Q3 2025 Pan American Silver Corp Earnings Call

November 13, 2025

Speaker #1: Thank you for standing by. This is the conference operator. Welcome to the PAN AMERICAN SILVER Q3, 2025 results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded.

Operator: Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Q3 2025 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 1 on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then 0. I would now like to turn the conference over to Siren Fisekci, Vice President, Investor Relations. Please go ahead, Ms. Fisekci.

Operator: Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver Q3 2025 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. 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 Fisekci, Vice President, Investor Relations. Please go ahead, Ms. Fisekci.

Speaker #1: After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star, then one on your cell phone keypad.

Speaker #1: 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 Fisekci, Vice President of Industrial Relations.

Speaker #1: Please go ahead, Ms. Fisekci.

Speaker #2: 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.

Siren Fisekci: Thank you for joining us today for Pan American Silver's conference call and webcast to discuss our Q3 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 Steinmann, Pan American's President and CEO.

Siren Fisekci: Thank you for joining us today for Pan American Silver's Conference Call and ebcast to discuss our Q3 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 Steinmann, Pan American's President and CEO.

Speaker #2: 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.

Speaker #2: I'll now turn the call over to Michael Steinmann, Pan American's President.

Speaker #2: CEO. Good morning, everyone.

Michael Steinmann: 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 record attributable free cash flow of $251.7 million in Q3. On 4 September, we completed our acquisition of MAG Silver. While we have had only a 1-month contribution from our 44% interest in the Juanicipio 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 Juanicipio 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.

Speaker #3: 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.

Speaker #3: As a result, we achieved record attributable free cash flow of $251.7 million in Q3. On September 4th, we completed our acquisition of MagSilver. While we have had only a one-month contribution from our 44% interest in the Juanicipio mine in Mexico, we're already seeing the impact on lowering costs and improving margins underscoring the strategic rationale for this transaction.

Michael Steinmann: While we have had only a 1-month contribution from our 44% interest in the Juanicipio 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 Juanicipio 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.

Speaker #3: We account for Juanicipio using the equity method, but the report production cash cost all in sustaining costs and capital expenditures on an attributable base to reflect our 44% interest.

Speaker #3: 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.

Michael Steinmann: 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 $0.45 basic earnings per share. This includes a $21.7 million loss from the sale of a subsidiary and $16.3 million of income from Juanicipio. 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 20 December 2024 of the sale of La Arena related to networking capital adjustments.

Speaker #3: This includes a 21.7 million loss from the sale of a subsidiary, and 16.3 million of income from Juanicipio. 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 networking capital adjustments.

Michael Steinmann: This 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 $0.48 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 totaled $910.8 million, plus $85.8 million of cash at Juanicipio 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.

Speaker #3: offset by a 6.8 million This was partially 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.

Speaker #3: 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 investment at the end of Q3 totaled $910.8 million plus $85.8 million of cash at Juanicipio for our 44% interest.

Speaker #3: 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.

Speaker #3: Given this strong financial position and cash flow generation, I'm happy to report that the board has approved an increase to the dividend to $0.14 per common share with respect to Q3 2025.

Michael Steinmann: Given this strong financial position and cash flow generation, I'm happy to report that the board has approved an increase to the dividend to $0.14 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 exercised 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 to the MAG acquisition, we remain prepared to act opportunistically. During the first 9 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.

Speaker #3: Despite the cash balance at the end of the quarter reflecting the impact of the cash paid for the MAG acquisition, the board exercise is discretion with respect to the dividend this quarter given the strong cash flow being generated.

Speaker #3: 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.

Michael Steinmann: While we did not repurchase any shares in Q3, due in part to the blackout associated to the MAG acquisition, we remain prepared to act opportunistically. During the first 9 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.

Speaker #3: During the first nine months of 2025, we have returned 146.9 million in dividends and share repurchases to shareholders, and we will add another 69.1 million with the dividend payment approved yesterday.

Speaker #3: Turning now to operations. Attributable silver production in Q3 was 5.5 million ounces, including 580,000 ounces from Juanicipio's one-month contribution. We continue to be pleased by the performance at La Colorada, where the improved ventilation conditions are allowing mine rehabilitation and development rates to accelerate.

Michael Steinmann: Attributable silver production in Q3 was 5.5 million ounces, including 580,000 ounces from Juanicipio's one-month contribution. We continue to be pleased by the performance at La Colorada, 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 Huarón, 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.

Speaker #3: 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 Waron.

Michael Steinmann: Silver production was impacted by lower silver grades at Huarón, 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.

Speaker #3: increased development and Reflecting reduced stope or 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.

Speaker #3: 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 Juanicipio is having on reducing silver costs and improving margins, even though it has only been in our portfolio since early September.

Michael Steinmann: These costs are lower than Q2 2025, already demonstrating the positive impact Juanicipio 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 at Cerro Moro due to high by-product gold production and prices compared to Q2. Partially offsetting these factors was the lower silver production at Huarón and the royalty expense at La Colorada 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.

Speaker #3: The quarter also benefited from low all in sustaining costs at Cerro Moro due to high byproduct gold production and prices compared to Q2. Partially offsetting these factors, was the lower silver production at Waron and the royalty expense at La Colorada 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.

Michael Steinmann: 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.

Speaker #3: Attributable gold production was 183,500 ounces. As we mentioned during our Q2 call, various technical issues at Cerro Moro, Peñón Timons, and Minera Florida as described in our MD&A were expected to linger into Q3.

Speaker #3: Consistent with our expectation, of a back end weighted gold production. The technical issues at Cerro Moro and El Peñón also reduced silver production in Q3.

Michael Steinmann: 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 Juanicipio's contribution. All other cost and production guidance remain unchanged. We invested $35.3 million in capital projects this quarter, mainly at La Colorada and Jacobina.

Speaker #3: Gold segment cash costs were $1,325 per ounce and all in sustaining costs excluding NRV inventory adjustments were $1,697 per and costs across both the silver and gold segments remain in line with our 2025 operating outlook.

Speaker #3: 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 Juanicipio's contribution.

Speaker #3: All other costs and production guidance remain unchanged. We invested $35.3 million in capital projects this quarter mainly at La Colorada and Jacobina. At La Colorada, we continued exploration and equipment investments to further expand access to high-grade zones in the deeper, eastern extents of the Candelaria ore zone.

Michael Steinmann: At La Colorada, 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 extend resource potential to the east and southeast beyond our current mining areas. This is an exciting development that offers significant synergies to a potential 2-phase development approach to our large La Colorada Skarn project. The first phase would combine development of the skarn 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.

Speaker #3: In September, we announced new high-grade raw results and added 52.7 million ounces of silver to inferred mineral resource. Which substantially extend resource potential to the east and southeast beyond our current mining areas.

Speaker #3: This is an exciting development that offers significant synergies through a potential two-phase development approach to our large La Colorada 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.

Michael Steinmann: This is an exciting development that offers significant synergies to a potential 2-phase development approach to our large La Colorada Skarn project. The first phase would combine development of the skarn 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.

Speaker #3: The second phase would involve the cave mine expansion. This phase development approach allows an enhanced vein mine to operate in parallel utilizing shared infrastructures synergies and enhancing overall project value.

Michael Steinmann: This phase development approach allows an enhanced vein mine to operate in parallel, utilizing shared infrastructure synergies and enhancing overall project value. A PEA for this 2-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 Jacobina, 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.

Speaker #3: A PEA 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.

Speaker #3: At Jacobina, 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.

Speaker #3: These opportunities include but are not limited to: a tailing filtration and filter stack project to relieve existing long-term tailings capacity limitations; mine paceback fill 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, release throughput constraints, reduce mine operating costs, and enhance gold recovery.

Michael Steinmann: 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, release 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.

Speaker #3: We have recently commissioned the 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.

Michael Steinmann: 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.

Speaker #3: 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 this engineering efforts advance over the next year.

Speaker #3: At Escobal, 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 Shinka Parliament and the company.

