Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) reported audited financial results for the year ended December 31, 2020 and the fourth quarter. Preliminary production results were previously reported on January 19, 2021. Pan American’s audited consolidated financial statements, as well as Pan American’s Management’s Discussion and Analysis for the three and twelve months ended December 31, 2020, and the Company’s Annual Information Form for the year ended December 31, 2020, are available on Pan American’s website at panamericansilver.com and on SEDAR at www.sedar.com.

“Pan American delivered strong financial performance in 2020, generating a record $462.3 million in operating cash flow, which enabled us to fully repay all bank debt, double our quarterly dividend to shareholders, and grow our cash balance at year end,” said Michael Steinmann, President and Chief Executive Officer. “Our operating teams helped deliver these strong results despite the exceptional challenges presented by the COVID-19 pandemic. We continue to support our workforce and communities during this difficult time, and look forward to the deployment of vaccination programs during 2021.”

Q4 2020 and FY 2020 Highlights:

• Revenue was a record $430.5 million in Q4 2020 and totaled $1.3 billion for FY 2020. The rise in realized precious metal prices over 2020 helped mitigate the impact of COVID-19 related mine suspensions and throughput reductions on quantities of metal sold.
• Net earnings were $169.0 million ($0.80 basic earnings per share) and $176.5 million ($0.85 basic earnings per share) in Q4 2020 and FY 2020, respectively. Net earnings in Q4 2020 were driven by record mine operating earnings of $137.2 million and the recognition of deferred income tax assets, including $41.0 million relating primarily to mine life extensions at the Timmins and La Arena operations.
• Adjusted earnings in Q4 2020 were $120.5 million ($0.57 basic adjusted earnings per share). FY 2020 adjusted earnings were $243.4 million ($1.16 basic adjusted earnings per share).
• Record net cash generated from operating activities of $170.6 million in Q4 2020 and $462.3 million for FY 2020.
• As previously announced, consolidated FY 2020 silver and gold production was 17.3 million ounces and 522.4 thousand ounces, respectively. FY 2020 production was largely impacted by the COVID-19 related mine suspensions and throughput reductions. Silver production was further impacted by an inability to access high-grade ore at La Colorada due to ventilation issues, which are being remedied, and lower grades at Dolores and San Vicente from mine sequencing.
• FY 2020 Silver Segment Cash Costs and All-in Sustaining Costs of $7.05 and $11.38 per silver ounce sold, respectively, were in line with the Revised 2020 Forecast⁽¹⁾.
• FY 2020 Gold Segment Cash Costs and AISC of $797 and $1,011 per gold ounce sold, respectively, were below the Revised 2020 Forecast⁽¹⁾.
• FY 2020 Consolidated AISC, including gold by-product credits from the Gold Segment mines, of $(3.29) per silver ounce sold was below the Revised 2020 Forecast⁽¹⁾.
• Sustaining capital was $52.0 million and $162.0 million in Q4 2020 and FY 2020, respectively. Project capital was $3.8 million and $21.5 million in Q4 2020 and FY 2020, respectively. Approximately $50.0 million to $60.0 million of capital expenditures were deferred into 2021 due to COVID-19.
• In 2020, Pan American repaid a net $275 million on its revolving Credit Facility. At December 31, 2020, the Company had cash and short-term investment balances of $279.1 million, working capital of $495.2 million, and no amounts drawn on its $500 million Credit Facility.
• The Board of Directors has approved a cash dividend of $0.07 per common share, or approximately $14.7 million in aggregate cash dividends, payable on or about March 11, 2021, to holders of record of Pan American’s common shares as of the close on March 1, 2021. Pan American’s dividends are designated as eligible dividends for the purposes of the Income Tax Act (Canada). As is standard practice, the amounts and specific distribution dates of any future dividends will be evaluated and determined by the Board of Directors on an ongoing basis.

Cash Costs, AISC, adjusted earnings, basic adjusted earnings per share, sustaining capital, project capital, working capital, total debt, and total available liquidity are not generally accepted accounting principle (“non-GAAP”) financial measures. Please refer to the “Alternative Performance (non-GAAP) Measures” section of this news release for further information on these measures.

CONSOLIDATED RESULTS

INDIVIDUAL MINE OPERATION PERFORMANCE

2020 ANNUAL RESULTS COMPARED TO FORECAST

The Company’s 2020 annual production, Cash Costs, AISC and capital expenditures compared to management’s most recent annual forecast amounts are as follows:

Q4 and FY 2020 Audited Results

Pan American plans to release its audited results for Q4 and FY 2020 on February 17, 2021, after market close. A conference call and webcast will be held on February 18, 2021.

About Pan American Silver

Pan American owns and operates silver and gold mines located in Mexico, Peru, Canada, Argentina and Bolivia. We also own the Escobal mine in Guatemala that is currently not operating. As the world’s second largest primary silver producer with the largest silver reserve base globally, we provide enhanced exposure to silver in addition to a diversified portfolio of gold producing assets. Pan American has a 27-year history of operating in Latin America, earning an industry-leading reputation for corporate social responsibility, operational excellence and prudent financial management. We are headquartered in Vancouver, B.C. and our shares trade on NASDAQ and the Toronto Stock Exchange.