- Announces 20% increase to the declared dividend and a new dividend policy

VANCOUVER, BC, Feb. 23, 2022 /CNW/ - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) ("Pan American" or the "Company") today reported fourth quarter ("Q4 2021") financial results and audited financial results for the year ended December 31, 2021 ("FY 2021"). The Company also provided its outlook for 2022 production, costs and capital expenditures, and announced a new dividend policy with a 20% increase to the dividend declared today.

"Q4 2021 marked a clear improvement in production and Silver Segment costs over the first three quarters of the year, contributing to cash flow from operations in the quarter of $118.1 million," said Michael Steinmann, President and Chief Executive Officer. "Our guidance for 2022 assumes the COVID-19 impact will diminish over the course of the year, while incorporating the effect of lower workforce deployment levels in January and February due to the Omicron variant. We are evaluating strategic alternatives for Morococha and have excluded the mine from our 2022 guidance while placing the operation on care and maintenance."

Added Mr. Steinmann: "Strong operational cash flows resulted in a $116.4 million increase to our cash balances in 2021. Pan American exited the year with cash and cash equivalents of $283.6 million and short term investments of $51.7 million, enabling us to increase the return to our shareholders through a new dividend policy announced today. At the same time, our strong financial position allows us to invest in growth by advancing our large La Colorada Skarn project. In 2022, we plan to complete 55,000 metres of infill and exploration drilling and commence development of the access ramp and ventilation shaft for the Skarn."

Q4 2021 and FY 2021 Highlights:

Preliminary production results were previously reported on January 19, 2022. Consistent with that disclosure, consolidated silver production was 5.3 million ounces in Q4 2021 and 19.2 million ounces in FY 2021. Consolidated gold production was 156.7 thousand ounces in Q4 2021 and 579.3 thousand ounces in FY 2021. Silver and gold production in 2021 were both within the revised guidance ranges provided on November 9, 2021.
Revenue was $422.2 million in Q4 2021 and $1.6 billion for FY 2021. Revenue in Q4 2021 was impacted by timing of sales, with a 13.3 thousand ounce build in gold finished goods inventory.
Net earnings were $14.7 million ($0.07 basic earnings per share) and $98.6 million ($0.46 basic earnings per share) in Q4 2021 and FY 2021, respectively. FY 2021 net earnings included mark-to-market losses on short-term investments of $59.7 million, primarily for our interest in New Pacific Metals Corp. and an income tax expense of $146.4 million. The high effective tax rate primarily reflects a significant number of expenses in the year with no corresponding tax benefit, largely the Escobal care and maintenance expenditures and the non-cash investment losses related to New Pacific.
Adjusted earnings were $39.9 million ($0.19 basic adjusted earnings per share) and $161.8 million ($0.77 basic adjusted earnings per share) in Q4 2021 and FY 2021, respectively.
Net cash generated from operating activities was $118.1 million and $392.1 million in Q4 2021 and FY 2021, respectively.
FY 2021 Silver Segment Cash Costs and All-in Sustaining Costs ("AISC") of $11.51 and $15.62 per silver ounce sold, respectively, were slightly lower than the revised guidance provided on November 9, 2021.
FY 2021 Gold Segment Cash Costs and AISC of $899 and $1,214 per gold ounce sold, respectively, were within the guidance ranges provided throughout 2021.
Capital expenditures totaled $254.1 million in 2021, comprised of $207.6 million of sustaining capital and $46.5 million of project capital. The project capital was largely invested in the La Colorada Skarn project for exploration drilling, development studies, and the start of construction of the concrete-lined ventilation shaft and refrigeration plant. Project capital was also invested at Timmins for the Wetmore exploration project. Sustaining capital was below and project capital was above the revised guidance provided on November 9, 2021.
At December 31, 2021, the Company had cash and short-term investment balances of $335.3 million, working capital of $613.5 million, and the full $500.0 million available under its sustainability-linked credit facility. Total debt of $45.9 million was related to lease liabilities and construction loans.
Pan American introduces a new dividend policy

