• Production up 55% for silver and 102% for gold compared with Q1 2023

• 151% increase in operating cash flow before working capital changes compared with Q1 2023

• 2023 guidance maintained

All amounts expressed in U.S. dollars unless otherwise indicated. Unaudited tabular amounts are in millions of U.S. dollars and thousands of shares, options, and warrants, except per share amounts, unless otherwise noted.

VANCOUVER, British Columbia--(BUSINESS WIRE)-- Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) ("Pan American" or the "Company") today reported unaudited results for the quarter ended June 30, 2023 ("Q2 2023"), inclusive of the assets acquired through the Yamana Gold Inc. ("Yamana") transaction, which closed on March 31, 2023.

"Our Q2 2023 results show the significant enhancement in the scale and quality of our portfolio following the strategic acquisition of Yamana. Production is up 55% for silver and 102% for gold compared with the prior quarter, while the addition of three new low-cost producers provided tangible benefits to the Company's cost structure. Based on year-to-date production and costs, we are maintaining our guidance for 2023," said Michael Steinmann, President and Chief Executive Officer. "Revenue of $639.9 million reflects the step change in our operating base, and drove a 151% increase in operating cash flow before working capital changes compared with Q1 2023. These results deliver on the benefits we had expected from the Yamana transaction, and have allowed us to repay a net $55.4 million of debt and distribute $36.4 million in dividends in the past quarter. We are also on track to meet our target of realizing $40 million to $60 million in synergies through the transaction."

"We have made significant progress on our commitment to optimize our portfolio by concluding agreements on the disposition of three non-core assets. On July 31, 2023, we announced the sales of Pan American's interests in the MARA project in Argentina, the Morococha mine in Peru, and the Agua de la Falda project in Chile, as well as non-core equity investments. These dispositions will significantly reduce project development, reclamation and care and maintenance costs going forward, and the cash proceeds will further strengthen our balance sheet. Pan American is well positioned to build on the momentum for growth and deliver returns to shareholders," added Mr. Steinmann.

The following highlights for Q2 2023 include certain measures that are not generally accepted accounting principles ("non-GAAP") financial measures. Please refer to the section titled “Alternative Performance (Non-GAAP) Measures” at the end of this news release for further information on these measures.

Consolidated Q2 2023 Highlights:

Silver production of 6.02 million ounces and record gold production of 248.2 thousand ounces. Silver production was slightly above management's outlook for Q2 2023 while gold production was at the high end of the quarterly outlook.
Revenue was $639.9 million, up 64% compared with Q1 2023, reflecting the expanded operating base following the Yamana transaction.
Net loss of $47.4 million ($0.13 basic loss per share) reflects non-cash accounting impacts, including a net of tax impairment charge of $33.3 million related to the sale of the Company's 92.3% interest in the Morococha mine, and $26.1 million net of tax fair value adjustments on finished goods inventories related to the Yamana transaction accounting.
Adjusted earnings were $14.7 million, or $0.04 adjusted earnings per share, which exclude the impairment charge and the fair value adjustment noted above, among other adjustments.
Cash flow from operations was $117.0 million, net of $50.5 million in tax payments.
Silver Segment Cash Costs and All-in Sustaining Costs ("AISC") per silver ounce of $9.29 and $15.70, respectively. Excluding Net Realizable Value ("NRV") inventory adjustments, Silver Segment AISC was $14.87 per ounce.
Gold Segment Cash Costs and AISC per gold ounce of $1,045 and $1,342, respectively. Excluding NRV inventory adjustments, Gold Segment AISC was $1,369 per ounce.
As at June 30, 2023, the Company had working capital of $743.8 million, inclusive of cash and short-term investments of $409.2 million (of which $192.9 million of cash is restricted to the MARA project), and $470.0 million available under its $750.0 million revolving Sustainability-Linked Credit Facility ("SL-Credit Facility"). The Company made a net repayment of debt of $55.4 million in Q2 2023. Total debt as at June 30, 2023 was $1,135.3 million, comprised of amounts drawn on the SL-Credit Facility, construction and other loans, leases and the senior notes Pan American assumed through the Yamana transaction.
A cash dividend of $0.10 per common share with respect to Q2 2023 was declared on August 9, 2023, payable on or about September 1, 2023, to holders of record of Pan American’s common shares as of the close of markets on August 21, 2023. The dividends are eligible dividends for Canadian income tax purposes.
Three ILO 169 consultation meetings for the Escobal mine were held in Q2 2023. During the meetings, the Company and government institutions completed the information transfer process described in the phase 2 consultation timeline. The Company also participated in a working meeting with the Xinka Parliament, their consultants, and government institutions to present details on the dry-stack tailings facility, management of water, and vibrations from blasting activities when the mine was in operation. At this time, no date has been set for a potential restart of operations at Escobal.
The Company reaffirmed its 2023 Operating Outlook for production of silver, gold, base metals, Cash Costs and AISC, and sustaining and project capital expenditures, as presented in the Company's Q2 2023 MD&A dated May 10, 2023. Silver production is estimated to be between 21 million and 23 million ounces and gold production between 870 thousand to 970 thousand ounces in 2023. The estimated range for Silver Segment AISC is $14.00 to $16.00 per ounce and $1,275 to $1,425 per ounce for Gold Segment AISC.


