LICENSES AND REGULATORY APPROVALS IN A TIMELY MANNER; CHANGES IN LAWS, REGULATIONS AND GOVERNMENT PRACTICES IN THE JURISDICTIONS WHERE WE OPERATE, INCLUDING ENVIRONMENTAL, EXPORT AND IMPORT LAWS AND REGULATIONS; DIMINISHING QUANTITIES OR GRADES OF MINERAL RESERVES AS PROPERTIES ARE MINED; INCREASED COMPETITION IN THE MINING INDUSTRY FOR EQUIPMENT AND QUALIFIED PERSONNEL; AND THOSE FACTORS IDENTIFIED UNDER THE CAPTION RISKS RELATED TO PAN AMERICAN S BUSINESS IN THE COMPANY S MOST RECENT FORM 40-F AND ANNUAL INFORMATION FORM FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION AND CANADIAN PROVINCIAL SECURITIES REGULATORY AUTHORITIES. ALTHOUGH THE COMPANY HAS ATTEMPTED TO IDENTIFY IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY, THERE MAY BE OTHER FACTORS THAT CAUSE RESULTS NOT TO BE AS ANTICIPATED, ESTIMATED, DESCRIBED OR INTENDED. INVESTORS ARE CAUTIONED AGAINST UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS AND INFORMATION. FORWARD-LOOKING STATEMENTS AND INFORMATION ARE DESIGNED TO HELP READERS UNDERSTAND MANAGEMENT S CURRENT VIEWS OF OUR NEAR AND LONGER TERM PROSPECTS AND MAY NOT BE APPROPRIATE FOR OTHER PURPOSES. THE COMPANY DOES NOT INTEND, NOR DOES IT ASSUME ANY OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS AND INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION, CHANGES IN ASSUMPTIONS, FUTURE EVENTS OR OTHERWISE, EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE LAW.

3 Cautionary Note to US Investors 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 ESTIMATES INCLUDED IN THIS PRESENTATION HAVE BEEN BASED UPON MINERAL RESOURCE ESTIMATES PREPARED IN ACCORDANCE WITH CANADIAN NATIONAL INSTRUMENT STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS ( NI ) AND THE CANADIAN INSTITUTE OF MINING, METALLURGY AND PETROLEUM CLASSIFICATION SYSTEM. NI IS A RULE DEVELOPED BY THE CANADIAN SECURITIES ADMINISTRATORS THAT ESTABLISHES STANDARDS FOR ALL PUBLIC DISCLOSURE AN ISSUER MAKES OF SCIENTIFIC AND TECHNICALINFORMATIONCONCERNING MINERALPROJECTS. CANADIAN STANDARDS, INCLUDING NI , DIFFER SIGNIFICANTLY FROM THE REQUIREMENTS OF THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE SEC ), AND INFORMATION CONCERNING MINERALIZATION, DEPOSITS, AND MINERAL RESOURCE INFORMATION CONTAINED OR REFERREDTO HEREIN MAY NOT BE COMPARABLE TO SIMILAR INFORMATION DISCLOSED BY U.S. COMPANIES. IN PARTICULAR, AND WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ESTIMATES INCLUDEDIN THISPRESENTATIONHAVEBEENBASEDUPON INDICATEDRESOURCES AND INFERREDRESOURCES. U.S. INVESTORSAREADVISEDTHAT, WHILESUCHTERMSARERECOGNIZEDANDREQUIREDBYCANADIAN SECURITIESLAWS, THESECDOES NOTRECOGNIZE THEM. UNDER U.S. STANDARDS, MINERALIZATION MAY NOT BE CLASSIFIED AS A RESERVE UNLESS THE DETERMINATION HAS BEEN MADE THAT THE MINERALIZATION COULD BE ECONOMICALLY AND LEGALLY PRODUCED OR EXTRACTED AT THE TIME THE RESERVEDETERMINATIONIS MADE. U.S. INVESTORSARECAUTIONEDNOTTOASSUMETHATANYPARTOFAN INDICATEDRESOURCE WILLEVERBECONVERTEDINTOA RESERVE. U.S. INVESTORS SHOULDALSOUNDERSTANDTHAT INFERREDRESOURCES HAVE A GREAT AMOUNT OF UNCERTAINTY AS TO THEIR EXISTENCE AND GREAT UNCERTAINTY AS TO THEIR ECONOMIC AND LEGAL FEASIBILITY. IT CANNOT BE ASSUMED THAT ALL ORANYPARTOF INFERREDRESOURCES EXIST,AREECONOMICALLYOR LEGALLYMINEABLEOR WILLEVERBEUPGRADEDTO AHIGHERCATEGORY. UNDERCANADIAN SECURITIESLAWS, ESTIMATED INFERREDRESOURCES MAY NOTFORMTHEBASIS OFFEASIBILITYORPRE FEASIBILITYSTUDIES EXCEPTIN RARECASES. DISCLOSURE OF CONTAINED OUNCES IN A MINERAL RESOURCE IS PERMITTED DISCLOSURE UNDER CANADIAN SECURITIES LAWS. HOWEVER, THE SEC NORMALLY ONLY PERMITS ISSUERS TO REPORT MINERALIZATION THAT DOES NOT CONSTITUTE RESERVES BY SEC STANDARDS AS IN PLACE TONNAGE AND GRADE, WITHOUT REFERENCE TOUNIT MEASURES. ACCORDINGLY, INFORMATION CONCERNING MINERAL DEPOSITS SET FORTH HEREIN MAY NOT BE COMPARABLE WITH INFORMATION MADE PUBLIC BY COMPANIES THATREPORTINACCORDANCE WITHU.S. STANDARDS.