The Board of Directors has approved a new dividend policy, which adds a variable amount to a base dividend of $0.10 per common share paid on a quarterly basis. The variable quarterly dividend will be linked to the net cash on the balance sheet for the previous quarter, as illustrated in the following table:

Net Cash Position(1)

Base Dividend per Quarter Variable Dividend per Quarter Total Dividend per Quarter
Less than $100 million $0.10 per share $0.00 per share $0.10 per share
$100 million to less than $200 million $0.10 per share $0.01 per share $0.11 per share
$200 million to less than $300 million $0.10 per share $0.02 per share $0.12 per share
$300 million to less than $400 million $0.10 per share $0.06 per share $0.16 per share
$400 million or greater $0.10 per share $0.08 per share $0.18 per share

(1) Net cash and total debt are non- GAAP measures; please refer to the "Alternative Performance (non-GAAP) Measures" section of this news release for further information.

Based on the new dividend policy, the Board of Directors has approved a 20% increase in the cash dividend to $0.12 per common share, or approximately $25.3 million in aggregate cash dividends, payable on or about March 21, 2022, to holders of record of Pan American's common shares as of the close on March 7, 2022. As at December 31, 2021, the Net Cash Position of $237.7 million is calculated in the following table:

Cash and cash equivalents 283,550

Short-term investments, other than equity securities (1) —

Total debt (45,861)
Net cash 237,689

(1) As at December 31, 2021, the Company's short-term investments are comprised entirely of equity investments and largely in exploration and development companies.

ILO 169 Consultation for Escobal underway

The Company is pleased to report that the pre-consultation meetings for the court-mandated ILO 169 consultation process for the Escobal mine in Guatemala have resumed following delays due to COVID-19. Three pre-consultation meetings were held in 2021, and additional meetings were held in January and February of 2022. The Guatemalan Ministry of Energy and Mines is leading the consultation process with the Xinka People, and Pan American is a participant. Pan American looks forward to continuing its participation in a transparent, respectful and inclusive process during 2022.

Morococha operation transitions into care and maintenance

As previously disclosed, in June 2010, we completed a framework agreement with Aluminum Corporation of China ("Chinalco"), which required the relocation of core Morococha facilities, including the Amistad processing plant, in stages to enable the gradual expansion of Chinalco's Toromocho open pit copper mine. In early 2022, we agreed with Chinalco to complete the closure of the Amistad plant and we will be placing the Morococha operation on care and maintenance as we evaluate alternative opportunities, including monetization, joint venture operation of the asset, or accelerating exploration of prospective areas that could enhance the attractiveness of allocating capital to build a new processing facility.

Mr. Ignacio Couturier appointed Chief Financial Officer of Pan American

Pan American is pleased to announce the appointment of Ignacio Couturier to succeed Rob Doyle, who is retiring as Chief Financial Officer (CFO) of Pan American. Ignacio has been with Pan American for 20 years in progressively more senior roles, most recently as VP Finance. He will assume the position of CFO effective March 1, 2022, and will be based in our Head Office in Vancouver. Over the past six months, the Company has conducted a rigorous global selection process in which both external and internal candidates were assessed for the role. We are pleased that this process has resulted in the selection of an internal candidate with a detailed understanding of Pan American's business.

CONSOLIDATED RESULTS
December 31, 2021 December 31, 2020

Weighted average shares during period (millions) 210.3 210.1
Shares outstanding end of period (millions) 210.5 210.3

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Pan American Silver declares dividend of $0.12 per common share under new dividend policy

VANCOUVER, BC, Feb. 24, 2022 /CNW/ - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) ("Pan American" or the "Company") today announced that the Board of Directors of Pan American has approved a 20% increase in the cash dividend to $0.12 per common share based on our new dividend policy. The policy adds a variable amount to a base dividend of $0.10 per common share paid on a quarterly basis. The variable quarterly dividend will be linked to the net cash on the balance sheet for the previous quarter, as illustrated in the following table: