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Form 6-K PAN AMERICAN SILVER CORP For: Mar 31

May 11, 2022 5:18 PM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
__________________
 
FORM 6-K 
_____________________
 
REPORT OF FOREIGN PRIVATE ISSUER
 
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT of 1934
 
May 11, 2022
_____________________
 
Pan American Silver Corp.
(Exact name of registrant as specified in its charter)
 
 1500-625 HOWE STREET
VANCOUVER BC CANADA V6C 2T6
(Address of principal executive offices)
 
 000-13727
(Commission File Number)
_____________________
 
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F  Form 40-F   X 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1). _____
 
 
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____






EXHIBIT LIST
 
 
Exhibits 99.1 and 99.2 of this report on Form 6-K is incorporated by reference into the Registrant’s registration statements on Form S-8 (Nos. 333-180494, 333-180495, 333-206162 and 333-229795) that have been filed with the Securities and Exchange Commission.
 





Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Pan American Silver Corp.
(Registrant)
   
Date: May 11, 2022By:
/s/ "Delaney Fisher"
Delaney Fisher
Senior Vice President, Associate General Counsel and Corporate Secretary





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Unaudited Condensed Interim Consolidated Financial Statements and Notes
 
FOR THE THREE MONTHS ENDING MARCH 31, 2022


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Condensed Interim Consolidated Statements of Financial Position
(unaudited, in thousands of U.S. dollars)
March 31,December 31,
20222021
Assets  
Current assets  
Cash and cash equivalents (Note 21)$271,876 $283,550 
Short-term investments (Note 5)54,410 51,723 
Trade and other receivables139,513 128,150 
Income tax receivables22,281 20,282 
Inventories (Note 6)472,959 500,462 
Derivative assets (Note 4a)7,143 3,995 
Prepaid expenses and other current assets14,441 13,007 
 982,623 1,001,169 
Non-current assets 
Mineral properties, plant and equipment (Note 7)2,330,156 2,344,551 
Long-term inventories (Note 6)26,457 25,644 
Long-term tax receivables9,044 8,711 
Deferred tax assets61,992 55,953 
Long-term investment and associate (Note 8)124,677 77,410 
Goodwill & other assets (Note 9)5,348 5,146 
Total assets$3,540,297 $3,518,584 
Liabilities  
Current liabilities  
Accounts payable and accrued liabilities (Note 10)$299,593 $306,087 
Derivative liabilities (Note 4a)1,115 351 
Provisions (Note 11)12,508 8,041 
Lease obligations (Note 12)11,974 10,663 
Debt (Note 13)3,400 3,400 
Income tax payables33,370 59,133 
 361,960 387,675 
Non-current liabilities  
Long-term provisions (Note 11)246,250 240,111 
Deferred tax liabilities171,433 184,785 
Long-term lease obligations (Note 12)20,622 19,898 
Long-term debt (Note 13)11,050 11,900 
Deferred revenue (Note 14)14,951 12,516 
Other long-term liabilities (Note 15)26,062 25,691 
Total liabilities852,328 882,576 
Equity (Note 16)  
Issued capital3,136,626 3,136,214 
Reserves93,348 93,375 
Deficit(546,773)(598,035)
Total equity attributable to Company shareholders2,683,201 2,631,554 
Non-controlling interests4,768 4,454 
Total equity2,687,969 2,636,008 
Total liabilities and equity$3,540,297 $3,518,584 
Contingencies (Note 24)
See accompanying notes to the condensed interim consolidated financial statements
APPROVED BY THE BOARD ON MAY 11, 2022
"signed"Gillian Winckler, Director"signed"Michael Steinmann, Director
PAN AMERICAN SILVER CORP.
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Condensed Interim Consolidated Statements of
Earnings and Comprehensive Earnings
(unaudited, in thousands of U.S. dollars)
Three months ended
March 31,
 20222021
Revenue (Note 22)$439,888 $368,099 
Cost of sales (Note 22)
Production costs (Note 17)(278,828)(193,180)
Depreciation and amortization(84,526)(75,093)
Royalties(9,779)(9,862)
 (373,133)(278,135)
Mine operating earnings (Note 22)66,755 89,964 
General and administrative(10,893)(8,052)
Exploration and project development(2,799)(2,480)
Mine care and maintenance (Note 18)(9,668)(7,266)
Foreign exchange losses(3,054)(2,409)
Gains on derivatives (Note 4c)4,362 2,370 
(Losses) gains on sale of mineral properties, plant and equipment(177)110 
Gains and income from associates (Note 8)45,033 198 
Other income1,081 854 
Earnings from operations90,640 73,289 
Investment income (loss) (Note 4b)2,826 (39,033)
Interest and finance expense (Note 19)(5,195)(3,841)
Earnings before income taxes88,271 30,415 
Income tax expense (Note 23)(11,440)(37,977)
Net earnings (loss) and comprehensive earnings (loss)$76,831 $(7,562)
Net earnings (loss) and comprehensive earnings (loss) attributable to:
Equity holders of the Company$76,517 $(7,798)
Non-controlling interests314 236 
 $76,831 $(7,562)
Earnings (loss) per share attributable to common shareholders (Note 20)
Basic earnings (loss) per share$0.36 $(0.04)
Diluted earnings (loss) per share$0.36 $(0.04)
Weighted average shares outstanding (in 000’s) Basic210,463 210,261 
Weighted average shares outstanding (in 000’s) Diluted210,550 210,261 
See accompanying notes to the condensed interim consolidated financial statements.