4 Strategically Diversified in Latin America

5 2014 Consolidated Results* Operational Highlights Q Q YTD 2014 YTD 2013 Silver produced (Moz) Gold Produced (Koz) Consolidated Cash Cost (1) $12.29 $10.40 $10.83 $11.25 AISCSOS (2) $18.03 $17.51 $16.57 $18.62 (1) 2014 AISCSOS negatively affected by non cash adjustments to Net Realizable Value ( NRV ) of inventories, of $2.48 per Ag oz in Q3 and $1.46 YTD * At September 30, 2014 (1) Cash Cost per Payable Silver Ounce Produced, net of by product credits. Please refer to cautionary notes regarding non GAAP measures on Slide 2. (2) AICSOS = All in Sustaining Cost per Silver Ounce Sold, net of by product credits. Please refer to cautionary notes regarding non GAAP measures on Slide 2. 5

6 2014 Production by Mine* Mine Silver (Moz) Q YTD 2014 Gold (Koz) Cash Costs (1) Silver (Moz) Gold (Koz) * At September 30, 2014 (1) Cash costs per silver ounce produced, net of by product credits. Please refer to cautionary notes regarding non GAAP measures on Slide 2. (2) Totals may not add up due to rounding. Cash Costs (1) La Colorada $ $8.33 Alamo Dorado $ $12.50 Dolores $ $12.92 Huaron $ $8.45 Morococha (92.3%) $ $12.10 San Vicente (95%) 0.75 $ $13.71 Manantial Espejo $ $8.88 TOTAL (2) $ $10.83

7 2014 Capital Investments* Capital Expenditures ($ millions) Q YTD 2014 Primary Area of Spending La Colorada Tailings dam expansion & exploration Alamo Dorado Dolores Open pit pre stripping Huaron Exploration & mine infrastructure Morococha (92.3%) Exploration & mine development San Vicente (95%) Mine infrastructure Manantial Espejo Open pit pre stripping and tailings dam expansion Sustaining Capital Sub total (1) $25.8 $75.0 La Colorada Expansion Project Underground development, mine & mill equipment and Infrastructure upgrades Dolores Projects Phase 2 of Pad 3 construction + power line Projects Capital Sub total (1) $3.0 $29.1 TOTAL Capital Investments (1) $28.8 $ * At September 30, 2014 (1) Totals may not add up due to rounding

8 2014 Financial Highlights* (Million US$ except per share numbers) Q Q YTD 2014 YTD 2013 Revenue $178.3 $213.6 $588.8 $632.1 Mine operating (loss)/earnings ($12.4) $33.9 $29.4 $112.6 Net (loss)/earnings ($20.2) $14.2 ($19.1) ($152.8) Net (loss)/earnings per share ($0.13) ($0.09) ($0.12) ($1.00) Adjusted (loss)/earnings ($14.3) $12.2 $0.4 $32.1 Adjusted (loss)/earnings per share ($0.09) $0.08 $0.00 $0.21 Operating cash flows $38.3 $40.7 $123.4 $73.5 Operating cash flow per share $0.25 $0.27 $0.81 $ Realized prices: Q Ag $18.82/oz, Au $1,284/oz, Zn $2,299/t, Pb $2,207/t & Cu $6, YTD 2014 Ag $19.47/oz, Au $1,286/oz, Zn $2,139/t, Pb $2,126/t, & Cu $6,918/t