Michael Steinmann: At Escobal, the Ministry of Energy and Mines of Guatemala has held several separate working meetings with the ministries involved in the ILO 169 consultation process, representatives from the Xinka Parliament and the company. The Ministry of Mines has also made several appointments of key personnel to oversee and continue activities for the Escobal consultation process. The Ministry has not provided a timeline for the completion of the ILO 169 consultation, but discussions 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.

Speaker #3: The Ministry of Mines has also made several appointments of key personal to oversee and continue activities for the Escobal consultation process. The ministry has not provided a timeline for the completion of the ILO 169 consultation, but discussions remain active and respectful.

Speaker #3: 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.

Michael Steinmann: 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.

Speaker #3: 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.

Speaker #3: 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.

Michael Steinmann: 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.

Speaker #3: I would now be happy to take your questions, together with the other members of our management.

Speaker #3: team. Thank

Speaker #2: you. We'll now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request.

Operator: Thank you. We'll now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. First question is from Wayne Lam with TD Securities. Please go ahead.

Speaker #2: If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. First question is from Wayne Lam with TD Securities.

Speaker #2: Please go ahead.

Speaker #3: Oh yeah, thanks. Morning guys. Just curious on the guidance increase. Would it be safe to assume that the prior guidance for Juanicipio has remained the same as under MAG previously?

Wayne Lam: Oh, yeah. Thanks. Morning, guys. Just curious on the guidance increase. Would it be safe to assume that the prior guidance for Juanicilio has remained the same as under Mag previously? Just wondering if there's been some modest tweaks overall within the silver segment on the guidance. Just given the deal closing in September, I would've thought the pro forma silver guide would've been slightly higher. Just wondering if there are any other offsets from the other operations in the portfolio.

Speaker #3: And just wondering if there have been some modest tweaks lower within the silver segment on the guidance. Just given the deal closing in September, I would have thought the pro forma silver guide would have been slightly higher.

Speaker #3: So just wondering if there are any other offsets from the other operations in the

Speaker #3: portfolio.

Michael Steinmann: Hi, good morning. No, it's pretty similar to what Mag had. Obviously, as you can imagine, this is, we're only in the second month really of having that operation with us. We assume that the production should be pretty similar to what we've seen in September for the remaining months of the year.

Speaker #4: Hi, good morning.

Speaker #4: No, it's a pretty similar to what MAG had. Obviously, as you can imagine, this is we're only in the second month really of having that operation with us.

Speaker #4: But we assumed that the production should be pretty similar to what we've seen in September for the remaining months of the year.

Speaker #4: year. Okay, great.

Wayne Lam: Okay, great. Thanks. Then, maybe at Huarón, just on the grades and the increase in the development ore being processed. It's, it's been a couple of quarters now where you've encountered a bit higher dilution on the mining front. Just wondering if that maybe has also been a function of the reduction in the cutoff grades, just in terms of the process grades coming down a bit. Just curious if we should expect a bounce back in grades over the coming quarters, or if that's more of an active strategy that you guys are employing, to lower the cutoffs to bring in a bit more, economic material?

Speaker #3: Thanks. And then maybe at Horon, just on the grades and the increase in the development ore being processed, it's been a couple of quarters now where you've encountered a bit higher dilution on the mining front.

Speaker #3: And just wondering if that maybe has also been a function of the reduction in the cutoff grades, just in terms of the process grades coming down a bit.

Speaker #3: And just curious if we should expect a bounce back in grades over the coming quarters or if that's more of an active strategy that you guys are employing to lower the cutoffs to bring in a bit more economic material.

Speaker #4: All right, Wayne, this is Steve. I can address that one. Yeah, the initiative we started last quarter was to accelerate developments, trying to get ahead, trying to get some high-grade stokes prepared and develop an inventory of stokes to give us more reliability on production this initiative is going to take us through all of '26 into '27.

Steve Busby: Hi, Wayne, this is Steve. I can address that one. Yeah. The initiative we started last quarter was to accelerate developments, trying to get ahead, trying to get some high-grade stopes prepared and develop an inventory of stopes to give us more reliability on production. This initiative is gonna take us through all of 2026 into 2027. What you're seeing is a lot more contribution of ore from development, which is more diluted than from stope mining. It's really an initiative to try to build inventory of stopes in the mine that'll give us more flexibility in the future once we get all this development ahead of ourselves. That's what you're seeing.

Speaker #4: And so what you're seeing is a lot more contribution of ore from development, which is more diluted than from stoke mining. And it's really an initiative to try to build inventory of stokes in the mine that'll give us more flexibility in the future once we get all this development ahead of ourselves.

Speaker #4: That's what you're

Speaker #4: assuming. Okay, great.

Wayne Lam: Okay, great. Thank you. Then maybe just last one, just at Jacobina, on the optimization studies that are being undertaken. Can you give us a bit more detail on, you know, what's being optimized on the mine or at the plant, and how that might impact the future operations, if that will be on additional tonnage or lower costs, and when we might be able to see the results of that?

Speaker #3: Thank you. And then maybe just last one, just at Jacopina. On the optimization studies that are being undertaken, can you give us a bit more detail on what's being optimized on the mine or at the plant and how that might impact the future operations?

Speaker #3: If that will be on additional tonnage or lower costs and when we might be able to see the results of that.

Michael Steinmann: Yeah, great question, and there's a lot of work going on at Jacobina. I will pass it on to Steve. As you heard there, Steve will retire here as the COO, but he will stick around with us with his incredible wealth of knowledge. Steve will be very important for that kind of expansion work at Jacobina. Steve, maybe if you wanna answer the question.

Speaker #4: Yeah, yeah, great question. And there's a lot of work going on at Jacopina. I would pass it on to Steve as you heard there, Steve will retire here as the COO, but he will stick around with us with his incredible wealth of knowledge, Steve will be very important for that kind of expansion work at Jacopina.

Speaker #4: So Steve, maybe if you want to answer the question. Sure, yeah, I'd be happy to, Wayne, and great question. It's very exciting what we're seeing there.

Steve Busby: Sure, yeah. I'd be happy to, Wayne. A great question. It's very exciting what we're seeing there. The mine itself, there, it's pretty flexible because we're really mining 7. We'll be bringing on an 8th mining area with Maricota, and it gives us a lot of flexibility in terms of how the mine delivers ore to the plant in terms of throughput, expansion, tonnage, and that sort of thing. The main focus of the optimization is around the plant itself. This is an old plant. It was originally built in the '80s as a less than 4,000 ton a day plant, and it's been piecemealed over the years. A lot of components been added, a lot of circuits have been added to the flow sheet, and it's kind of a complex network of flow, if you will.

Speaker #4: The mine itself is pretty flexible because we're really mining seven, and we'll be bringing on an eighth mining area with Maracota. It gives us a lot of flexibility in terms of how the mine delivers ore to the plant in terms of throughput expansion, tonnage, and that sort of thing.

Speaker #4: The main focus of the optimization is around the plant itself. This is an old plant. It was originally built in the '80s as a less than 4,000 ton-a-day plant.

Steve Busby: This is an old plant. It was originally built in the '80s as a less than 4,000 ton a day plant, and it's been piecemealed over the years. A lot of components been added, a lot of circuits have been added to the flow sheet, and it's kind of a complex network of flow, if you will. We see an opportunity to go into the plant and streamline that plant, remove some of the circuits we don't need, clean up some of the circuitry, try to go to bigger machines, less numbers of them, reduce maintenance costs, improve reliability, improve efficiencies, and reduce costs overall.

Speaker #4: And it's been piecemealed over the years a lot of components been added, a lot of circuits have been added to the flow sheet. And it's kind of a complex network of flow, if you will.

Speaker #4: So we see an opportunity to go into the plant and streamline that plant, remove some of the circuits we don't need, clean up some of the circuitry, try to go to bigger machines, fewer numbers of them, reduce maintenance costs, improve reliability, and improve efficiencies.

