Investor Presentation

Transcription

1 Investor Presentation Scotiabank Hong Kong, Taipei, Singapore and Sydney Sept 12-16, 2016

2 Cautionary Note Non-GAAP Measures This presentation refers to various Non-GAAP measures, such as cash costs per payable ounce of silver, all-in sustaining cost per silver ounce sold and adjusted (loss) earnings. Readers should refer to the Alternative Performance (Non-GAAP) Measures section in Pan American Silver Corp. s (the Company ) Management s Discussion and Analysis for the period ended June 30, 2016 available at Reporting Currency and Financial Information Unless we have specified otherwise, all references to dollar amounts or $ are to United States dollars. Cautionary Note Regarding Forward Looking Statements and Information 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 2016, 2017 and 2018; our estimated cash costs per payable ounce of silver and AISCSOS in 2016, 2017 and 2018; our estimated profit margins for 2016, 2017 and 2018; our estimated capital investments, and sustaining capital for 2016; 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; the ability of the Company to realize value from transactions, including with respect to Maverix Metals Inc.; expectations with respect to future prices of silver and other precious metals, world-wide silver production, global demand on silver, or other similar metrics relating to silver; and any anticipated level of financial and operational success in These statements and information 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 remaining as estimated; currency exchange rates remaining as estimated; capital, decommissioning and reclamation estimates; our mineral reserve and recourse 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 or interruptions in scheduled production; all necessary permits, licenses 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 metal 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, Argentine 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 or 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 or information, whether as a result of new information, changes in assumptions, future events orotherwise, except to the extent required by applicable law. 2 Technical Information Technical information contained in this presentation with respect to Pan American has been reviewed or approved by Martin Wafforn, P.Eng., SVP Technical Services and Process Optimization, who is the Company s qualified person for the purposes of National Instrument Mineral reserves in this presentation were prepared under the supervision of, or were reviewed by, Martin Wafforn. For additional information about the Company s material mineral properties, please refer to the Company s Annual Information Form dated March 24, 2016, filed at

3 Cautionary Note About Mineral Reserves and Resources Cautionary Note to US 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 and resource estimates included in this presentation have been 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 technical information concerning mineral projects. Canadian standards, including NI , differ significantly from the requirements of the United States Securities and Exchange Commission (the SEC ), and information concerning mineralization, deposits, mineral reserve and resource information contained or referred to herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, this presentation uses the terms measured resources, indicated resources and inferred resources. U.S. investors are advised that, while such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. The requirements of NI for identification of reserves are not the same as those of the SEC, and reserves reported by Pan American in compliance with NI may not qualify as reserves under SEC standards. 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 reserve determination is made. U.S. investors are cautioned not to assume that any part of a measured resource or indicated resource will ever be converted into a reserve. U.S. investors should also understand that inferred resources 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 or any part of inferred resources exist, are economically or legally mineable or will ever be upgraded to a higher category. Under Canadian securities laws, estimated inferred resources may not form the basis of feasibility or pre-feasibility studies except in rare cases. 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 to unit measures. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made public by companies that report in accordance with U.S. standards. 3

4 Company overview Listings: NASDAQ (PAAS) and TSX (PAA) Market cap: US$3 B (1) Shares outstanding: approx M Average daily volume: 3.4 M (1) Paid dividends since Current yield 0.3% (2) Top 10 shareholders % shares O/S Connor Clark & Lunn 5.29 Van Eck Associates Corporation 4.72 Tocqueville Asset Management, L.P Renaissance Technologies, LLC 3.84 Fidelity Management & Research 2.89 Arrowstreet Capital, L.P Global X Management Company, LLC 1.63 The Vanguard Group, Inc Deutsche Bank Trust Company Americas 1.27 Investec Asset Management, LTD (U.K.) 1.23 Total reported institutional holdings ~55% Source: IPREO All data as of close Sept. 6, 2016 (1) Based on Nasdaq exchange (2) Based on dividend declared Aug. 11, 2016, annualized 4

5 PAS an investment in silver 2 nd largest primary silver producer in the world Portfolio of high-quality assets in the Americas Large reserves Proven + probable of 280 Moz silver Solid production profile Significant exploration potential Experienced management team Strong balance sheet Our strategy is focused on extracting value from our portfolio of assets, improving operating margins and deploying proven expertise to pursue profitable growth. 5

6 6 Our operations

7 Demonstrated production growth Million Silver Ounces Produced Ag Production Forecast 2016: Moz 2017: Moz 2018: Moz E 2017E 2018E (1) (1) (1) 7 (1) Please refer to the Company s news release dated January 19, 2016 for detailed discussion of these estimates.