PAN AMERICAN SILVER CORP.
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Condensed Interim Consolidated Statements of Cash Flows
(unaudited, in thousands of U.S. dollars)
Three months ended
March 31,
 20222021
Operating activities
Net earnings (loss) for the period$76,831 $(7,562)
Income tax expense (Note 23)11,440 37,977 
Depreciation and amortization84,526 75,093 
Gains and income from associates (Note 8)(45,033)(198)
Accretion on closure and decommissioning provision (Notes 11,19)3,710 1,869 
Unrealized foreign exchange losses2,328 2,167 
Interest expense (Note 19)895 1,043 
Investment (income) loss(2,826)39,033 
Interest paid(1,370)(1,215)
Interest received18 117 
Income taxes paid(58,273)(61,333)
Other operating activities (Note 21)11,570 (9,743)
Net change in non-cash working capital items (Note 21)(15,058)(47,398)
$68,758 $29,850 
Investing activities
Payments for mineral properties, plant and equipment$(61,453)$(47,971)
Proceeds from disposition of mineral properties, plant and equipment7,699 770 
Proceeds from short-term investments704 255 
Net proceeds from derivatives1,978 2,484 
$(51,072)$(44,462)
Financing activities
Proceeds from common shares issued$323 $39 
Distributions to non-controlling interests (313)
Dividends paid(25,255)(14,718)
Repayment of debt (Note 13)(850)— 
Payment of equipment leases(3,419)(2,982)
$(29,201)$(17,974)
Effects of exchange rate changes on cash and cash equivalents(159)(1,030)
Decrease in cash and cash equivalents(11,674)(33,616)
Cash and cash equivalents at the beginning of the period283,550 167,113 
Cash and cash equivalents at the end of the period$271,876 $133,497 
Supplemental cash flow information (Note 21).
See accompanying notes to the condensed interim consolidated financial statements.
PAN AMERICAN SILVER CORP.
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Condensed Interim Consolidated Statements of Changes in Equity
(unaudited, in thousands of U.S. dollars, except for number of shares)
 Attributable to equity holders of the Company  
 Issued
shares
Issued
capital
Reserves
DeficitTotalNon-
controlling
interests
Total
equity
Balance, December 31, 2020210,258,667 $3,132,140 $93,409 $(623,030)$2,602,519 $3,320 $2,605,839 
Total comprehensive earnings  
Net earnings for the year— — — 97,428 97,428 1,134 98,562 
Shares issued on the exercise of stock options65,780 762 (143)— 619 — 619 
Shares issued as compensation133,077 3,312 — — 3,312 — 3,312 
Share-based compensation on option grants— — 109 — 109 — 109 
Distributions by subsidiaries to non-controlling interests— — — (933)(933)— (933)
Dividends paid— — — (71,500)(71,500)— (71,500)
Balance, December 31, 2021210,457,524 $3,136,214 $93,375 $(598,035)$2,631,554 $4,454 $2,636,008 
Total comprehensive earnings       
Net earnings for the period— — — 76,517 76,517 314 76,831 
Shares issued on the exercise of stock options26,930 412 (89)— 323 — 323 
Share-based compensation on option grants— — 62 — 62 — 62 
Dividends paid— — — (25,255)(25,255)— (25,255)
Balance, March 31, 2022210,484,454 $3,136,626 $93,348 $(546,773)$2,683,201 $4,768 $2,687,969 
 Attributable to equity holders of the Company  
 Issued
shares
Issued
capital
ReservesDeficitTotalNon-
controlling
interests
Total
equity
Balance, December 31, 2020210,258,667 $3,132,140 $93,409 $(623,030)$2,602,519 $3,320 $2,605,839 
Total comprehensive loss  
Net loss for the period— — — (7,798)(7,798)236 (7,562)
Shares issued on the exercise of stock options2,868 46 (7)— 39 — 39 
Share-based compensation on option grants— — — — 
Distributions by subsidiaries to non-controlling interests— — — (313)(313)— (313)
Dividends paid— — — (14,718)(14,718)— (14,718)
Balance, March 31 2021210,261,535 $3,132,186 $93,407 $(645,859)$2,579,734 $3,556 $2,583,290 
See accompanying notes to the condensed interim consolidated financial statements.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
1. NATURE OF OPERATIONS
Pan American Silver Corp. is the ultimate parent company of its subsidiary group (collectively, the “Company”, or “Pan American”). Pan American is a British Columbia corporation domiciled in Canada, and its office is at Suite 1440 – 625 Howe Street, Vancouver, British Columbia, V6C 2T6.
The Company is engaged in the production and sale of silver, gold, zinc, lead and copper as well as other related activities, including exploration, extraction, processing, refining and reclamation. The Company’s major products are produced from mines in Canada, Peru, Mexico, Argentina and Bolivia. Additionally, the Company has project development activities in Canada, Peru, Mexico and Argentina, and exploration activities throughout South America, Canada and Mexico. As at March 31, 2022, the Company's Escobal mine in Guatemala continues to be on care and maintenance pending satisfactory completion of a consultation process led by the Ministry of Energy and Mines in Guatemala. In late February 2022, the Company's Morococha mine in Peru was placed on care and maintenance as a requirement to move the processing facilities to allow for the expansion of a neighboring mine.
Principal subsidiaries:
The principal subsidiaries of the Company and their geographic locations at March 31, 2022 were as follows:
LocationSubsidiaryOwnership
Interest
AccountingOperations and Development
Projects Owned
CanadaLake Shore Gold Corp.100%ConsolidatedBell Creek and Timmins West mines
MexicoPlata Panamericana S.A. de C.V.100%ConsolidatedLa Colorada mine
Compañía Minera Dolores S.A. de C.V.100%ConsolidatedDolores mine
PeruPan American Silver Huaron S.A.100%ConsolidatedHuaron mine
Compañía Minera Argentum S.A.92%ConsolidatedMorococha mine
Shahuindo S.A.C.100%ConsolidatedShahuindo mine
La Arena S.A.100%ConsolidatedLa Arena mine
BoliviaPan American Silver (Bolivia) S.A.95%ConsolidatedSan Vicente mine
GuatemalaPan American Silver Guatemala S.A.100%ConsolidatedEscobal mine
ArgentinaMinera Tritón Argentina S.A.100%ConsolidatedManantial Espejo & Cap-Oeste Sur Este mines
Minera Joaquin S.R.L.100%ConsolidatedJoaquin mine
Minera Argenta S.A.100%ConsolidatedNavidad project
2. BASIS OF PREPARATION
These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”) and have been condensed with certain disclosures from the Company's audited consolidated financial statements for the year ended December 31, 2021 (the " Annual Financial Statements") omitted. Accordingly, these unaudited condensed interim consolidated financial statements should be read in conjunction with the Annual Financial Statements.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, STANDARDS, AND JUDGEMENTS
a)Changes in accounting policies
The accounting policies applied in the preparation of these unaudited condensed interim consolidated financial statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2021.
b)Future changes in accounting standards
Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. Management is still evaluating and does not expect any such pronouncements to have a material impact on the Company’s consolidated financial statements upon adoption.
c)Significant judgements
In preparing the Company’s unaudited condensed interim consolidated financial statements for the three months ended March 31, 2022, the Company applied the critical judgments and estimates disclosed in Note 5 of its audited consolidated financial statements for the year ended December 31, 2021.
4. FINANCIAL INSTRUMENTS
a)Financial assets and liabilities by categories
March 31, 2022Amortized costFVTPLFVTOCITotal
Financial Assets:  
Cash and cash equivalents$271,876 $ $ $271,876 
Trade receivables from provisional concentrates sales(1)
 48,242  48,242 
Receivables not arising from sale of metal concentrates(1)
73,748   73,748 
Short-term investments 54,410  54,410 
Long-term investment and associate(2)
  124,677 124,677 
Derivative assets 7,143  7,143 
$345,624 $109,795 $124,677 $580,096 
Financial Liabilities:
Derivative liabilities$ $1,115 $ $1,115 
Debt$14,450 $ $ $14,450 
(1)Included in Trade and other receivables.
(2)Comprised of the Company's investment in Maverix Metals Inc. ("Maverix") (Note 8).
December 31, 2021Amortized costFVTPLFVTOCITotal
Financial Assets:  
Cash and cash equivalents$283,550 $— $— $283,550 
Trade receivables from provisional concentrates sales(1)
— 40,020 — 40,020 
Receivables not arising from sale of metal concentrates(1)
76,902 — — 76,902 
Short-term investments— 51,723 — 51,723 
Derivative assets— 3,995 — 3,995 
$360,452 $95,738 $— $456,190 
Financial Liabilities:
Derivative liabilities$— $351 $— $351 
Debt$15,300 $— $— $15,300 
(1)Included in Trade and other receivables.
b)Short-term investments recorded at fair value through profit or loss ("FVTPL")
The Company’s short-term investments are recorded at FVTPL. The gains (losses) from short-term investments for the three months ended March 31, 2022 and 2021 were as follows:
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
 Three months ended
March 31,
 20222021
Unrealized gains (losses) on short-term investments$2,456 $(39,033)
Realized gains on short-term investments370 — 
 $2,826 $(39,033)
c)Derivative instruments
The Company's derivatives are comprised of foreign currency and commodity contracts. The gains on derivatives for the three months ended March 31, 2022 and 2021 were comprised of the following:
Three months ended
March 31,
 20222021
Gains on derivatives 
Realized gains on derivatives$1,979 $2,477 
Unrealized gains (losses) on derivatives2,383 (107)
 $4,362 $2,370 
d)Fair value information
i) Fair Value Measurement
The categories of the fair value hierarchy that reflect the inputs to valuation techniques used to measure fair value are as follows:
Level 1: Quoted prices in active markets for identical assets or liabilities;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and
Level 3: Inputs for the asset or liability based on unobservable market data.
The levels in the fair value hierarchy into which the Company’s financial assets and liabilities that are measured and recognized on the Consolidated Statements of Financial Position at fair value on a recurring basis were categorized as follows:
 At March 31, 2022At December 31, 2021
 Level 1Level 2Level 1Level 2
Assets and Liabilities:    
Short-term investments$54,410 $ $51,723 $— 
Long-term investment and associate(1)
124,677  — — 
Trade receivables from provisional concentrate sales 48,242 — 40,020 
Derivative assets 7,143 — 3,995 
Derivative liabilities (1,115)— (351)