Steve Busby: We see an opportunity to go into the plant and streamline that plant, remove some of the circuits we don't need, clean up some of the circuitry, try to go to bigger machines, less numbers of them, reduce maintenance costs, improve reliability, improve efficiencies, and reduce costs overall. Coupled with when we look long-term at Jacobina, we really see an opportunity to go to a filter stack tailings facility that opens up a lot of disposal space for us. Conventional tailings, we're gonna run out of capacity here probably in the mid-2030s. We wanna bring a filter plant into this flow sheet. We've been working hard. We're looking at vacuum filters like we run at El Penon.

Speaker #4: And reduce costs overall, coupled with when we look long term at Jacopina, we really see an opportunity to go to a filter stack tailings facility that opens up a lot of

Steve Busby: Coupled with when we look long-term at Jacobina, we really see an opportunity to go to a filter stack tailings facility that opens up a lot of disposal space for us. Conventional tailings, we're gonna run out of capacity here probably in the mid-2030s. We wanna bring a filter plant into this flow sheet. We've been working hard. We're looking at vacuum filters like we run at El Penon. They look quite favorable. We're kind of proposing a vacuum filter plant that would be situated down at the tailings facility, and it'll allow us to put a stack that we're designing down below the B2 dam, we call it.

Speaker #1: You here ? Probably in the mid 2030s . So we want a to bring plant filter into this flow sheet . We've been working hard .

Speaker #1: looking at We're vacuum filters like we run at El Penon . They look quite And we're favorable . kind of proposing a vacuum filter plant .

Speaker #1: That would be situated down at the tailings location of below the us , some of benefits And allow it . because we B2 add a us to designing also And the stack dam .

Steve Busby: They look quite favorable. We're kind of proposing a vacuum filter plant that would be situated down at the tailings facility, and it'll allow us to put a stack that we're designing down below the B2 dam, we call it. The location of this also provides benefits to us because we can add a modular temporary paste plant and use some of the tails to build cemented paste that we can pump into the north part of the mine where some of our higher grade mining areas are, and it allows us higher recovery of some of the higher grade stopes that we wouldn't get without some type of cemented backfill. That's where all this optimization's coming together. I hope you can appreciate it. It's a significant brownfield project in and around the plant.

Speaker #1: temporary this and use can modular We the build cemented tales to that we can pump to into the paste of the mine north part , where some of our provides higher grade mining areas are , and it allows us higher recovery of some of the higher grade stopes that we get without type of some cemented backfill .

Steve Busby: The location of this also provides benefits to us because we can add a modular temporary paste plant and use some of the tails to build cemented paste that we can pump into the north part of the mine where some of our higher grade mining areas are, and it allows us higher recovery of some of the higher grade stopes that we wouldn't get without some type of cemented backfill. That's where all this optimization's coming together. I hope you can appreciate it. It's a significant brownfield project in and around the plant.

Speaker #1: So that's where all this optimisation is coming together . you can appreciate it . I hope It's a significant project brownfield in and around the plant , so it's going be it's going to to require some careful very planning , very sequencing of how we modifications .

Steve Busby: It's going to require some very careful planning, very careful sequencing of how we make these modifications, and that's where we're working intensely with an engineering company. As we start to get the designs and the sequencing and the costing sorted out, we'll start to deliver, you know, truly what the value of this project's gonna be overall. We're very excited about it.

Speaker #1: that's And where we're working intensely with an make these engineering company . And as we start the to get and the designs sequencing and the costing sorted out , we'll start to deliver , you know , truly what the value of this project is going to be overall .

Speaker #1: But we're very excited about it .

Speaker #2: Okay , great . Thanks . That's a lot of good detail . Thanks for taking my questions best of luck to you , Steve .

Wayne Lam: Okay, great. Thanks, Ed. That's a lot of good detail. Thanks for taking my questions and best of luck to you, Steve.

Speaker #1: Thank you very .

Speaker #3: The next question is from Fahad Tariq with Jefferies . Please go ahead .

Michael Steinmann: Thank you, Brian.

Michael Steinmann: Thank you, Wayne.

Speaker #4: Thanks for taking my Hi . question . Maybe just on the gold guidance , which didn't change . Can you talk about how you're thinking about the fourth quarter and the context of some of the dilution that you cited at Timmins opinion , some of the development delays you cited at Minera Florida , and just trying to get a sense of kind of the confidence in the fourth quarter on the gold side .

Operator: The next question is from Fahad Tariq with Jefferies. Please go ahead.

Fahad Tariq: Hi. Thanks for taking my question. Maybe just on the gold guidance, which didn't change, can you talk about how you're thinking about Q4 in the context of, you know, some of the dilution that you cited at Timmins, El Peñón, some of the development delays you cited at Minera Florida? I'm just trying to get a sense of kind of the confidence in Q4 on the gold side. Thanks.

Speaker #4: Thanks .

Speaker #5: Yeah . Good morning , Scott Campbell here . We had our challenges certainly in Q3 , but we're maintaining the guidance for for Q4 .

Scott Campbell: Yes. Good morning, Scott Campbell here. We had our challenges certainly in Q3, but we're maintaining the guidance for Q4, and we're confident that that will be achieved. We did have some dilution in Penon, and we had some challenges and slight delays when it comes to ground support at both of our mines in Chile. We're maintaining guidance and things in November have already started to look up for gold production in the southern countries.

Speaker #5: And we're confident that that will be achieved . We did have some dilution in pinyon , and we had some challenges and slight delays when it comes to ground support at both of our mines in Chile .

Speaker #5: But we're maintaining guidance and things in November have already started to look up for for gold production in the southern countries .

Speaker #4: Okay . And then maybe just switching gears to the the updated development approach that LA Colorado Skarn just you in the opening remarks , you talked about the partnership discussions .

Fahad Tariq: Okay. Maybe just switching gears to the updated development approach at La Colorada Skarn. Just you in the opening remarks, you talked about the partnership discussions are well advanced. Maybe just any detail you can provide would be helpful. Thanks.

Speaker #4: Are well , advanced . Maybe just any detail you can provide would be helpful . Thanks .

Speaker #1: Yeah .

Speaker #6: Good morning . Look , it's a bit well , the discussions are very advanced , but it's too early to share them . I hear publicly , you know , it's looking very interesting .

Michael Steinmann: Yeah. Good morning. Well, the discussions are very advanced, but it's too early to share them here publicly. You know, it's looking very interesting. I think that new approach, which we had an eye on obviously for a long time to see how we can advance the really high grade part of our skarn ore bodies. If you recall, we published a few press releases over the last couple of years with some very impressive long, very wide high grade intercepts of, in two of the three skarn ore bodies that we discovered. Really the discovery of those high grade structures in addition that we found during 2025, and we published in September, and increased our resource there by, I think about 53 million ounces already.

Speaker #6: I think that new approach , which we had an eye on obviously for a long time to see how we can advance the really high grade part of our , our bodies here .

Speaker #6: Recall we published a few press releases over the last couple of years with some very impressive long , very wide , high grade intercepts of in two of the three corner bodies that we discovered .

Speaker #6: Really , the discovery of those high grade structures . In addition , that we found during 2025 . And we published in September and increased our resource there by I think , about 53,000,000oz already .

Michael Steinmann: Really the discovery of those high grade structures in addition that we found during 2025, and we published in September, and increased our resource there by, I think about 53 million ounces already. Really that combination of that high grade discovery close to surface together with the high grade wide intercepts of the core part of the skarn really allow us to go to this phased approach and look forward here to two phases.

Speaker #6: Really , that combination of that high grade discovery close to together with the high surface , grade wide intersects of the core part of the Skarn , really allow us to go to this phased approach and look forward here two phases to .

Michael Steinmann: Really that combination of that high grade discovery close to surface together with the high grade wide intercepts of the core part of the skarn really allow us to go to this phased approach and look forward here to two phases. As we said, a smaller tonnages will still be an impressive mine. Very similar silver output than the original plan we had envisioned, obviously higher grade, less tonnage, less capital, and then go to the larger cave mine later on in time. Very interesting advances.