8 Positioned for strong silver revenue 2015 Actual 2016 Estimate 9% 3% 8% 4% 9% 11% 51% 50% 29% 27% Copper Lead Zinc Gold Silver Based on actual production and realized prices in 2015 (Ag $15.53; Au $1,162; Zn $1,889; Cu $5,314; Pb $1,745 Copper Lead Zinc Gold Silver Based on the mid-point of production estimates for 2016 (Ag of 24.0 M M ounces, Au of 175, ,000 ounces, Zn of 46,000 tonnes - 48,000 tonnes, Pb of 15,000 tonnes - 15,500 tonnes, and Cu of 13,000 tonnes - 13,500 tonnes) and second half 2016 price deck (Ag $18.50; Au $1,300, Zn $2,000; Cu $4,700; Pb $1,750) 8

9 Profit margins set to widen 2016 Guidance Revised Aug 11, 2016 First half 2016 cash costs: $ (1) Cash costs per payable ounce of silver, net of by-product credits. Actual cash costs for the first half of 2016 based on actual prices. By-product metal prices assumptions used for forecast cash costs calculation: Au $1,100/oz, Zn $1,700/tonne, Pb $1,600/tonne, Cu $4,600/tonne. For revised 2016 guidance, assumptions for second half of 2016 are: Au $1,300/oz, Zn $2,000/tonne, Pb $1,750/tonne, Cu $4,700/tonne. Cash cost is a non-gaap measure. Cash costs does not have a standardized meaning prescribed by IFRS as an indicator of performance. The Company s method of calculating cash costs may differ from the methods used by other entities and, accordingly, the Company s cash costs may not be comparable to similarly titled measures used by other entities. Readers should refer to the Alternative Performance (Non-GAAP) Measures section of the Company s Management s Discussion & Analysis for the period ended June 30, 2016, available at for a more detailed description of this measure and its calculation. Exchange rates relative to US$ assumed: Mexican Peso 17:1, Peruvian Sol 3.3:1, Argentinean Peso 11:1, Bolivian Boliviano 7:1.

10 Achievements in the first half of 2016 Cash costs (1) down 35% from first half 2015 $6.81/ounce of silver (net of by-product credits) outlook for 2016 cash costs reduced 30% from initial 2016 estimate All-in sustaining costs per silver ounce sold (2) down 15% from first half 2015 $12.21 (net of by-product credits) outlook for 2016 all-in sustaining costs reduced 16% from initial 2016 estimate Cost reductions reflect increased productivity at Peruvian mines, by-product sales and positive market factors (weaker FX and lower energy costs) Generated operating cash flow before changes in non-cash operating working capital of $81.9 M and adjusted earnings of $23.4 M (3) at silver prices averaging $15.82/oz 10 This slide refers to measures that are not generally accepted accounting principle ( non-gaap ) financial measures. These measures do not have a standardized meaning prescribed by IFRS as an indicator of performance, and may differ from methods used by other companies. Refer to Alternative Performance (non-gaap) Measures section of the Company s Management s Discussion & Analysis for the period ended June 30, These non-gaap financial measures include: (1) Cash cost per payable ounce of silver, net of by-product credits ( cash costs ) (2) All-In Sustaining Costs per Silver Ounce Sold ( AISCSOS ) (3) Adjusted earnings (losses)

11 Financial strength At June 30, 2016 US$ Million Cash and cash equivalents and short-term investments Working capital (1) Total debt (2) 58.8 Total available liquidity (3) (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. Refer to the Company s management s discussion and analysis for the period ended June 30, (2) Inclusive of $5.7 million in capital leases. (3) Includes cash and cash equivalents, short-term investments, and the undrawn portion of the Company s secured line of credit.