9 Q Results Key Factors Quarterly earnings were negatively affected by: $15.4 million negative non cash adjustment to NRV of inventories, especially at Dolores and Manantial Espejo $9.8 million negative price and quantity adjustments on concentrate sales from prior periods $6.7 million foreign exchange loss mainly on CDN dollar cash balances 9

10 AISCSOS ($'000) Q Q Var YTD 2014 YTD 2013 Var Direct Operating Costs Net Realizable Value Adjustments 2.47 (1.25) Production Costs Royalties (0.17) Smelting, refining and other direct selling charges (0.06) (0.02) Less by-product credits (13.95) (12.91) (1.05) (14.53) (12.92) (1.60) Cash Cost of Sales Net of By-products Sustaining capital (1) (0.13) (0.74) Exploration (0.29) Reclamation cost accretion General & Administrative expense All in sustaining costs (0.84) Payable Silver Ounces Sold 6,230 6,921-10% 19,078 19,042 0% All-In Sustaining Costs per Silver Ounce Sold $ $ $ 4.25 $ $ $ (0.84) All-In Sustaining Costs per Silver Ounce Sold (Excludes NRV Adj.) $ $ $ 0.52 $ $ $ (2.05) Q3 AISCSOS negatively impacted by: Net realizable value ( NRV ) adjustments to inventory ($15.4m) Lower payable silver ounces sold on settlement adjustments YTD AISCSOS reflects: Higher by product credits, partially offset by NRV adjustments Lower sustaining capital and exploration Confirming full year AISCSOS guidance of $17 to $18 per ounce* * Full year guidance does not take into account possible NRV adjustments that may occur during the 4 th quarter of 2014

11 Cash flows YTD 2014 * * At September 30, 2014

12 Q Financial Strength Financial Position (at September 30, 2014) Million US$ Cash and short term investments $377.5 Net working capital $606.9 Total debt $57.3 In Q3 2014, distributed $18.9 million in cash dividends to shareholders Year to date 2014, distributed $56.8 million in cash dividends to shareholders 12

13 Returning Value While Maintaining Strong Balance Sheet

14 Organic Growth La Colorada Expansion Awarded and commenced basic engineering for sulphide plant expansion Initiated geotechnical drilling to determine new shaft s location Evaluated acquisition of a new hoist Underground development to shaft bottom and drifting to level 365 progressed as planned Advanced construction of new community infrastructure During the first 5 weeks of the 4th quarter, we have issued $30.5 million contracts and purchase orders, predominantly related to the equipment and construction of the new sulphide plant, as well as for the purchase of the new hoist for the new shaft On a total project basis, at September 30, 2014 we have committed $44 million and in the upcoming few weeks we plan to commit an additional $20 million for the development of the new shaft 14

15 Organic Growth La Colorada Expansion Candelaria Recompensa 2013 EOY P&P 2.8Mt Ag 404g/t (36M oz) Au 0.39 g/t Pb 2.01 % Zn 3.69 % Estrella 2013 EOY P&P 0.1Mt Ag 274g/t (1.1M oz) Au 0.38 g/t Pb 0.90 % Zn 1.05 % Proven Reserves Probable Reserves Resources 2013 EOY P&P 2.7Mt Ag 379 g/t (33M oz) Au 0.35 g/t Pb 0.63 % Zn 1.11 % 15

16 Organic Growth La Colorada Expansion 16 Incremental expansion capital to be spent estimated at $80.0 million Total investment estimated at $163.8 million Largest portion of incremental expansion capital (excluding indirect costs) to be spent on: Sulphide plant expansion $46.0 million Additional mining equipment $8.2 million Other infrastructure upgrades, including tailings $21.0 million Ten Year Period ( ) Ag $19/oz Ag $25/oz Net revenue $1.4 B $1.8 B Net cash flow (after tax) undiscounted $372 M $614 M Net cash flow (after tax) 10% discount $196 M $354 M Expansion Project Net Cash Flow 10% $38.6 M $71.7 M Expansion Project IRR 22% 32% Payback Period 2.5 years 2 years