Speaker #6: As we said , a smaller tonnage will still be an impressive mine , very similar silver output than than the plan . We original had in vision .

Michael Steinmann: As we said, a smaller tonnages will still be an impressive mine. Very similar silver output than the original plan we had envisioned, obviously higher grade, less tonnage, less capital, and then go to the larger cave mine later on in time. Very interesting advances. As we indicated, we will come out with the PEA in Q2 next year. Very positive advance on La Colorada, and you know, looking forward here to look at those partnership agreement, and involve a, you know, a very strong partner for this really exciting project as well.

Speaker #6: But obviously higher grade , less tonnage , less capital and then go to the larger cave mine later on in time . So very interesting advances .

Speaker #6: As we indicated , we'll come out with a PA in Q2 next year , but very positive advance on on La Colorada and you know , looking forward here to look at at those partnership agreement and involve , you know , a very strong partner for , for this very exciting project as well .

Michael Steinmann: As we indicated, we will come out with the PEA in Q2 next year. Very positive advance on La Colorada, and you know, looking forward here to look at those partnership agreement, and involve a, you know, a very strong partner for this really exciting project as well.

Speaker #4: Okay , great . And then maybe just lastly , is it fair to say that the partner would only be really for phase two ?

Fahad Tariq: Okay, great. Maybe just lastly, is it fair to say that the partner would only be really for phase II, or are you envisioning them also contributing to the CapEx and being involved in phase I? Thanks.

Speaker #4: Or are you envisioning them also contributing to the CapEx and being involved in phase one ? Thanks .

Speaker #6: I could very well envision a phased approach there too , with with , you know , more reduced partnership in option one and a larger one in phase two .

Michael Steinmann: I could very well envision a phased approach there too, with a, you know, more reduced partnership option in phase one and a larger one in phase two, but that still remains to be determined.

Speaker #6: But that still remains to be determined .

Speaker #4: Thank you Okay . .

Fahad Tariq: Okay. Thank you.

Speaker #3: The next question is from John Tumazos with John Tumazos , very independent research . Please go ahead .

Operator: The next question is from John Tomaso with John Tumazos Very Independent Research. Please go ahead.

Speaker #1: Thank you .

Speaker #7: For taking my question . We know that you produce a little bit of base metals to and a large differential exists with zinc at $1.44 and lead at $0.93 .

John Tomaso: Thank you for taking my question. We know that you produce a little bit of base metals, too. A large differential exists with zinc at $1.44 and lead at $0.93. Why do you think the zinc price outperforms where world steel output is down 2% this year? Why do you think lead lags when world auto output is strong, China trending toward 33 million cars record, et cetera?

John Tumazos: Thank you for taking my question. We know that you produce a little bit of base metals, too. A large differential exists with zinc at $1.44 and lead at $0.93. Why do you think the zinc price outperforms where world steel output is down 2% this year? Why do you think lead lags when world auto output is strong, China trending toward 33 million cars record, et cetera?

Speaker #7: you Why do think the zinc price outperforms where world steel output is down a couple percent this year ? And why do you think lead lags when World Auto output is strong ?

Speaker #7: China trending toward 33 million cars record , etc. .

Speaker #6: Yeah . Good morning John . Look obviously the base metals . And by the way , I think at the moment only about 8% of our revenue , that will for sure increase once we have the others gone in production .

Michael Steinmann: Yeah. Good morning, John. Look, obviously the base metals, and by the way, it's I think at the moment only about 8% of our revenue. That will for sure increase once we have the La Colorada Skarn in production. It's a small part of our revenue. When you look at the base metal, I'm sure zinc is pushed and outperforming as being included in several countries in their list of critical minerals. By the way, I'm sure you have noticed that silver got included in the US as well on that list. But as you know, the base metal prices really reflect the outlook on the world economy and where that's moving.

Speaker #6: But it's a small part of our revenue . When you look at the base I'm metal , sure zinc is posted outperforming as being included in several countries in their list of critical minerals .

Speaker #6: way , By the I'm sure you have noticed that silver got included in the US as well on that list . But as you know , the base metal price is really reflect the outlook on the world economy and where that's moving .

Michael Steinmann: But as you know, the base metal prices really reflect the outlook on the world economy and where that's moving. I guess there are still some people worried about where this is going over the next few years, and that's reflected in those prices. For sure, you know, the inclusion of zinc in critical minerals helps the price.

Speaker #6: And I guess there's still some some people worried about where this is going over the next few years . And that's in reflected those prices .

Michael Steinmann: I guess there are still some people worried about where this is going over the next few years, and that's reflected in those prices. For sure, you know, the inclusion of zinc in critical minerals helps the price.

Speaker #6: But for sure , the , you know , the inclusion of zinc and critical minerals helped helps the price .

Speaker #7: Thank you .

John Tomaso: Thank you.

John Tumazos: Thank you.

Speaker #3: The next question is from Habib with Scotiabank . Please go ahead .

Operator: The next question is from Ovais Habib with Scotiabank. Please go ahead.

Speaker #8: Thank you . Operator . Hi , Michael . And Pan American team . Congrats on a good quarter leading to a good free cash flow as well .

Ovais Habib: Thank you, operator. Hi, Michael and Pan American team. Congrats on a good quarter, leading to a good free cash flow as well. Scott, congrats to you on your new appointment as well. Michael, a lot of my questions have already been answered, but some follow-ups to those questions. Starting off with, you know, the question on Cerro Moro, El Penon, Timmins, and I think Florida as well. Obviously, they've had some issues in terms of reconciliation, geotech issues. Do you see these issues lingering into Q4, or have most of these issues now been resolved? Just clarify on that front.

Speaker #8: Scott , congrats to you on your new appointment as well . Michael , a lot of my questions have already been answered , but some follow ups to those questions starting off with , you know , the question on .

Speaker #8: Timmins and I think Florida as well , obviously , they've had some issues in terms of reconciliation , geotech issues . Do you see these issues lingering into Q4 or have most of these issues now been resolved ?

Speaker #8: Just a clarify on that front

Speaker #8: .

Speaker #6: morning . Yeah . Good Always . And you recall in Q2 and actually there was some of those technical issues started with already mentioned that they , you know , will linger into Q3 , which we see .

Michael Steinmann: Good morning, Awais. You recall in Q2 and actually, though some of those technical issues started, we already, you know, mentioned that they will linger into Q3, which we see. That's obviously the reason why our production profile, especially on the gold, is more back-end loaded. As, as Scott mentioned, we see already an uptick on, on those grades. You know, looking forward to meet those guidance goals that we have. Maybe, Scott, you want to add a bit more color to this?

Speaker #6: So that's obviously the reason why our production profile , especially on the gold , is more back end loaded as as Scott mentioned , we see already an uptick on those grades .

Speaker #6: So , you know , looking forward to meet to meet those guidance goals that we have or maybe Scott , you want to add a bit more color .

Speaker #5: To this . Well , thanks . Thanks for the kind , sincere words regarding Timmins . Some of the issues , some of the geotechnical challenges we have involve the the squeezing of our production drill holes in the deep central mining zone at the Bell Creek operation .

Scott Campbell: Yeah. Sure. Thanks for the kind and sincere words. Regarding Timmins, some of the issues, some of the geotechnical challenges we have involve the squeezing of our production drill holes in the deep central mining zone at the Bell Creek operation. We've been mitigating that through the use of casings, PVC casings, and in some cases, we use a sealant or a polymer, and we've had some success with that. We're also installing additional ground support in development headings as we pass through high strain and stress areas, using dynamic support. The paste backfill system at Bell Creek recently commissioned is also, you know, becoming more and more utilized. We're getting better utilization, and the learning curve is really flattened out on that facility.

Speaker #5: We've been mitigating that through the use of casings , PVC casings and in some , some cases , we use a sealant or a polymer .

Speaker #5: And we've had some success with that . We're also installing additional ground support in developing development headings as we pass through high strain and stress areas using dynamic support .