12 Producing mines: Dolores Chihuahua, Mexico Highlights Mine type Open pit Ownership 100% Products Capacity Deposit type Silver and gold dore 16,200 tonnes per day Epithermal veins, stockworks, breccias and replacements Forecast Silver (million ounces) Gold (thousand ounces) Cash costs (1) $9.28 $ $1.50 All-in Sustaining Costs per Silver Ounce Sold ( AISCSOS ) (1) $12.67 $ $14.50 (1) Cash costs per ounce and AISCSOS are non-gaap measures. Refer to section Alternative Performance (non-gaap) Measures in Company s Management s Discussion & Analysis for period ended June 30, 2016, available at for detailed reconciliation of how these measures are calculated estimates based on $2,000/tonne Zn, $1,750/tonne Pb, $4,700/tonne Cu, and $1,300/oz Au. 12 Reserve Tonnes (Mt) Grams Category (1) Ag/Tonne Contained Ag (Moz) Grams Au/Tonne Contained Au (koz) Proven Probable (1) Estimated using a price of $17.00 per ounce of silver and $1,180 per ounce of gold.

13 Dolores expansion (1) Highlights Estimated capital investment ~$112 M IRR 27% at Ag $19/oz & Au $1,200/oz 40% increase expected in average annual Ag production to 6.3 Moz by % increase expected in average annual Au production to koz by 2018 Reduce cash costs through operational efficiencies and higher gold production Project Scope New 5,600 tpd pulp agglomeration plant New 1,500 tpd underground mine On budget and on schedule New 115 kv power line energized in September 2016 Pulp agglomeration plant start-up estimated for mid 2017 Underground mine production reaches 1,500 tpd by end of (1) For additional information, please refer to the Company s technical report entitled Technical Report for the Dolores Property, Chihuahua, Mexico - Preliminary Economic Assessment of a Pulp Agglomeration Treatment and Underground Option, with an effective date of May 31, 2014 available at 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.

14 Producing mines: La Colorada Highlights Mine type Underground Ownership 100% Products Silver and gold dore, silver-rich lead and zinc concentrates Zacatecas, Mexico Capacity Deposit type 1,250 tonnes per day (expected to increase to 1,800 tpd by end of 2017) Epithermal veins, breccia pipes, mantos and replacements Forecast Silver (million ounces) Gold (thousand ounces) Cash costs (1) $7.41 $ $7.50 All-in Sustaining Costs per Silver Ounce Sold ( AISCSOS ) (1) $9.57 $ $9.50 (1) Cash costs per ounce and AISCSOS are non-gaap measures. Refer to section Alternative Performance (non-gaap) Measures in Company s Management s Discussion & Analysis for period ended June 30, 2016, available at for detailed reconciliation of how these measures are calculated estimates based on $4,700/tonne Cu and $1,300/oz Au. Reserve Tonnes (Mt) Grams Category (1) Ag/Tonne Contained Ag (Moz) Grams Au/Tonne Contained Au (koz) Proven Probable (1) Estimated using a price of $17.00 per ounce of silver and $1,180 per ounce gold.

15 La Colorada expansion (1) Estimated total investment of $163.8 M, including sustaining capital IRR 22% at Ag $19/oz Highlights 69% increase expected in average annual silver production to 7.7 Moz by % and 185% increase expected in zinc and lead, respectively, by 2018 Project Scope New 600-metre deep mine shaft Underground development to open new production areas Construction of sulphide processing plant New 115kV power line On budget and on schedule Sulphide processing plant began processing ore in July 2016 New mine shaft began hoisting ore in September (1) For additional information, please refer to the Company s technical report entitled Technical Report Preliminary Economic Analysis for the Expansion of the La Colorada Mine, Zacatecas, Mexico, with an effective date of December 31, 2013 available at 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.

16 Producing mines: Huaron Pasco, Peru Highlights Mine type Underground Ownership 100% Products Silver-rich zinc, lead, and copper concentrates Capacity 2,300 tonnes per day Deposit type Epithermal veins, mantos, and replacements Forecast Silver (million ounces) Gold (thousand ounces) Cash costs (1) $10.91 $ $9.25 All-in Sustaining Costs per Silver Ounce Sold ( AISCSOS ) (1) $16.89 $ $13.00 (1) Cash costs per ounce and AISCSOS are non-gaap measures. Refer to section Alternative Performance (non-gaap) Measures in Company s Management s Discussion & Analysis for period ended June 30, 2016, available at for detailed reconciliation of how these measures are calculated estimates based on $2,000/tonne Zn, $1,750/tonne Pb, $4,700/tonne Cu, and $1,300/oz Au. Reserve Tonnes (Mt) Grams Category (1) Ag/Tonne Contained Ag (Moz) Grams Au/Tonne Contained Au (koz) Proven n/a n/a Probable n/a n/a 16 (1) Estimated using a price of $17.00 per ounce of silver.