17 Exploration Success Proven and Probable Reserve History (Moz) Million Ounces Added by Exploration Depleted by Mining Aquired / Divested Carried from Previous Year Year Since M ounces of silver P&P Reserves have been added by exploration, in the same period M ounces have been mined (replacement of 117%) Cost of $0.38 US per ounce of silver delineated by exploration 17 Note: Please refer to the complete table of the Company s mineral reserves and resources in Appendix III and IV hereof.

18 2014 Annual Forecasts 2014 Production Forecast Confirming consolidated Ag production forecast of to Moz Confirming consolidated Au production forecast of to koz Increasing consolidated Zn production forecast to approximately 44 ktonnes Increasing consolidated Pb production forecast to approximately 15 ktonnes Increasing consolidated Cu production forecast to approximately 8 ktonnes 2014 Cash Costs Forecast Cash Costs likely to be at the low end of range of $11.70/oz Ag to $12.70/oz Ag 2014 Capital Expenditures Forecast Confirming sustaining capital expenditure forecast of $95.5M Reducing project capital expenditure forecast to approximately $50M 18 (1) Cash costs net of by product credits. Metal price assumptions used to forecast 2014 cash costs: Au $1,200/oz, Cu $7,000/tonne, Pb $2,100/tonne, Zn $1,850/tonne

19 PAA What we offer Strong balance sheet funding growth capital needs, while returning industry leading dividends from solid operating performance Leading long life reserves (323.5 Moz of Ag and 2,491.3 Koz of Au) Leading resource base of 715 Moz Ag in M+I and 298 Moz Ag Inferred Industry lowest quartile All in Sustaining Costs per ounce of Ag Exceptional exploration potential (La Colorada, Dolores, San Vicente, Huaron and Morococha) building on historical successes Solid, cohesive industry leading management team 19

20 PAAS Capital Structure (Dec 1, 2014) 20 Share Capital: Market Capitalization US$1.5 billion Issued and outstanding shares 151,500,294 Fully diluted shares 151,503,418 Trading Statistics: NASDAQ: TSX: Dividend Yield: 5.04% (1) Average Volume (3 months) 2,095,010 shares 52 week high $ week low $8.75 Average Volume (3 months) 231,332 shares 52 week high $ week low $9.97 (1) On an annualized basis based on the Company s closing share price on NASDAQ on November 30, 2014 and assuming the Company s Board of Directors continues to approve future quarterly dividends in the same amount, which would represent annual cash dividends paid by Pan American of $0.50 per common share.

21 Appendix I 2014 AISCSOS Forecast (in thousands of USD) All amounts in 000s except per share amounts Guidance 2014 Actual Low High 2013 Cash cost of sales net of by-products $ 298,000 $ 306,500 $ 319,189 Sustaining capital 95,500 95, ,646 Exploration & project development 15,750 15,750 15,475 Reclamation cost accretion 3,000 3,000 3,030 General & administrative expense 19,600 19,600 17,596 All-in sustaining costs A $ 431,850 $ 440,350 $ 466,937 Payable ounces sold B 25,400,000 24,460,000 25,478,014 All-in sustaining cost per silver ounce sold, net of by-products (A*$1000) /B $ $ $ Consolidated AISCSOS in 2014 should benefit from : more payable silver sold lower sustaining capital reduced smelting, refining charges and royalties by product credits stability (higher volumes help offset lower prices) 21 Note: Please refer to the cautionary note regarding non GAAP measures on Slide 2.