 $179,087 $54,270 $51,723 $43,664 
(1)Comprised of the Company's investment in Maverix (Note 8).
The methodology and assessment of inputs for determining the fair value of financial assets and liabilities as well as the levels of hierarchy for the Company’s financial assets and liabilities measured at fair value remains unchanged from that at December 31, 2021.
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
ii) Valuation Techniques
Short-term investments, and long-term investment and associate
The Company’s short-term investments, and long-term investment and associate are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy and are primarily equity securities. The fair value of the equity securities is calculated using the quoted market price multiplied by the quantity of shares held by the Company.
Derivative assets and liabilities
The Company’s derivative assets and liabilities were comprised of foreign currency and commodity contracts which are valued using observable market prices.
Receivables from Provisional Concentrate Sales
A portion of the Company’s trade receivables arose from provisional concentrate sales and are valued using quoted market prices based on the forward London Metal Exchange for copper, zinc and lead and the London Bullion Market Association P.M. fix for gold and silver.
e)Financial Instruments and related risks
The Company has exposure to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth and shareholder returns. The principal financial risks to which the Company is exposed are:
i)Credit risk
ii)Liquidity risk
iii)Market risk
1. Currency risk
2. Interest rate risk
3. Price risk
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.
i) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s trade receivables. The carrying value of trade receivables represents the maximum credit exposure. 
The Company has concentrate contracts to sell the zinc, lead, copper and silver concentrates produced by the Huaron, Morococha, San Vicente and La Colorada mines. Concentrate contracts are a common business practice in the mining industry. The terms of the concentrate contracts may require the Company to deliver concentrate that has a value greater than the payment received at the time of delivery, thereby introducing the Company to credit risk of the buyers of concentrates. Should any of these counterparties not honour purchase arrangements, or should any of them become insolvent, the Company may incur losses for products already shipped and be forced to sell its concentrates on the spot market or it may not have a market for its concentrates and therefore its future operating results may be materially adversely impacted. At March 31, 2022, the Company had receivable balances associated with buyers of its concentrates of $48.2 million (December 31, 2021 - $40.0 million). The vast majority of the Company’s concentrate is sold to five well-known concentrate buyers. 
Doré production from La Colorada, Dolores, Manantial Espejo, Shahuindo, La Arena, and Timmins is refined under long-term agreements with fixed refining terms at seven separate refineries worldwide. The Company generally retains the risk and title to the precious metals throughout the process of refining and therefore is exposed to the risk that the refineries will not be able to perform in accordance with the
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
refining contract and that the Company may not be able to fully recover precious metals in such circumstances. At March 31, 2022, the Company had approximately $35.7 million (December 31, 2021 - $52.3 million) of value contained in precious metal inventory at refineries. The Company maintains insurance coverage against the loss of precious metals at the Company’s mine sites, in-transit to refineries and while at the refineries. Risk is transferred to the refineries upon delivery.
The Company maintains trading facilities with several banks and bullion dealers for the purposes of transacting the Company’s metal sales. None of these facilities are subject to margin arrangements. The Company’s trading activities can expose the Company to the credit risk of its counterparties to the extent that the trading positions have a positive mark-to-market value. However, the Company maintains an active credit management and monitoring program to minimize the risk of excessive credit risk concentration with any single counterparty.
Refined silver and gold are sold in the spot market to various bullion traders and banks. Credit risk may arise from these activities if the Company is not paid for metal at the time it is delivered, as required by spot sale contracts.
Supplier advances for products and services yet to be provided are a common practice in some jurisdictions in which we operate. These advances represent a credit risk to us to the extent that suppliers do not deliver products or perform services as expected. As at March 31, 2022, we had made $17.5 million of supplier advances (December 31, 2021 - $11.2 million), which are reflected in “Trade and other receivables” on the consolidated statements of financial position.