17 Producing mines: Morococha Junin, Peru Highlights Mine type Underground Ownership 92.3%* Products Silver-rich zinc, lead and copper concentrate Capacity 2,000 tonnes per day Deposit type Epithermal veins, mantos, and replacements Forecast Silver (million ounces) Gold (thousand ounces) Cash costs (1) $13.03 $ $6.50 All-in Sustaining Costs per Silver Ounce Sold ( AISCSOS ) (1) $19.21 $ $9.50 (1) Cash costs per ounce and AISCSOS are non-gaap measures. Refer to section Alternative Performance (non-gaap) Measures in Company s Management s Discussion & Analysis for period ended June 30, 2016, available at for detailed reconciliation of how these measures are calculated estimates based on $2,000/tonne Zn, $1,750/tonne Pb, $4,700/tonne Cu, and $1,300/oz Au. Reserve Tonnes (Mt) Grams Category (1) Ag/Tonne Contained Ag (Moz) Grams Au/Tonne Contained Au (koz) Proven n/a n/a Probable n/a n/a 17 (1) Estimated using a price of $17.00 per ounce of silver. * Figures reflect Pan American s 92.3% interest in Morococha.

18 Producing mines: Alamo Dorado Sonora, Mexico Highlights Mine type Open Pit Ownership 100% Products Capacity Deposit type Silver and gold dore, copper-lead rich precipitate 4,000 tonnes per day Epithermal quartz vein stockworks Forecast Silver (million ounces) Gold (thousand ounces) Cash costs (1) $11.41 $ $15.00 All-in Sustaining Costs per Silver Ounce Sold ( AISCSOS ) (1) $12.72 $ $14.50 (1) Cash costs per ounce and AISCSOS are non-gaap measures. Refer to section Alternative Performance (non-gaap) Measures in Company s Management s Discussion & Analysis for period ended June 30, 2016, available at for detailed reconciliation of how these measures are calculated estimates based on $2,000/tonne Zn, $1,750/tonne Pb, $4,700/tonne Cu, and $1,300/oz Au. Reserve Tonnes (Mt) Grams Category (1)(2) Ag/Tonne Contained Ag (Moz) Grams Au/Tonne Contained Au (koz) Proven Probable n/a n/a n/a n/a n/a 18 (1) Estimated using a price of $15.00 per ounce of silver, $1,100 per ounce of gold. (2) All remaining mineral reserves are stockpiled material.

19 Producing mines: San Vicente Potosi, Bolivia Highlights Mine type Underground Ownership 95%* Products Silver-rich concentrates Capacity 950 tonnes per day Deposit type Epithermal veins Forecast Silver (million ounces) Gold (thousand ounces) n/a n/a Cash costs (1) $11.57 $ $12.50 All-in Sustaining Costs per Silver Ounce Sold ( AISCSOS ) (1) $11.91 $ $15.00 (1) Cash costs per ounce and AISCSOS are non-gaap measures. Refer to section Alternative Performance (non-gaap) Measures in Company s Management s Discussion & Analysis for period ended June 30, 2016, available at for detailed reconciliation of how these measures are calculated estimates based on $2,000/tonne Zn, $1,750/tonne Pb, $4,700/tonne Cu, and $1,300/oz Au. Reserve Tonnes (Mt) Grams Category (1) Ag/Tonne Contained Ag (Moz) Grams Au/Tonne Contained Au (koz) Proven n/a n/a Probable n/a n/a 19 (1) Estimated using a price of $17.00 per ounce of silver. * Figures reflect Pan American s 95% interest in San Vicente.