Scott Campbell: We're also installing additional ground support in development headings as we pass through high strain and stress areas, using dynamic support. The paste backfill system at Bell Creek recently commissioned is also, you know, becoming more and more utilized. We're getting better utilization, and the learning curve is really flattened out on that facility. We're seeing a lot of success. Again, the numbers are looking favorable as we head into November, sort of halfway through Q4.

Speaker #5: The actual system at Bell Creek recently commissioned , is also , you know , becoming more and more utilized . We're getting better utilization in the learning curve is is really flattened out on that on that facility .

Speaker #5: And so we're getting some we're seeing a lot of success . And again the numbers are looking favorable as we head into November sort of halfway through Q4 .

Scott Campbell: We're seeing a lot of success. Again, the numbers are looking favorable as we head into November, sort of halfway through Q4.

Speaker #8: Thanks for that , Scott . And just going into 2026 , I mean , is this more in terms of , you know , getting obviously getting ahead of production and developing , accelerating development going into 2026 ?

Ovais Habib: Thanks for that, Scott. Just going into 2026, I mean, is this more in terms of, you know, getting, obviously getting ahead of production and developing and accelerating development going into 2026?

Speaker #5: Yes , generally , At yes . several of our operations , we've initiated additional development programs in Q4 to really give us more optionality as we head into 2026 .

Scott Campbell: Yes. Generally, yes. At several of our operations, we've initiated additional development programs in Q4 to really give us more optionality as we head into 2026. you know, in a, in a couple of cases, we got behind in our development, so we had to acquire new equipment, in some cases, hire external third-party contractors to do that. we're on and Tim is included. yes, it's all in our best interest to really ensure our success coming up and later in, sort of at the end of 2025 and really into 2026.

Speaker #5: You know , in a couple of cases , we got behind on our development . So we had to acquire new equipment in some cases hired external third party contractors to do that .

Speaker #5: We're on . is And Tim included . But yes , it's all in our best interest to really ensure our success coming up in later .

Speaker #5: And at the end of 2025 and really into 2026 .

Speaker #8: Yeah , thanks . Thanks for that . Scott . And then just moving on to , you know , on the closing of the Mag transaction , Michael , is everything progressing according to your expectations ?

Ovais Habib: Yeah. Thanks. Thanks for that, Scott. Just moving on to, you know, Juanicipio on the closing of the MAG transaction. Michael, is everything progressing according to your expectations? I mean, are you looking, you know, how involved are you with operations and is there a push to get more exploration started around the area?

Speaker #8: I mean , are you looking you know , how involved are you with operations and is there a push to get more exploration started ?

Speaker #8: Area .

Speaker #6: You know , I'm incredibly happy where it stands . I think , you know , we all saw a glimpse here , what 20 Scipio will do for us with only one month in Q3 .

Michael Steinmann: Yeah. I'm incredibly happy where it stands. I think, you know, we all saw a glimpse here what Juanicipio will do for us with only 1 month in Q3. You see just, you know, the strong production, strong cash flow coming out of that operation. You can imagine that even higher metal prices right now, how well that asset is doing. Actually, I was just there, like, last week. It's just, again, an impressive operation. You know, a lot of involvement on the operational teams here on all levels, really from operation to metallurgy, to geology, to exploration. A lot of exploration going on as well. I'm really happy how this has worked out so far.

Speaker #6: And you see just , you know , the strong production , strong cash coming out flow of that operation , you can imagine that even higher metal prices well right now , how asset is doing .

Speaker #6: Actually , I was just like last week and it's just , again , an impressive , impressive operation . And and , a lot , lot of involvement , involvement on the operational teams here and on all levels really from operation to metallurgy to , to , to geology to exploration .

Speaker #6: A lot of exploration going on as well . So I'm really , really happy how this has worked out so far . I'm really looking forward to see a full quarter of Scipio in Q4 .

Michael Steinmann: I'm really looking forward to see a full quarter of Juanicipio, in Q4, as I said, with a combination of very favorable metal prices, as well. Obviously, we come out in early January or mid-January, normally mid to late of January with the forecast for next year, which will include also our, in our budget, our exploration spending. You will see all the details, then, Awais, how it looks like for the production profile. Yeah, it's, I would say it's, at least met or quite a bit exceeded my expectations at Juanicipio.

Speaker #6: As I said , with a combination of favorable very metal prices as well . Obviously we come out in early January , mid January , mid to normally late January with the forecast for next year , which will include also our in our budget , our exploration spending .

Speaker #6: you will see So all the details of how it looks like for the production profile . But yeah , it's I would guess it's I would say it's at least met or quite a bit exceeded my , my expectations at 20 CPM .

Speaker #8: Yeah , thanks for that Michael . And my last question is on Skarn you're looking to announce the in Q2 of next year .

Ovais Habib: Yeah. Thanks for that, Michael Steinmann. My like last question is on La Colorada Skarn. You're looking to announce the PEA in Q2 of next year. Is the announcement of the partnership exclusive of this event, or you will need to see the PEA before you can come to some term, sort of terms with the partner?

Speaker #8: Is the of the partnership exclusive of this event or you would need to see the PA before you kind of come to some sort of terms with the partner ?

Speaker #6: No , I think we will be able to announce the partnership earlier . I think as soon as we have a document executed on that , we will we will release that information .

Michael Steinmann: No, I think we will be able to announce the partnership earlier. I think as soon as we have a document executed on that, we will release that information.

Speaker #8: Okay . Thanks . for me , That's it Michael , and thanks for taking my questions .

Speaker #6: Thanks always .

Ovais Habib: Okay. Thanks. That's it for me, Michael, and thanks for taking my questions.

Speaker #3: The next is from Cosmos Chiu with CIBC . Please go ahead .

Michael Steinmann: Thanks, Awais.

Operator: The next question is from Cosmos Chiu with CIBC. Please go ahead.

Speaker #9: Thanks , Michael . And thank you , Steve as well . And congratulations Scott . Maybe my first question is also on technical report .

Cosmos Chiu: Thanks, Michael. Thank you, Steve, as well, and congratulations, Scott. Maybe my first question is also on the Skarn technical report that's potentially coming out next year. Or not potentially, it is coming out next year. As you mentioned, Michael, you take a phased approach now with a higher grade, lower tonnage deposit up front. I seem to remember the Skarn deposit is centered around some high-grade centers, the 901 zone, 902, 903. Is there one particular zone that is higher grade? I don't know if you have that answer yet. Are we looking at, you know, higher grade portions from all three areas? Are we looking at the upper portions of all three areas?

Speaker #9: That's potentially coming out next year. Or not potentially. It is coming out next year, as you mentioned, Michael. You got to take a phased approach.

Speaker #9: Now with a higher grade . The lower tonnage deposit out front , I seem to remember the scarring deposit is centered around some high grade centers .

Speaker #9: The 901 zone , 902 , 903 . So is there one particular zone that is higher grade ? I don't know if you have that answer yet .

Speaker #9: Or are we looking at , you higher grade portions from all three areas , or are we looking at the upper portions of all three areas ?

Cosmos Chiu: Are we looking at, you know, higher grade portions from all three areas? Are we looking at the upper portions of all three areas? How should we incorporate what I know about 901, 902, and 903 into what we can see next year?

Speaker #9: How should we incorporate what I know about 901902 and 903 into what we can see next year ?

Cosmos Chiu: How should we incorporate what I know about 901, 902, and 903 into what we can see next year?

Speaker #6: Yeah . Cosmos , the higher grade high core zones are mostly 901 and 902 . We are actually doing quite a bit of drilling .

Michael Steinmann: Yeah, Cosmos, the high grade core zones are mostly 901 and 902. We are actually doing quite a bit of drilling still on 903 and had some pretty interesting success here of where the current seems to even further extend by quite a good distance. I think on 903 it's still out there to see if there is a high grade zone there as well. When you look at the press releases we put out over the last 2 years on those high grade intercepts of the skarn, they're all of them located in 901 and 902. As I said, it's really the combination together with those high grade closer to surface structures that we published in September.