Management constantly monitors and assesses the credit risk resulting from its refining arrangements, concentrate sales and commodity contracts with its refiners, trading counterparties and customers. Furthermore, management carefully considers credit risk when allocating prospective sales and refining business to counterparties. In making allocation decisions, management attempts to avoid unacceptable concentration of credit risk to any single counterparty.
The Company invests its cash and cash equivalents, which also has credit risk, with the objective of maintaining safety of principal and providing adequate liquidity to meet all current payment obligations. 
ii) Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk by continuously monitoring forecasted and actual cash flows. The Company has in place a rigorous planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its expansion plans. The Company strives to maintain sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations, its holdings of cash and short-term investments, and its committed loan facilities.
There was no significant change to the Company’s exposure to liquidity risk during the three months ended March 31, 2022.
iii) Market Risk
1.Currency Risk
The Company reports its financial statements in USD; however, the Company operates in jurisdictions that utilize other currencies. As a consequence, the financial results of the Company’s operations as reported in USD are subject to changes in the value of the USD relative to local currencies. Since the Company’s sales are denominated in USD and a portion of the Company’s operating costs and capital spending are in local currencies, the Company is negatively impacted by strengthening local currencies relative to the USD and positively impacted by the inverse. 
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
At March 31, 2022, the Company had outstanding positions on its foreign currency exposure of Mexican peso ("MXN"), Peruvian sol ("PEN") and Canadian dollar ("CAD") purchases. The Company recorded gains of $0.5 million, $2.1 million, and $0.2 million, respectively, on MXN, PEN and CAD derivative contracts for the three months ended March 31, 2022 (2021 - losses of $0.8 million, losses of $0.9 million and gains of $0.5 million, respectively).
2.Interest Rate Risk
Interest rate risk is the risk that the fair values and future cash flows of the Company will fluctuate because of changes in market interest rates. The average interest rate earned by the Company during the three months ended March 31, 2022 on its cash and short-term investments was 0.33% (2021 - 0.35%).
On August 10, 2021 the Company entered into a Sustainability-Linked Credit Facility which replaced the Company's revolving credit facility (the "Credit Facility") (Note 13). There were no amounts drawn during the three months ended March 31, 2022 and March 31, 2021 on either the Sustainability-Linked Credit Facility or the Credit Facility.
In June 2021, a wholly-owned Peruvian subsidiary of the Company entered into a loan agreement (the "Loan") for the purpose of certain construction financing (Note 13). The Loan incurred an average interest rate of 3.6% during the three months ended March 31, 2022.
At March 31, 2022, the Company had $32.6 million in lease obligations (December 31, 2021 - $30.6 million) that are subject to an annualized interest rate of 10.4% (2021 - 10.6%).
3.Price Risk
Metal price risk is the risk that changes in metal prices will affect the Company’s income or the value of its related financial instruments. The Company derives its revenue from the sale of silver, gold, lead, copper, and zinc. The Company’s sales are directly dependent on metal prices that have shown significant volatility and are beyond the Company’s control. Consistent with the Company’s mission to provide equity investors with exposure to changes in precious metal prices, the Company’s current policy is to not hedge the price of precious metal.
The Company mitigates the price risk associated with its base metal production by committing some of its forecasted base metal production from time to time under forward sales and option contracts. The Board of Directors continually assesses the Company’s strategy towards its base metal exposure, depending on market conditions.
During the three months ended March 31, 2021, the Company entered into collars made up of put and call contracts for its exposure to copper but did not enter into copper contracts during the three months ended March 31, 2022. The Company recorded losses of $0.6 million during the three months ended March 31, 2021.
At March 31, 2022, the Company had outstanding positions of diesel swap contracts designated to fix or limit the Company’s exposure to higher fuel prices (the “Diesel fuel swaps”). The Company recorded gains of $2.8 million on Diesel fuel swaps during the three months ended March 31, 2022 (2021 - gains of $4.2 million).
At March 31, 2022, the Company had outstanding zinc sales contracts to manage exposure to fluctuation in prices. The company recorded losses of $1.1 million on these positions during the three months ended March 31, 2022. The Company did not enter into zinc contracts during the three months ended March 31, 2021.
PAN AMERICAN SILVER CORP.
10

