Pan American Silver Corp.

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver third quarter 2025 results conference call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Siren Sasecki, Vice President, Investor Relations. Please go ahead, Ms. Sasecki.

Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our third quarter 2025 results. This call includes forward-looking statements and information and references non-GAAP measures. Please see the cautionary statements in our MD&A news release and presentation slides for the Q3 2025 results, all of which are available on our website. I'll now turn the call over to Michael Steinman, Pan American's President and CEO.

Good morning, everyone. I'm glad you could join us to discuss Pan American's Q3 2025 results. Over the past quarter and into Q4, we have benefited from the increase in silver and gold prices and a solid performance on cost. As a result, we achieved a record attributable free cash flow of $251.7 million in Q3. On September 4th, we completed our acquisition of MAG Silver. While we have had only a one-month contribution from our 44% interest in the Juanisipio mine in Mexico, we're already seeing the impact on lowering costs and improving margins, underscoring the strategic rationale for this transaction. We account for Juanisipio using the equity method, but report production, cash costs, all in sustaining costs and capital expenditures on an attributable base to reflect our 44% interest. I'm pleased to say that we have delivered another quarter of strong financial results. Attributable revenue in Q3 was a record of $884.4 million. Net earnings were $169.2 million or 45 cents basic earnings per share. This includes a $21.7 million loss from the sale of a subsidiary and $16.3 million of income from Juanisipio. The loss from the sale of a subsidiary is primarily due to a $28.6 million reduction to the $137.4 million gain we had previously booked on December 2024 of the sale of La Arena related to net working capital adjustments. It was partially offset by a $6.8 million gain on the sale of our 80% interest in La Pepa, a non-core development stage project in Chile, which we've sold for $40 million in cash proceeds in September 2025. Adjusted earnings were $181 million, or 48 cents basic adjusted earnings per share. Attributable cash flow from operations was a record of $323.6 million. Cash and short-term investments at the end of Q3 total $910.8 million, plus $85.8 million of cash at Juan Ecipio for our 44% interest. This is after spending a net of $409.3 million on the MAG acquisition, including transaction costs. With $1.7 billion of total available liquidity, we remain in a very strong financial position. Given the strong financial position and cash flow generation, I'm happy to report that the Board has approved an increase to the dividend to 14 cents per common share with respect to Q3 2025. Despite the cash balance at the end of the quarter reflecting the impact of the cash paid for the MAG acquisition, the Board exercises its discretion with respect of the dividend this quarter given the strong cash flow being generated. While we did not repurchase any shares in Q3, due in part to the blackout associated with the MAG acquisition, we remain prepared to act opportunistically. During the first nine months of 2025, we have returned $146.9 million in dividends and share repurchase to shareholders, and we will add another $59.1 million with the dividend payment approved yesterday. Turning now to operations. Attributable silver production in Q3 was 5.5 million ounces, including 580,000 ounces from Kwanesipio's one-month contribution. We continue to be pleased by the performance at La Corada, where the improved ventilation conditions are allowing mine rehabilitation and development rates to accelerate, thereby increasing the number of production areas, particularly in the deep, high-grade zones of Candelaria East. Silver production was impacted by lower silver grades at Waran, reflecting increased development and reduced stope ore mining rates in order to grow the inventory of prepared high-grade stopes, which are expected to enhance future production stability and reliability beginning in mid-2027. Silver segment cash costs were $10.41 per ounce, and all in sustaining costs were $15.43 per ounce. These costs are lower than Q2 2025, already demonstrating the positive impact 20CPO is having on reducing silver costs and improving margins, even though it has only been in our portfolio since early September. The quarter also benefited from low all-in sustaining costs that set a model due to high byproduct gold production and prices compared to Q2. Partially offsetting these factors was the lower silver production at Varon and the royalty expense at La Colorado of $8.3 million in Q3, largely payable to a third party as part of a profit-sharing agreement for mining on an adjacent concession. Attributable gold production was 183,500 ounces. As we mentioned during our Q2 call, various technical issues at Cerro Moro, Peñon, Timmins, and Minera, Florida, as described in our MD&A, are expected to linger into Q3, consistent with our expectation of a back-end weighted gold production. The technical issues at Cerro Moro and El Peñon also reduced silver production in Q3. Gold segment cash costs were $1,325 per ounce and all in sustaining costs, excluding NRV inventory adjustments, were $1,697 per ounce. Overall production and cost across both the silver and gold segments remain in line with our 2025 operating outlook. However, we have raised our attributable silver production guidance to 22 to 22.5 million ounces and lowered silver segment all-in sustaining costs to $14.50 to $16 per ounce to incorporate Juanisipio's contribution. All other costs and production guidance remain unchanged. We invested $35.3 million in capital projects this quarter, mainly at La Glorada and Jacobina. At La Clarada, we continued exploration and equipment investments to further expand access to high-grade zones in the deeper eastern extents of the Candelaria Ore Zone. In September, we announced new high-grade drill results and added 52.7 million ounces of silver to inferred mineral resource, which substantially extends resource potential to the east and southeast beyond our current mining areas. This is an exciting development that offers significant synergies to a potential two-phase development approach to our large La Glorada scarn project. The first phase would combine development of the scarn with the vein mine, which is expected to result in a higher grade, lower tonnage, and less capital intensive development to what was described in our 2024 PEA. The second phase would involve the cave mine expansion. This phase development approach allows an enhanced vein mine to operate in parallel, utilizing shared infrastructure synergies and enhancing overall project value. A PA for this two-phase development approach combined with enhanced vein mining is underway and is expected to be issued in Q2 2026. Furthermore, we are well advanced on partnership discussions that consider this enhanced development approach. At Jacobin, our results from the extensive optimization study have identified a number of opportunities to relieve constraints that could potentially benefit mine life, production, and operational efficiencies. These opportunities include, but are not limited to, a tailings filtration and filter stack project to relieve existing long-term tailings capacity limitations, mine paste backfill plant project to take advantage of the tailings filtration circuit thereby enabling an increase in ore recovery in selective high-grade ore zones and a significant process plant streamlining project to improve reliability, reduce throughput constraints, reduce mine operating costs, and enhance gold recovery. We have recently commissioned a pilot plant on site to demonstrate the benefits that can be obtained by streamlining a plant flow sheet which has been defined through bench-scale metallurgical laboratory testing. We have also engaged a leading engineering firm to develop detailed designs, schedules, and cost estimates for completing these optimization projects. We will continue to provide updates on implementing these exciting projects as these engineering efforts advance over the next year. At Escobar, the Guatemalan Ministry of Energy and Mines has held several separate working meetings with the ministries involved in the ILO 169 consultation process, representatives from the SINCA Parliament and the company. The Ministry of Mines has also made several appointments of key personnel to oversee and continue activities for the Escobar consultation process. The ministry has not provided a timeline for the completion of the ILO 169 consultation, but his cousins remain active and respectful. Before closing, I would like to recognize Steve Busby for his remarkable contributions to Pan American Silver over the past 22 years, with 17 years spent as Chief Operating Officer. Steve is transitioning to the role of Special Advisor to the CEO, and I'm grateful we will continue to benefit from his deep technical expertise. I also want to welcome Scott Campbell as our new Chief Operating Officer. Scott brings 25 years of operational experience in Latin America, and I look forward to continuing to work closely with him as we advance our strategy. I would now be happy to take your questions together with the other members of our management team.