Speaker #6: Still on 903 and some some pretty interesting success here , seems to but as current even further extend quite a good distance . by by So I think on 903 it's still out there to see if there is a high grade zone there as well .

Speaker #6: But when you look at the press releases we put out over the last two years on those high grade intercepts of the skarn , they're , there , all of them in 901 and 902 .

Speaker #6: But located as I said , it's really the combination together with those high grade closer to surface structures that we published in September .

Speaker #6: And then , you know , after that showed in a big increase in resources with our reserve and resource update . It's that really combination that allowed this us phased approach , as you can imagine , we were trying for a phased the beginning on it , but approach from obviously , obviously way stronger project .

Michael Steinmann: And then, you know, after that showed in a big increase in resources with our reserve and resource update. It's really that combination that allowed us this phased approach. As you can imagine, we were trying for a phased approach from the beginning on it, but it's obviously a very strong project if you can do it in a phased approach. Less capital upfront and increase later when you really understand an underground and you know the ore body well. As I said earlier on, that doesn't mean that our production profile of silver will be much lower than what we had envisioned in the full large cave option. There's less execution risk, less capital, probably faster in bringing the project on. Overall, just an exciting development at La Colorada Skarn.

Speaker #6: If you can in a phased do it Last approach . capital upfront and increase later when you really understand and on the ground and you know the body and as well , I said earlier on , that doesn't mean our production that silver profile of lower than what we had envisioned in the full , large cave So option .

Michael Steinmann: As I said earlier on, that doesn't mean that our production profile of silver will be much lower than what we had envisioned in the full large cave option. There's less execution risk, less capital, probably faster in bringing the project on. Overall, just an exciting development at La Colorada Skarn.

Speaker #6: there's less execution less risk , capital , probably faster in bringing the project on . And overall just , just just an exciting development that has gone

Speaker #6: .

Speaker #9: Yeah , sounds that great . Maybe a follow up then , know , Michael , you as you , with this phased mentioned approach possibility is that the vein , the mine could run parallel with both phases .

Cosmos Chiu: Yeah, that sounds great. Maybe a follow-up then. You know, Michael, as you mentioned, with this phased approach, the possibility is that the vein mine could run parallel with both skarn phases. Is there some thinking in terms of some of that ore from the skarn could actually go through the current mill?

Speaker #9: So is there some thinking in terms of some of that from the scoring could actually go through the current mill ?

Speaker #6: No , no . The current production capacity is around 2000 2500 tons a day . I mean , we're talking here a about multiple of that .

Michael Steinmann: No, no. The current production, mill capacity is around 2,500 tons a day.

Speaker #6: So we will build a new mill, much larger, and then we will have a mill built with the potential to expand down the road to phase two, which will be way bigger.

Cosmos Chiu: Yeah.

Michael Steinmann: I mean, we're talking here about a multiple of that. We will build a new mill much larger. Have that mill built with the potential to expand down the road way bigger to phase 2. Yeah, the current operation, the current mill is too small. The metallurgy is very similar. Of the mineralization of the skarn and the veins. It's a easy project really for us to. Commingle the veins and the skarn and put that through the same mill. It's not a metallurgical difference, it's just the current mill is too small for that.

Speaker #6: But yeah , the current operation , the current mill is too small , the is metallurgy very , very but similar . Optimization of the the vein .

Speaker #6: skarn and So it's a easy project really for us to , to kind of commingle the and , veins and the scan and put that through the same mill .

Michael Steinmann: of the mineralization of the skarn and the veins. It's a easy project really for us to.

Speaker #6: So it's not a metallurgical difference , it's just the current mill is too small for that .

Michael Steinmann: commingle the veins and the skarn and put that through the same mill. It's not a metallurgical difference, it's just the current mill is too small for that.

Speaker #9: Okay , okay . Sounds good . So it's going to be a new mill from day one for the scarring . But it could still run in parallel with a potential expansion later on .

Cosmos Chiu: Okay. Okay, sounds good. It's gonna be a new mill from day one for the Skarn, but it could still run in parallel with a potential expansion later on. Cool.

Cosmos Chiu: Okay, sounds good. It's gonna be a new mill from day one for the Skarn, but it could still run in parallel with a potential expansion later on. Cool.

Speaker #6: that's really , Yeah , the exciting , exciting advance here . Is that obviously putting the cave mining a bit later allows us to to continue to mine those high grade veins , which it seems like with the exploration , we keep finding more and more of it .

Michael Steinmann: Yeah. That's really, you know, the exciting advance here is that obviously putting the cave mining a bit later allows us to continue to mine those high grade veins, of which it seems like with the exploration we keep finding more and more of it.

Speaker #9: Yeah, maybe I do apologize. I do have a long accounting question here. I just wanted to get a better understanding of the equity method for accounting. I was looking for Scipio.

Cosmos Chiu: Maybe, I do apologize, I do have a long accounting question here. I just wanted to get a better understanding of the equity method of accounting for Juanicipio. I was looking at note number nine, and I could kind of follow through. My understanding is that it's 44% of what Juanicipio reports 100%. I can understand the $72 million in revenue, $11.9 million in production costs, $15.1 million in depreciation, $45.1 in mine operating earnings. It jumps to $37.1 million in net income and comprehensive income, and that's a gap that I don't really fully understand, which drives the $16 million pickup for Pan American Silver at a consolidated level. Could you maybe help me out in terms of that little gap?

Speaker #9: At note number nine, and I could kind of follow through. My understanding is that it's 44% of what Scipio reports: 100%.

Speaker #9: So I can understand the $72 million in revenue . $11.9 million in production costs , $15.1 million in depreciation . So 45.1 in mine operating earnings .

Speaker #9: But then it jumps to $37.1 million in net income . And comprehensive income . And that's a gap that I don't really fully understand , which drives the $16 million pickup for for Pan American Silver , the consolidated level .

Cosmos Chiu: It jumps to $37.1 million in net income and comprehensive income, and that's a gap that I don't really fully understand, which drives the $16 million pickup for Pan American Silver at a consolidated level. Could you maybe help me out in terms of that little gap?

Speaker #9: So could you maybe help me out in terms of that little gap ?

Speaker #6: Hey, cosmos, with.

Speaker #10: Ignacio here . And if you want , we can take this offline as Hi . Yes , want , we can take this yeah .

Ignacio Couturier: Hey, Cosmos. It's Ignacio here.

Speaker #10: offline because there's a lot of detail , but basically If you we in , you know , this is the , the reporting requirements are don't require us to don't put all the detail in there .

Cosmos Chiu: Hi, Ignacio.

Ignacio Couturier: we can take this offline as well. Hi.

Cosmos Chiu: Hi, Ignacio.

Ignacio Couturier: we can take this offline as well. Hi.

Cosmos Chiu: Yes.

Ignacio Couturier: Yeah, if you want, we can take this offline because there's a lot of detail. Basically, you know, The reporting requirements are. Don't require us to put all the detail in there, but some of the lines that are missing are taxes and other items that are material.

Speaker #10: But some of the lines that are missing are taxes and other and other items that are , that are material . But yeah , basically there's a whole bunch of other stuff there that's not included in in the net the income .

Speaker #10: And comprehensive income .

Cosmos Chiu: Yeah

Ignacio Couturier: Yeah, basically there's a whole bunch of other stuff there that's not included in the net income.

Cosmos Chiu: Yeah

Ignacio Couturier: Yeah, basically there's a whole bunch of other stuff there that's not included in the net income.

Speaker #9: So I work it out to about 18% . Is that a good number to kind of use in terms of difference that or each quarter is a bit different .

Cosmos Chiu: I work-

Ignacio Couturier: and comprehensive income.

Cosmos Chiu: I work it out to about 18%. Is that a good number to kinda use in terms of that difference, or each quarter's a bit different?

Speaker #10: I think . Let's give it a couple quarters here because , you know , this is only one month of of I would say results .