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
5. SHORT-TERM INVESTMENTS
 March 31, 2022December 31, 2021
Fair
Value
CostAccumulated
unrealized
holding gains
Fair ValueCostAccumulated
unrealized
holding gains
Short-term investments$54,410 $20,781 $33,629 $51,723 $20,419 $31,304 

6. INVENTORIES
Inventories consist of:
 March 31,
2022
December 31,
2021
Concentrate inventory$26,619 $30,647 
Stockpile ore33,121 43,216 
Heap leach inventory and in process287,503 286,266 
Doré and finished inventory63,500 81,448 
Materials and supplies88,673 84,529 
Total inventories$499,416 $526,106 
Less: current portion of inventories$(472,959)$(500,462)
Non-current portion of inventories(1)
$26,457 $25,644 
(1)Inventories at Escobal mine, which include $19.2 million (December 31, 2021 - $18.3 million) in supplies with the remainder attributable to metals, have been classified as non-current pending the restart of operations.
Total inventories held at net realizable value amounted to $190.3 million at March 31, 2022 (December 31, 2021 – $203.7 million). The Company recorded write-downs of $14.4 million for the three months ended March 31, 2022 (2021 – recoveries of $8.1 million) and were included in cost of sales.
PAN AMERICAN SILVER CORP.
11

