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Pan American Silver sells Peru asset for $300M USD

May 1, 2024

Pan American Silver Corp. has agreed to sell its 100% interest in La Arena S.A., which owns the La Arena gold mine as well as the La Arena II project in Peru, to Jinteng (Singapore) Mining Pte. Ltd., a subsidiary of Zijin Mining Group Co., Ltd. (collectively, "Zijin") for US$245 million cash upfront and a US$50 million contingent payment.

"With the sale of La Arena, we continue to deliver on our strategy to optimize our portfolio, following the Yamana transaction, while maintaining future upside through the retention of royalties," said Michael Steinmann, President and Chief Executive Officer of Pan American. "Proceeds from the transaction will further strengthen our financial position and allow us to deliver on our capital allocation priorities of investing in high-quality assets, debt reduction and returning capital to our shareholders."

Under the terms of the agreement, at closing Zijin will pay US$245 million in cash and will grant Pan American a life-of-mine gold net smelter return royalty of 1.5% for the La Arena II project. Upon commencement of commercial production from the La Arena II project, the agreement provides for an additional contingent payment from Zijin of US$50 million in cash. The closing of the transaction is subject to customary conditions and receipt of regulatory approvals. Pan American expects the transaction to be completed in the third quarter of 2024.

The La Arena property is located in the La Libertad province of Peru and is comprised of the La Arena gold mine and the La Arena II project. Since acquiring the mine from Tahoe Resources Inc. in 2019, Pan American has successfully added 535,521 ounces of gold through exploration, and extended the mine life from 2021 to 2026, with the potential for further extension.

About Pan American Silver

Pan American Silver is a leading producer of silver and gold in the Americas, operating mines in Canada, Mexico, Peru, Brazil, Bolivia, Chile and Argentina. We also own the Escobal mine in Guatemala that is currently not operating, and we hold interests in exploration and development projects. We have been operating in the Americas for three decades, earning an industry-leading reputation for sustainability performance, operational excellence and prudent financial management. We are headquartered in Vancouver, B.C. and our shares trade on the New York Stock Exchange and the Toronto Stock Exchange under the symbol "PAAS".


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