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Pan American Silver Corp announced 2023 guidance for production, costs & expenditures in 2023.

May 3, 2023

Pan American Silver Corp announced its 2023 guidance for production, costs & expenditures in 2023. 

The guidance reflects the contribution from the Acquired Operations of Yamana Gold for the nine-month period from March 31 to December 31, 2023. Pan American completed its previously announced transaction with Yamana Gold Inc. on March 31, 2023, resulting in the addition of four producing mines plus several exploration and development projects in Chile, Brazil and Argentina.

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 Silver announced it will spend $12 to $13 million in project capital in 2023 to 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 increase resource recovery and throughput.

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 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.

In addition to expenditures at Bell Creek, Timmins, in 2023 Pan American plans to invest an estimated $75 to $85 million of project capital in the following projects in Central and South America.

- 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. 

Pan American expects 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.

Pan American is a leading producer of precious metals in the Americas, operating silver and gold mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile and Brazil. Pan American also owns the Escobal mine in Guatemala that is currently not operating. Pan American Silver been operating in the Americas for three decades, earning an industry-leading reputation for sustainability performance, operational excellence and sound financial management. 

For more information about Pan American
Siren Fisekci
VP, Investor Relations & Corporate Communications Ph: 604-806-3191
Email: ir@panamericansilver.com 


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