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
7. MINERAL PROPERTIES, PLANT AND EQUIPMENT
Mineral properties, plant and equipment consist of:
 March 31, 2022December 31, 2021
 CostAccumulated
Depreciation 
and 
Impairment
Carrying
Value
CostAccumulated
Depreciation 
and 
Impairment
Carrying
 Value
Producing properties:
Huaron, Peru$230,374 $(144,553)$85,821 $224,700 $(141,902)$82,798 
Morococha, Peru258,086 (178,505)79,581 277,105 (188,821)88,284 
Shahuindo, Peru597,354 (142,140)455,214 590,096 (132,727)457,369 
La Arena, Peru220,615 (113,351)107,264 208,306 (105,006)103,300 
La Colorada, Mexico366,041 (190,734)175,307 355,471 (185,684)169,787 
Dolores, Mexico(1)
1,752,000 (1,385,854)366,146 1,738,040 (1,350,908)387,132 
Manantial Espejo, Argentina (2)
519,399 (506,584)12,815 518,931 (500,244)18,687 
San Vicente, Bolivia154,308 (112,845)41,463 151,045 (110,829)40,216 
Timmins, Canada338,163 (108,797)229,366 335,488 (103,903)231,585 
Other29,542 (20,109)9,433 29,804 (19,664)10,140 
$4,465,882 $(2,903,472)$1,562,410 $4,428,986 $(2,839,688)$1,589,298 
Non-Producing Properties:     
Land$6,373 $(871)$5,502 $6,373 $(871)$5,502 
Navidad, Argentina(3)
566,577 (376,101)190,476 566,577 (376,101)190,476 
Escobal, Guatemala258,877 (2,191)256,686 257,390 (1,842)255,548 
Timmins, Canada63,477  63,477 63,018 — 63,018 
Shahuindo, Peru3,549  3,549 3,549 — 3,549 
La Arena, Peru117,011  117,011 117,005 — 117,005 
Minefinders, Mexico78,443 (36,975)41,468 78,443 (36,975)41,468 
La Colorada, Mexico66,426  66,426 55,370 — 55,370 
Morococha, Peru2,981  2,981 2,981 — 2,981 
Other32,366 (12,196)20,170 32,426 (12,090)20,336 
$1,196,080 $(428,334)$767,746 $1,183,132 $(427,879)$755,253 
Total$5,661,962 $(3,331,806)$2,330,156 $5,612,118 $(3,267,567)$2,344,551 
(1)Includes previously recorded impairment charges of $748.9 million at March 31, 2022 (December 31, 2021 - $748.9 million).
(2)Includes previously recorded impairment charges of $173.3 million at March 31, 2022 (December 31, 2021 - $173.3 million).
(3)Includes previously recorded impairment charges of $376.1 million at March 31, 2022 (December 31, 2021 - $376.1 million).
Dispositions
On March 29, 2022, the Company received a $7.0 million payment from an arm's length party to be applied to certain costs associated with the closure and reclamation of the Morococha mine processing facility. This payment was included in proceeds from disposition of mineral properties, plant and equipment during the three months ended March 31, 2022.
PAN AMERICAN SILVER CORP.
12