20 Producing mines: Manantial Espejo Santa Cruz, Argentina Highlights Mine type Open Pit / Underground Ownership 100% Products Silver and gold dore Capacity 2,000 tonnes per day Deposit type Epithermal veins, breccias and stockworks Forecast Silver (million ounces) Gold (thousand ounces) Cash costs (1) $7.33 $ $3.25 All-in Sustaining Costs per Silver Ounce Sold ( AISCSOS ) (1) $18.81 $ $5.00 (1) Cash costs per ounce and AISCSOS are non-gaap measures. Refer to section Alternative Performance (non-gaap) Measures in Company s Management s Discussion & Analysis for period ended June 30, 2016, available at for detailed reconciliation of how these measures are calculated estimates based on $2,000/tonne Zn, $1,750/tonne Pb, $4,700/tonne Cu, and $1,300/oz Au. Reserve Tonnes (Mt) Grams Category (1) Ag/Tonne Contained Ag (Moz) Grams Au/Tonne Contained Au (koz) Proven Probable (1) Estimated using prices of $14.50 per ounce of silver and $1,100 per ounce of gold for planned 2016 production, then using $17.00 per ounce of silver and $1,180 per ounce of gold.

21 Exploration and production growth Solid performance on replacing production with new reserves Proven and probable reserve replacement of 101% (added 293 M ounces of contained silver to mineral reserves) over last 12 years Reserve replacement cost of US$0.44/oz (1) La Colorada continues to deliver in both new reserves and extension to mine life High potential at Peru operations; near site and greenfield exploration Greenfield program to explore portfolio of greenfield and Joint Venture projects Kootenay Silver Inc. option brings an advanced silver exploration project into the pipeline with excellent regional exploration potential Exploration budget for 2016 increased 38% to US$14.5 M 100% owner of Navidad, largest undeveloped silver deposit in the world Measured and indicated resources of 632 M ounces and inferred resources of 119 M ounces of silver (1) Over

22 Strategic initiatives to surface value Maverix (1) Pan American realized value for assets hidden within its portfolio through sale to Maverix Metals Inc. (royalties, precious metals streams) Retained 54% majority ownership (63% fully-diluted) in Maverix Provides additional leverage to gold and silver prices Opportune timing for Maverix to attract new growth prospects Maverix up ~28% since acquisition of assets from Pan American closed (2) Milpo Shalipayco Joint Venture Pan American sold 75% of shares in Compania Minera Shalipayco SAC to Votorantim Metais Cajamarquilla SA for US$ 15 M cash and 1% Net Smelter Return (sold to Maverix) Pan American receives free carry of its remaining 25% interest to commercial production in this large zinc development project located in Peru (1) See press release dated July 11, 2016 (2) based on Maverix closing price on TSX-V on July 11, 2016 compared to closing price on Sept. 7,

23 Sustainability leadership Recognized as a leader in sustainability in the mining industry Policy Plan Engage Implement CSR Environmental Health and Safety Governance Toolkits Program development Stakeholder Engagement Grievance Mechanisms Programs and projects covering sustainability pillars Environmental & Social Audits Sustainability Reporting Internal Capacity Building Evaluate Performance Metrics Education & Health Sustainable Development Programs Local Procurement Development Infrastructure & Urban Footprint Water and Energy Stewardship Tailings Facility Safety Emergency Response Preparedness Mine Closure 31 Sustainability Report & Pillars

24 Sustainability awards & recognitions Corporate Corporate Knights ranked Pan American Silver 36th on their Future 40 Responsible Corporate Leaders in Canada. The Peruvian-Canadian Chamber of Commerce awarded Pan American Silver the Business of the Year 2015 award for our contributions to sustainable development through our UQLLU/Alpaca de los Andes weaving project. Mexico All mines were awarded with the Socially Responsible Company (ESR) Award presented by the Centro Mexicano para la Filantropía (CEMEFI). All mines maintained the Clean Industry independent environmental certification by the Mexican Environment Protection Agency (PROFEPA). 32

25 Why invest in PAAS 1. Well positioned for improving profit margins through expansions at La Colorada and Dolores 2. Driving down costs through operational efficiencies and increased productivity (mechanization at Peruvian mines) 3. Pipeline of organic growth opportunities 4. Exploration potential budget increased 38% in Q Prudent financial management creates value throughout the commodity price cycle 6. Trading at attractive valuation relative to peers and streaming companies 7. Support for silver prices through weak global economic fundamentals and increasing use in industrial applications 25

