Pan American Silver Corp. Mining Forum Americas 2026

Yeah, perfect. Thanks, Kos. Welcome, everybody. Pleasure to be here and give you a quick intro here. I think most of you obviously know the company. Lots of impressive changes to the company over the last few years. Obviously, first on the M&A side, which I would call very timely M&A activity over the last few years, which obviously allow us now to take advantage of these high metal prices. You see there our assets that we have and projects, that is the Q2 numbers there, $1.3 billion of revenue from those assets. They will go for a long time, many of those. We have a lot of big builds ahead of us, very exciting projects. I am sure Rick Cosmos will talk about that. We just updated our reserve, 511 million ounces of silver reserve. The biggest reserve in the world, and it will continue to grow.

It does not include yet the incredible discoveries that we made at La Colorada. I will sure have time to talk a bit later about that skarn development on La Colorada, which actually now will become our biggest silver mine, even being ahead of Juanicipio, the 44% project we purchased from MAG Silver last year. La Colorada, once it is dusted and done, will produce over 19 million ounces of silver in a long, long period. The first phase of that expansion or new project of the skarn will run for 37 years, and that is only about half of the current resources that we discovered at that deposit. So really an amazing discovery. I thought I would just show a few slides here. I am sure everybody is interested in cost. I show you here the cost, how they evolved over the years.

So you see quarter by quarter there, the gray bars are our silver mines. Remember, we always show silver and gold separate. We do not use equivalencies. I cannot sell an equivalent ounce of silver. There is no market for that. So these are pure silver ounces and pure gold ounces. The price we achieved, the average price for a given quarter. In blue, you see the all-in sustaining costs and their net of by-product credit. So you will obviously see that on the silver side, there is a lot of up and downs, and that is really driven by those by-products. Silver does not occur on its own. It always comes with by-products. Any kind of gold and base metals you can imagine that we have there. Of course, like Q1, very low cost because of the very high metal prices that we all enjoyed in Q1.

That will normalize again. I think our cost will be somewhere in the $17-$18 range, I guess, for the year. When you look at the gold side, it is a clear picture because gold has normally less by-products. You see there a slight increase in cost over the last two years and really driven by the worldwide inflation we see right now. Of course, big driver is the oil price right now. You always should keep in mind that although Pan American is an underground operator, we only have really one large open pit, and a lot is electrified and diesel fuel is only 5% of our production cost, higher oil price is obviously rolling through everything. Higher oil price will impact every and any cost we see. So the total increase is way more than just an increase on that 5%.

We all see that when we go out and do our shopping or do our businesses, and that is what you see. But overall, still very well-controlled cost increases here. This is not looking like 2010. If you now remember that big cost inflation we had in the mining space. This is well measured, obviously, because there is a lot of goods and services available now in the mining space, and that is the reason why we all enjoy these huge margins. What do we do with these margins? Well, we sit on incredible strong balance sheet, about $1.8 billion in cash. We have about $3.5 billion of liquidity available to us, and we still generate obviously a lot of free cash flow. We decided this year to return 35%-40% of that free cash flow.

When we announced that was equivalent to about $1 billion to shareholders, that will still leave us well sufficient money to build the big expansion at La Colorada and expansions at other projects. So we see there historically, we paid dividends since 2010, but share buybacks have been few and far apart there. Now there is actually enough cash available to really make a difference to our share count. We decided to fix our dividend at $305 million as a fixed number per year. When we buy back shares, your dividend will increase every quarter a little bit because there is less shares outstanding. Then put about the other around $700 million into share buybacks, and we are well on track with that program to go through this for the year. So great return to shareholders from all those big cash flows.

Then there is a lot of upside, and I am sure Kos can talk about a few of them. Obviously, La Colorada being the biggest one. Shahuindo being our biggest cash flow right now with very exciting long-term projects. Timmins also very exciting what we see there, what is coming, and of course, Juanicipio that we purchased at 44% last year, which is doing exceedingly well. I think with that overview, I come over, Kos, and we can go through some Q&A.

Yeah. Look, I'm pretty much on track, so I'm pleased with the whole progress for the first six months. Our production is not evenly distributed through the year. Our production is always back-end loaded. The biggest reason is really difference between dry seasons and rainy seasons with some of our, the Shahuindo mine in Peru. Q4 is always our biggest production quarter. That will be no difference this year. When you look at that obviously has impacts to cost. The cost will be lower in Q4 because we produce more ounces, et cetera. When you look quarter to quarter, there's quite a bit of difference. We try to help you as an analyst and help the shareholders and show ideas how these quarters look like so that people don't just divide them because they're so different during the year.

But look, I'm really happy how the first six months evolved here. Cost side looked really good. Silver side, right on track. A bit harder sometimes on the gold side. We got a bit harder hit on some of the mines with the weather, starting in Chile. You all saw that the impact to some of the copper producers, obviously same to us. That El Niño event will now move up further north and will get closer to Shahuindo or Huaron in Peru. Normally hits Peru right in November or December, so we'll see what the impact will be for that. But so far, so good, yeah.

Yeah. Sure. Look, more than replacement again of all the silver production. This is now going on for nearly 20 years. It's not every year exactly a full replacement, but most. I think when you look at the 20 year, we replace probably around 85% of what we produce. Our replacement cost is $1.11. If you divide what it costs us to find those ounces. Of course, there's no way that I can purchase an ounce of silver for $1.11, never has been probably in the past neither. Brownfield exploration success is the best value driver you can have. Obviously, the biggest one and most exciting one is La Colorada. I joined Pan American in 2004. La Colorada was a very small mine and a very small reserve.

When you go fast-forward, still a big reserve on the structures, on the veins that we're mining right now. La Colorada is producing right now 6 million ounces, but the big discovery of the skarn, which sits right below the veins. At the moment, we have about 450 million tons. By the way, that's not in the reserve, it's in the resource at the moment. We just showed an updated PEA increasing the production at La Colorada from currently about 2,200 tons to 15,000 tons a day. La Colorada will be producing somewhere between 19 and 20 million ounces of silver for a very long time. I mentioned that before. The first phase of that expansion will run for 37 years. There's a lot of more upside. We keep finding more veins, we keep finding more skarn ore bodies.

Of course, this is going to go way beyond my lifetime, and I'm really excited about that discovery. Again, we didn't have to buy this discovery. We have far enough cash to build this with cash on hand. So definitely when you replace your reserve or make discoveries like that, the value generation is unmatched.