Speaker #10: let's So see . Let's see what the next quarter looks like . And as I said , I'm happy to take this offline with you .

Ignacio Couturier: I think let's give it a couple of quarters here, because, you know, this is only 1 month of results. I would say let's see what the next quarter looks like. As I said, I'm happy to take this offline with you. We can.

Speaker #10: And we can, of course, talk a little about some of.

Speaker #10: bit

Speaker #9: The

Speaker #9: Ignacio before asking stuff that the question . So I about knew it'd be a little complicated . Any other accounting nuances that we should be aware of in terms of Scipio ?

Cosmos Chiu: Of course.

Ignacio Couturier: We can talk a little bit about.

Cosmos Chiu: Yeah

Ignacio Couturier: about some of the stuff.

Cosmos Chiu: Yeah

Ignacio Couturier: about some of the stuff.

Cosmos Chiu: I did apologize.

Ignacio Couturier: that you're asking.

Cosmos Chiu: Ignacio before asking the question, I knew it'd be another one to allocate it. Any other accounting nuances that we should be aware of in terms of Juanicipio?

Speaker #10: No , I would say I would say , look , this is the same method that mag used to report on Scipio . And yeah , it's a little bit we tricky because haven't had this before and it is difficult to talk about the company performance .

Ignacio Couturier: No, I would say, look, this is the same method that MAG used to report Juanicipio. Yeah, it's a little bit tricky because we haven't had this before, and it is difficult to talk about the company performance now given that the performance of Juanicipio is buried into that equity line or the investment in Juanicipio line, both in the income statement and in the balance sheet. We've introduced a few new non-GAAP metrics, including attributable revenue, attributable free cash flow, and attributable operating cash flow to help us better understand and talk about the company performance, including Juanicipio.

Speaker #10: Now , given that the performance of Quantum Leap is buried into that equity , or the investment in quantum CPU line , both in the income the statement and in the and the balance sheet .

Speaker #10: So we've introduced a few new non-GAAP metrics , including attributable revenue free cash flow and operating attributable cash flow us to help better and talk about the company performance , including Juan Ekpo .

Speaker #10: And another thing to keep is in mind really the cash from Juan Scipio doesn't . That's sitting at the JV level , is buried in the interest in Juan Scipio , investment in line in our balance sheet that only once Juan CPO JV distributes will that cash dividends in appear in our the in the cash and cash and cash equivalent lines in our balance sheet

Cosmos Chiu: Great.

Ignacio Couturier: Another thing to keep in mind is really the cash from Juanicipio that's sitting at the JV level is buried in the interest in Juanicipio or investment in Juanicipio line in our balance sheet. Only once, Juanicipio JV distributes dividends, will that cash appear in our cash and cash equivalent lines in our balance sheet.

Ignacio Couturier: Only once, Juanicipio JV distributes dividends, will that cash appear in our cash and cash equivalent lines in our balance sheet.

Speaker #9: And

Speaker #9: cash that distribution is somewhat . discretionary , correct ?

Cosmos Chiu: That cash distribution is somewhat discretionary, correct?

Speaker #10: Yeah . No , they're on a schedule given the transition between Mag and ourselves . It's been a little bit delayed . So it's been a couple quarters since .

Steve Busby: Yeah. No, they're on the schedule. Given the transition between MAG and ourselves, it's been a little bit delayed. It's been a couple quarters since the JV has not issued dividends. There should be a catch-up in Q4 on that.

Speaker #10: haven't They since the JV has not issued dividends . But there should be a catch up in that Q4 on .

Speaker #9: Okay . Great then . maybe And lastly on the dividend . Great to you've see that increased it again the second in terms consecutive quarter of the increase .

Cosmos Chiu: Okay, great. Maybe lastly on the dividend, great to see that you've increased it again the second consecutive quarter in terms of the increase. In terms of the calculation, the $0.14 is a bit of a detour away from the matrix that you've given to us in the past in terms of dividend based on net cash. I guess my question is how should we, not predict, but what should we expect for, you know, the next quarter? That's number one. Number two, how much of the fact that you were not able to use your NCIB in Q3, did that factor into you know, increasing on a discretionary basis, your dividend in Q3? Will you use the NCIB again in the future?

Speaker #9: But in terms of the calculation of $0.14 is a bit of a detour away the from matrix that you've given to us in the past in terms of dividend , based on net cash .

Speaker #9: So I guess my question is: how should we not predict, but what should we expect for the next quarter? That's number one.

Speaker #9: And number two , how much of the fact that you were not able to use your NCIB in Q3 did that factor into you ?

Speaker #9: You know, increasing on a discretionary basis your dividend in Q3? And will you use the NCIB again in the future?

Speaker #6: Yes . Look , regarding the dividend , great news . And that's really it is a kind of a departure from our dividend policy for this quarter .

Michael Steinmann: Yes. Look, regarding the dividends, great news, that's really it. It's kind of a departure from our dividend policy for this quarter and this quarter only. The reason for it is a very simple one. Very strong cash flow generation. You see, you know, we nearly or recovered already large part of the $500 million debt that we used, you know, the cash portion that we used for the acquisition of MAG. It was the board's view that with this incredible strong cash flow generation, it's just the right thing to depart from the dividend policy for one quarter and have the shareholders participate in that a bit earlier. It has nothing to do with, you know, the blackout we were in until the transaction closed on the NCIB.

Speaker #6: And this quarter only . And the reason for it is very simple . One , very strong cash flow generation . You see , you know , nearly a already large part of the $500 million that that used we .

Speaker #6: You know , the cash portion for the acquisition of that we use Mac . it was board's the view that with So this incredibly strong cash flow generation , it's just the right thing to depart from the dividend policy for one quarter and half .

Michael Steinmann: It was the board's view that with this incredible strong cash flow generation, it's just the right thing to depart from the dividend policy for one quarter and have the shareholders participate in that a bit earlier. It has nothing to do with, you know, the blackout we were in until the transaction closed on the NCIB.

Speaker #6: The shareholders participated in that a bit earlier. It has nothing to do with, you know, the blackout we were in until the transaction closed on the NCIB.

Speaker #6: We will obviously look again at NCIB from now on. And like before, you know, make sure to make purchases in an opportunistic way so that that is not the reason for the increase. The reason for the increase is that we look at our cash forecast.

Michael Steinmann: We will obviously look again at the NCIB from now on and like before, you know, make share purchases on an opportunistic way. That is not the reason for the increase. The reason for the increase is that we look at our cash forecast, we look at a strong Q4, and, you know, it was just the right thing to have our shareholders to participate a bit earlier in that really strong quarter.

Speaker #6: We look at a strong Q4 and , you know , that was just the right thing to have our shareholders to participate a earlier in that really very bit strong quarter .

Speaker #9: Thanks , Michael . I agree well . Those are as the questions I have . Congrats again on a very good Q3 and I look rest forward to the of 2025 .

Cosmos Chiu: Thanks, Michael. I agree as well. Those are all the questions I have. Congrats again on a very good Q3, and I look forward to the rest of 2025.

Speaker #6: Thank you .

Speaker #3: next The from DeMarco with Don National Bank . Please go ahead .

Michael Steinmann: Thank you.

Speaker #11: Thank you . Operator . And good morning , Michael and team , thanks for taking my questions . First off , you know , we saw consolidated ASIC guidance lowered substantially .

Operator: The next question is from Don DeMarco with National Bank. Please go ahead.

Don DeMarco: Oh, thank you, operator. Good morning, Michael and team. Thanks for taking my questions. First off, you know, we saw consolidated AISC guidance lowered substantially. Was there any other contributors to this other than the addition of Juanicipio?

Speaker #11: there any other Was contributors to this other than the addition of one of Scipio ?

Speaker #6: Now it's it's the strong impact of CP . I mean , we will be on track with what we had our in original guidance , like we are on the gold side , but as we , you as know , alluded to when we when we announced the transaction that this transaction will have a meaningful positive impact to our cash cost on the silver side .