26 Silver company relative valuation 2016 Scotiabank figures P/NAV P/CF 2016 EV/EBITDA 2016 Silver Producers Average (1) x 10.9x Silver Wheaton Corp x 17.6x Pan American Silver x 8.5x Source: Scotiabank, Precious Minerals Weekly, dated Aug. 15, 2016 (1) Silver Producers Average comprised of: Coeur Mining, First Majestic Silver, Fortuna Silver Mines and Hecla Mining. 26

27 Benefits of investing in PAAS PAAS Bullion/ETF Streaming Co Exposure to Silver price Market Liquidity Valuation multiple Exposure to exploration success Exposure to strong management team Participation in organic growth projects Participation in M&A growth opportunities Control over operational risks - 27

28 Silver market In 2015: Total global supply declined from 1.06 B to 1.04 B ounces Mine production grew 2% to peak at 887 M ounces Supply from scrap and recycling declined by 13% Silver ETF s holdings declined 3% Total global demand was 1.17 B ounces with growth in key demand components (jewelry, bullion and photovoltaics) Physical market deficit was ~130 M ounces was third consecutive year that demand surpassed supply Mine supply expected to decline going forward due to cost-related cuts and reduced investment in exploration/development Source: GFMS 2016 Silver Survey released on May 5, 2016 Visit for the Silver Institute s publications, including the World Silver Survey

29 Silver prices Aug. 31, 2001 Aug. 31, 2016 $/oz Source: FactSet, London Silver (SLVR-FDS) 29

30 30 Appendix

31 2016 Forecast Consolidated Operational Highlights Period ended June 30, 2016 Forecast FY 2016 (As at Jan 19, 2016) Forecast (1) FY 2016 (As at Aug 11, 2016) Silver production (Moz) Gold production (koz) Cash costs (2) (net of by-product credits) $6.81 $ $10.45 $ $7.50 All-in Sustaining Costs per Silver Ounce Sold (3) (net of by-product credits) ( AISCSOS ) $12.21 $ $14.90 $ $12.60 Total capital expenditures forecast of $200 M to $215 M (including project capital investment of $135 M to $140 M) (1) Revised cash costs and AISCSOS forecasts assume by-product credit prices of $2,000/tonne ($0.91/lb) for zinc, $1,750/tonne ($0.79/lb.) for lead, $4,700/tonne ($2.13/lb.) for copper, and $1,300/oz. for gold. This slide refers to measures that are not generally accepted accounting principle ( non-gaap ) financial measures. These measures do not have a standardized meaning prescribed by IFRS as an indicator of performance, and may differ from methods used by other companies. Refer to Alternative Performance (non-gaap) Measures section of the Company s Management s Discussion & Analysis for the period ended June 30, These non-gaap financial measures include: (2) Cash cost per payable ounce of silver, net of by-product credits ( cash costs ) and (3) All-In Sustaining Costs per Silver Ounce Sold ( AISCSOS ) 31

32 Experienced leadership team Ross J. Beaty, Board Chair Founded Pan American Silver Corp (the Company ) in Geologist and resource company entrepreneur with more than 40 years of experience in the international minerals industry. Michael Steinmann, President and CEO Joined Company in 2004 and promoted to CEO in Over 20 years of experience in the base and precious metals industry and holds a Ph.D in natural science (geology) from the Swiss Federal Institute of Technology. Steve Busby, COO Mineral processing engineer with 33 years of experience in the precious metals mining business. Joined Company in 2003 and promoted to Chief Operating Officer in Rob Doyle, CFO CA and CFA with strong background in financial management, particularly in the metals market. Joined Company as Chief Financial Officer in Chris Emerson, VP Geology & Business Development Extensive experience managing geological departments in base metal mines, green and brownfield exploration projects, and joint ventures; has evaluated mines and projects through the Americas, Europe, and Asia. Joined Company in George Greer, Senior Vice President, Project Development Mining engineer with 32 years of industry experience. Joined Company in Andres Dasso, Senior Vice President, Mining Operations Mining engineer with decades of experience. Joined Company in Martin Wafforn, Senior Vice President, Technical Services & Process Optimization Mining engineer with 35 years of experience, primarily in underground mining. Joined Company in 2004 and acts as a Qualified Person for the company. For more information see: 32