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PanAmerican Silver provides operational updates

Apr 2, 2020

Pan American Silver Provides Operations Update in Response to COVID-19

VANCOUVER, April 1, 2020 /CNW/ - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) ("Pan American") announced today that Mexico's Ministry of Health has issued an Executive Order for the immediate suspension of non-essential activities until April 30, 2020 in response to the COVID-19 pandemic. Following an initiative of reducing the number of people on site to increase physical distancing, Pan American will now expand this program in order to bring its La Colorada and Dolores operations into compliance with the Executive Order. Pan American has also begun to voluntarily reduce throughput by approximately 10% to 20% at its Timmins operation in Canada in order to further enhance physical distancing throughout the operation, offices and personnel transport systems. 

Michael Steinmann, President and Chief Executive Officer of Pan American, said: "We are carefully monitoring new developments regarding the pandemic, implementing the preventative measures recommended by health authorities and adapting our operations to government or company-led directives. The efforts of our employees have been invaluable in helping us manage this very challenging but temporary period, and I am grateful for their dedication." 

As previously announced, Pan American has suspended normal operations at its mines in Peru, Argentina and Bolivia in order to comply with mandatory national quarantines. The governments in those countries have declared that the quarantine periods are extended to April 12, 2020 in Peru, April 13, 2020 in Argentina and April 15, 2020 in Bolivia. These quarantine periods may be extended further as the situation in each country develops.

There are currently no confirmed cases of COVID-19 at any of Pan American's operations.

Pan American is continuing to conduct care and maintenance at the suspended operations to sustain strict safety and environmental systems, and to ensure operational readiness when the government restrictions are lifted and Pan American determines that it is safe to resume operations. While Pan American's underground mines affected by the suspensions have ceased to produce metals during this period, limited production continues at the open pit mines from circulation of process solutions on the heap leach pad, which is necessary for care and maintenance of the operation.

Pan American is in a strong financial position to manage the current business environment. Cash and cash equivalents at December 31, 2019 totaled $120.6 million. In addition, Pan American has a credit facility in the amount of $500.0 million that matures on February 1, 2023. At December 31, 2019, $275.0 millionwas drawn on the credit facility, of which $15.0 million was repaid in early 2020. In order to provide additional flexibility and liquidity, Pan American has deferred certain capital expenditures and exploration spending. As well, Pan American's senior management team has voluntarily agreed to a salary reduction until the situation normalizes, including a 20% reduction for the executive management team.  

As the situation regarding the COVID-19 pandemic is dynamic, Pan American is currently unable to determine the impact on its 2020 operating guidance and will update its guidance for 2020 as soon as it is practical. 

Pan American continues to implement and enforce measures to protect the health and safety of its personnel and communities that are consistent with those recommended by the local health authorities and the World Health Organization. For more information, please see panamericansilver.com/covid-19-response.

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