22 Appendix II Proven & Probable Mineral Reserves at December 31, 2013 (1) Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag (Moz) Au (g/t) Contained Au (000 s oz) Huaron Peru Proven N/A N/A Probable N/A N/A Morococha (92.3%) Peru Proven N/A N/A Probable N/A N/A La Colorada Mexico Proven Probable Dolores Mexico Proven Probable Alamo Dorado Mexico Proven Probable La Bolsa Mexico Proven Probable Manantial Espejo Argentina Proven Probable San Vicente (95%) Bolivia Proven N/A N/A Probable N/A N/A TOTAL (2) , (1) Metal prices for all mines: Ag $22/oz, Au $1,300/oz, Zn $1,850/tonne, Pb $1,950/tonne, Cu $6,800/tonne. Metal prices for La Bolsa: Ag $14/oz and Au $825/oz. (2) Totals may not add up due to rounding

23 Appendix III Mineral Resources at December 31, Mineral Resources Measured and Indicated Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag (Moz) Au (g/t) Contained Au (000 s oz) Huaron Peru Measured N/A N/A Indicated N/A N/A Morococha (92.3%) Peru Measured N/A N/A Indicated N/A N/A La Colorada Mexico Measured Indicated Dolores Mexico Measured Indicated Alamo Dorado Mexico Measured Indicated La Bolsa Mexico Measured Indicated Manantial Espejo Argentina Measured Indicated San Vicente (95%) Bolivia Measured N/A N/A Indicated N/A N/A Navidad Argentina Measured N/A N/A Indicated N/A N/A Pico Machay Peru Measured 4.7 N/A N/A Indicated 5.9 N/A N/A Calcatreu Argentina Indicated TOTALS (i) Measured + Indicated ,598.5 Mineral Resources Inferred Property Location Classification Tonnes (Mt) Ag (g/t) Contained Ag (Moz) Au (g/t) Contained Au (000 s oz) Huaron Peru Inferred N/A N/A Morococha (92.3%) Peru Inferred N/A N/A La Colorada Mexico Inferred Dolores Mexico Inferred Alamo Dorado Mexico Inferred La Bolsa Mexico Inferred Manantial Espejo Argentina Inferred San Vicente (95%) Bolivia Inferred N/A N/A Navidad Argentina Inferred N/A N/A Pico Machay Peru Inferred 23.9 N/A N/A Calcatreu Argentina Inferred TOTALS (i) Inferred ,318.7 The foregoing tables illustrate Pan American s share of mineral reserves and resources. Properties in which Pan American has less than 100% interest are noted next to the property name. Mineral reserves and resources are as defined by the Canadian Institute of Mining, Metallurgy and Petroleum. Please refer to the cautionary note for US investors on Slide 3. Mineral resources that are not mineral reserves have no demonstrated economic viability. Pan American does not expect these mineral reserve and resource estimates to be materially affected by metallurgical, environmental, permitting, legal, taxation, socio economic, political, and marketing or other relevant issues. See the Company s Annual Information Form dated March 28, 2014 for more information concerning associated QA/QC and data verification matters, the key assumptions, parameters and methods used by the Company to estimate mineral reserves and mineral resources, and for a detailed description of known legal, political, environmental, and other risks that could materially affect the Company s business and the potential development of the Company s mineral reserves and resources. Grades are shown as contained metal before mill recoveries are applied. Pan American reports mineral resources and mineral reserves separately. Reported mineral resources do not include amounts identified as mineral reserves. Metal prices used for reserves at all mines: Ag: $22.00/oz, Au: $1,300/oz, Pb: $1,950/Tonne,Cu: $6,800/Tonne,Zn: $1,850/Tonne Metal prices used for La Bolsa reserves were Ag: $14.00/oz and Au: $825/oz. Metal prices used for Calcatreu resources and reserves were Ag: $12.50/oz and Au: $650/oz. Metal prices used for resources vary according to mine and mining area Metal prices used for Navidad resources were Ag: $12.52/oz and Pb: $1,100/tonne Metal prices used for Dolores and Alamo Dorado resources were Ag: $35/oz and Au: $1,400/tonne (1) Totals may not add up due to rounding Mineral resource and reserve estimates for Huaron, Dolores, San Vicente, La Colorada, Manantial Espejo, Alamo Dorado, Morococha, Pico Machay and Calcatreu were prepared under the supervision of, or were reviewed by Michael Steinmann, P. Geo., Executive Vice President Corporate Development and Geology and Martin G. Wafforn, P. Eng., Vice President Technical Services, each of whom are Qualified Persons as that term is defined in National Instrument ( NI ). Navidad mineral resource estimates were prepared by Pamela De Mark, P. Geo., Director, Resources, formerly Sr. Consultant of Snowden Mining Industry Consultants, also a Qualified Person as that term is defined in NI