Michael Steinmann: No, it's the strong impact of Juanicipio. I mean, we would be on track with what we had in our original guidance like we are on the gold side. As we, you know, alluded to when we announced the transaction, that this transaction will have a meaningful positive impact to our cash costs on the silver side. That's really the result that you're seeing. Only with one month on it, you already see the result. You know, calculating in the advantage of having Juanicipio for a full quarter in Q4 led us to the lower guidance on our costs.

Speaker #6: And that's really the result that you've seen on the , on the with one month on it , you already see that result .

Speaker #6: And you and know , calculating in the , the advantage of having CP for a full quarter in Q4 led us to the to the lower guidance on our costs .

Speaker #1: Yeah , I was just going to add , Don , this is Steve , just to a lesser extent . We are enjoying the benefit of the higher gold prices as well relative to what we use for guidance .

Steve Busby: Yeah. I was just gonna add, Don, this is Steve. Just to a lesser extent, we are enjoying the benefit of the higher gold prices as well relative to what we use for guidance. That is helping to offset some of the cost increases we're seeing.

Speaker #1: So that is helping to offset some of the cost increases we're seeing . Is that byproduct gold price .

Speaker #6: And just to remind everybody again , I say that probably every every call , there's a lot of factors . Important factors on our cost that can be tailwinds or headwinds that are out of our control .

Don DeMarco: Okay

Steve Busby: is that byproduct gold price.

Michael Steinmann: Just to remind everybody again, I say that probably every call, there's a lot of factors, important factors on our cost, like there can be tailwinds or headwinds that are out of our control, and one is exchange rates. Of course, when the US dollar declines, normally our local currency increase, and that automatically is a headwind on our cost. As the added benefit with the lower dollar that we see higher precious metal prices. That's kind of the, you know, the system how it plays. When we see a strong dollar, we see pressure on the metal price, but we see a tailwind on our costs in local currencies and vice versa. Just keep always in mind that exchange rates.

Speaker #6: And one is exchange rates . Of course , when the US dollar declines , normally our local currency increase and that automatically is a headwind on our cost .

Speaker #6: But as the added benefit with a lower dollar that we see higher precious metal prices . So that's kind of the , you know , the system , how it plays when we see a strong dollar , we see pressure on the metal price , but we see a tailwind on our costs in local currencies and vice versa .

Speaker #6: So just keep always in mind that exchange rates are an important part of this as well .

Speaker #11: Okay. Thank you for that. And Monero, Florida, and we look at Timmins. Costs elevated in the area a bit, of course, quarter.

Don DeMarco: Yeah

Michael Steinmann: are an important part to this as well.

Speaker #11: But margins are still good. Do you have any performance criteria to potentially identify candidates for divestment? Can you walk us through your potential divestment pecking order?

Don DeMarco: Okay. Thank you for that. You know, we look at Minera Florida and Timmins costs are a bit elevated in the quarter, but of course the margins are still good. Do you have any performance criteria to identify potential divestment candidates? Can you walk us through your potential divestment pecking order?

Speaker #6: Look , I mean , we are we we did a lot of divestments over the last few years . You probably saw we divested a project in Chile as well for 40 million cash in the quarter .

Michael Steinmann: Look, I mean, we did a lot of divestments over the last few years, you probably saw. We divested a project in Chile, La Pepa as well, for $40 million cash in the quarter. There's quite a few other smaller projects that are in the pipeline in the works right now by our business development team. I'm pretty happy with what we have right now on our operational side in our portfolio. I'll, you know, looking forward to continuing with those assets.

Speaker #6: And there's quite a few other smaller projects are that in the pipeline in the works right now by our business development team . I'm pretty happy with what we have right now and our operational side in our portfolio .

Speaker #6: So, you know, looking forward to continuing with those assets.

Speaker #11: Okay . And then on the flip that , after side of Mag and previously the Amana acquisition , what's a good long term silver or gold production level that you'd like to achieve or maintain .

Don DeMarco: Okay. Then on the flip side of that, you know, after MAG and previously the Yamana acquisition, what's a good long-term silver or gold production level that you'd like to achieve or maintain?

Speaker #6: I think we need see the final budget on on the site before I answer that question . can As you can imagine , it's a very large and important part of our of our silver production going forward .

Michael Steinmann: I think we need to see the final budget on the Juanicipio side before I can answer that question. As you can imagine, it's a very large and important part of our silver production going forward here.

Speaker #6: Here .

Speaker #11: Okay , great . Well , we'll keep an guidance eye out for next year on that . Then . That's all for me .

Speaker #11: Thanks for taking my questions and good luck for the of the quarter .

Don DeMarco: Okay, great. Well, we'll keep an eye out for guidance next year on that then.

Speaker #6: Thank you .

Michael Steinmann: Excellent.

Don DeMarco: That's all for me. Thanks for taking my questions, and good luck with the rest of the quarter.

Speaker #3: This concludes the question and answer session. I'd like to turn the conference back over to Michael Steinmann for any closing remarks.

Michael Steinmann: Thank you.

Operator: This concludes the question and answer session. I'd like to turn the conference back over to Michael Steinmann for any closing remarks.

Speaker #6: Thank you, Operator. Everyone, and thanks for calling in. Another great quarter: record revenue of nearly $890 million and record operational cash flows of $323 million.

Michael Steinmann: Thank you, operator, and thanks everyone for calling in. Another great quarter. Record revenue of nearly $890 million. Record operational cash flows of $323 million. Record attributable free cash flow of nearly $252 million. Very strong numbers that obviously led us to increase for the second time in a row now since Q2 to increase the dividend. It's great to have our shareholders participate not only in increase of our share price but also in additional return to our dividend policy. Great quarter. I am really happy where it stands. As I said, we saw the first glimpse of what Juanicipio is able to do here in the full quarter, which will be the first full quarter in Q4.

Speaker #6: Record attributable free cash flow of nearly $252 million . Very numbers strong that obviously led us to increase for the second time in a row .

Speaker #6: Now , since Q2 , to increase the dividend , it's great to have our shareholders participate not only in the our share price , but also in return additional to our dividend So great quarter .

Speaker #6: I'm really policy . happy where it stands . As I said , we saw the first glimpse of what Scipio is able to do here in the full quarter , which will be quarter in the first full Q4 .

Michael Steinmann: As I said, we saw the first glimpse of what Juanicipio is able to do here in the full quarter, which will be the first full quarter in Q4. We only had 1 month of the mine in Q3, we see already a very positive impact. Just to the last question there from Don, we will see an important impact to our silver production here from Juanicipio looking forward. I'm really happy where we stand.

Speaker #6: We only had one month of the mine in Q3, and we see already a positive impact. Just to the last question there from Dan, we will see an important impact to our silver production, which we are looking forward to.

Michael Steinmann: We only had 1 month of the mine in Q3, we see already a very positive impact. Just to the last question there from Don, we will see an important impact to our silver production here from Juanicipio looking forward. I'm really happy where we stand. I'm looking forward to a great and strong Q4 report early next year, but also report our outlooks for 2026, and show you in detail how our guidance for that, cost guidance and production guidance looks like. Thanks everyone for calling in, have a good rest of the year, we'll talk in early year, I guess February or so for our Q4 results. Thanks, everyone.

Speaker #6: I'm So really happy where we stand and looking a great and strong Q4 report that early next year , but also report our outlooks for 26 and and so show you in detail how our guidance for that cost guidance and production guidance looks like .

Michael Steinmann: I'm looking forward to a great and strong Q4 report early next year, but also report our outlooks for 2026, and show you in detail how our guidance for that, cost guidance and production guidance looks like. Thanks everyone for calling in, have a good rest of the year, we'll talk in early year, I guess February or so for our Q4 results. Thanks, everyone.

Speaker #6: So thanks everyone for calling in and have a good rest of the year . And we'll talk in early year , I guess February or so for for our Q4 results .

Speaker #6: Thanks everyone .

Operator: This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Q3 2025 Pan American Silver Corp Earnings Call

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