Pan American Silver Corp.

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver first quarter 2026 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Suram Susecki, Vice President, Investor Relations. Please go ahead, Ms. Susecki.

Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our first quarter 2026 results. This call includes forward-looking statements and information and references non-GAAP measures. Please see the cautionary statements in our MD&A Q1 news release, shareholder return framework news release, and presentation slides for the period ended March 31, 2026, 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, and thank you for joining us today. I'm pleased to report another solid quarter of operating performance delivering strong operating earnings. Attributable silver production of 6.4 million ounces and attributable gold production of 169,000 ounces were in line with our outlook. Silver segment all-in sustaining costs of $6.63 per ounce came in well below guidance, while gold segment all-in sustaining costs of $1,000 $851 per ounce were consistent with expectations. The performance on silver segment costs was driven by the contribution of low cost ounces from Juanisipio and the impact of higher gold prices. Revenue of $1.2 billion was impacted by the buildup of approximately 644,000 ounces of silver in inventory, primarily at La Clarada due to the timing of concentrate shipments. Net earnings were $456 million, or $1.08 per share, and adjusted earnings were $1.09 per share. We continued to generate strong levels of free cash flow, reflecting both our operating performance and favorable metal prices. In the first quarter, we generated $488 million of attributable free cash flow, This has further strengthened our balance sheet, and we ended Q1 with a record cash and short-term investment balance of over $1.8 billion, including cash attributable to our interest in 20 CPO. The strength of our free cash flow generation and balance sheet has enabled us to introduce an enhanced shareholder return framework. The new framework targets the return of 35 to 40% of annual attributable free cash flow to shareholders through a combination of dividends and common share repurchases under our normal course issuer bid of up to $1 billion. We expect to pay aggregate dividends of approximately $305 million during 2026, equivalent to a quarterly dividend of 18 cents per common share based on the current share count. and use approximately $700 million for share repurchases. By accelerating share repurchases, we aim to enhance long-term per share value by increasing each shareholder's exposure to our high-quality portfolio and supporting sustainable growth in dividends over time. This enhanced shareholder return framework reinforces our disciplined approach to capital allocation while maintaining sufficient cash for growth and M&A activities, while providing resilient shareholder returns across commodity cycles. Focusing on growth, the release of the revised PA of the La Clarada expansion in March provides greater clarity on the capital requirements and long-term potential of this important organic growth project. The expansion is expected to produce an average of 19.1 million ounces of silver annually during the peak five years following construction and ramp-up. The revised PA represents a huge improvement over the original study with higher grades, lower capital intensity, stronger overall returns, and reduced technical risk due to the use of a conventional long-haul open-strip stope mining method. The project improved as a result of continued exploration success, which identified new high-grade veins east of the current mining area. Exploration drilling continues to intersect mineralization beyond current resources, highlighting the potential to further expand the resource base and extend peak production. The Board approved $265 million in project capital over the next five years to support development of a ramp to access to SCARN mineralization. We now expect to spend between $92 to $95 million on the LaGuardia SCARN project in 2026, increasing consolidated 2026 project capital guidance to between $240 and $255 million. We're also making progress at our Jacobina optimization project. During Q1, we completed construction of two new carbon in pulp tanks and implemented improvements to the tailings pump system. One of the most significant opportunities we see at Jacobina is simplifying and optimizing the process plant flow sheet. Conceptual engineering is nearing completion, and we will transition to basic engineering in the coming months. We also expect detailed engineering for a filtration plant, filter tailings stack, and a temporary mine-based backfill plant within the coming month. At Escobar, the government of Guatemala is continuing the ILO 169 consultation process, and engagement has been ongoing, including recent site visits to review care maintenance activities and confirm compliance with the court-ordered suspension. At this time, there is no timeline for the conclusion of the Escobar ILO 169 consultation or for the restart of operations at the mine. Given our strong operating performance in the first quarter, we are maintaining our full year outlook for production, all in sustaining costs and sustaining capital. We expect some gold production to shift into the fourth quarter of 2026. We are monitoring potential cost pressures, particularly related to fuel prices. Due to most of our mines being underground, our direct exposure to fuel is relatively limited, approximately 5% of total operating costs. High fuel prices can have broader inflationary effects, including on labor and consumables. We remain focused on managing these pressures proactively. To recap, 2026 is off to an excellent start. We delivered another strong quarter. We are generating robust free cash flow, production, and costs are in line with our guidance. And we have introduced an enhanced shareholder return framework that reflects this strong cash generation. And with that, I'll turn the call over for questions.