CONSOLIDATED RESULTS
Three months ended June 30, 2023 Twelve months ended December 31, 2022

Weighted average shares during period (millions) 364.4 210.5
Shares outstanding end of period (millions) 364.4 210.7


Three months ended June 30, 2023 2022

FINANCIAL
Revenue $ 639.9 $ 340.5
Mine operating earnings (loss) $ 70.6 $ (31.6)
Net loss $ (47.4) $ (173.6)

Basic loss per share(1) $ (0.13) $ (0.83)
Adjusted earnings (loss)(2) $ 14.7 $ (6.5)

Basic adjusted earnings (loss) per share(1) $ 0.04 $ (0.03)

Net cash generated from operating activities $ 117.0 $ 20.8
Net cash generated from operating activities before changes in working capital(2) $ 108.7 $ 40.5
Sustaining capital expenditures(2) $ 86.7 $ 56.5

Non-sustaining capital expenditures(2) $ 39.3 $ 19.9

Cash dividend paid per share $ 0.10 $ 0.12


PRODUCTION
Silver (thousand ounces) 6,024 4,537
Gold (thousand ounces) 248.2 128.3
Zinc (thousand tonnes) 9.3 9.0
Lead (thousand tonnes) 4.4 4.6
Copper (thousand tonnes) 1.3 1.3

CASH COSTS(2) ($/ounce)
Silver Segment 9.29 12.10
Gold Segment 1,045 1,132

AISC(2) ($/ounce)
Silver Segment 15.70 17.30
Gold Segment 1,342 2,051

AVERAGE REALIZED PRICES(3)
Silver ($/ounce) 23.45 22.03
Gold ($/ounce) 1,975 1,850
Zinc ($/tonne) 2,515 3,811
Lead ($/tonne) 2,123 2,162
Copper (/tonne) 8,550 9,731

(1)
Per share amounts are based on basic weighted average common shares.
(2)
Non-GAAP measure; please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures.
(3)
Metal prices stated are inclusive of final settlement adjustments on concentrate sales.

Cash Costs, AISC, adjusted earnings, basic adjusted earnings per share, sustaining and non-sustaining capital, working capital, total debt and net cash are non-GAAP financial measures. Please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information on these measures.

This news release should be read in conjunction with Pan American's unaudited Condensed Interim Consolidated Financial Statements and our MD&A for the three and six months ended June 30, 2023. This material is available on Pan American’s website at panamericansilver.com, on SEDAR+ at www.sedarplus.com and on EDGAR at www.sec.gov.

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