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
8. LONG-TERM INVESTMENT AND ASSOCIATE
The following table shows a continuity of the Company's long-term investment and associate, classified as financial assets measured at fair value through other comprehensive income ("FVTOCI") and equity investees:
FVTOCIInvestment in Associate
MaverixMaverixTotal
At December 31, 2020$ $71,560 $71,560 
Acquisition of shares in associate— 2,616 2,616 
Equity pick-up from equity investees— 4,510 4,510 
Dilution losses— (34)(34)
Adjustment for change in ownership interest— (22)(22)
Dividends received— (1,220)(1,220)
At December 31, 2021 77,410 77,410 
Equity pick-up from equity investees$— $413 $413 
Shareholder capital contribution— — — 
Dividends received— (325)(325)
Loss of significant influence124,677 (77,498)47,179 
At March 31, 2022$124,677 $ $124,677 
Investment in Maverix:
On March 31, 2022, the Company determined that it no longer held significant influence over Maverix due to declining to exercise its right to nominate a representative to serve as a director on Maverix’s Board of Directors and accordingly the Company no longer has the power to participate in the financial and operating policy decisions of Maverix. As a result, the Company recorded a $44.6 million gain concurrent with the redesignation of its investment in Maverix from Investment in Associate, accounted using the "equity method" whereby the Company's recorded into income its ownership proportion of Maverix estimated earnings, into a long-term financial asset recorded at FVTOCI.
The Company's share of Maverix income or loss was recorded based on its 17% interest during the three months ended March 31, 2022 and 2021, representing the Company’s fully diluted ownership.
9. GOODWILL AND OTHER ASSETS
Other assets consist of: 
March 31,
2022
December 31,
2021
Goodwill$2,775 $2,775 
Equity investments1,435 1,247 
Other assets1,138 1,124 
$5,348 $5,146 

PAN AMERICAN SILVER CORP.
13

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
10. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consist of: 
March 31,
2022
December 31,
2021
Trade account payables(1)
$75,153 $77,461 
Royalty payables26,591 24,113 
Other accounts payable and accrued liabilities108,167 107,207 
Payroll and severance liabilities58,073 64,968 
Value added tax liabilities12,621 12,006 
Other tax payables18,988 20,332 
$299,593 $306,087 
(1)No interest is charged on the trade accounts payable ranging from 30 to 60 days from the invoice date. The Company has policies in place to ensure that all payables are paid within the credit terms.
11. PROVISIONS
2022
Closure and decommissioning, December 31, 2021$242,861 
Revisions in estimates and obligations incurred7,190 
Reclamation expenditures(976)
Accretion expense (Note 19)3,710 
Closure and decommissioning, March 31, 2022$252,785 
Litigation5,973 
Total provisions, March 31, 2022$258,758 
Provision classification:March 31,
2022
December 31,
2021
Current$12,508 $8,041 
Non-Current246,250 240,111 
$258,758 $248,152 
12. LEASES
Right-of-use Assets ("ROU")
The following table summarizes changes in ROU Assets for the three months ended March 31, 2022 which have been recorded in mineral properties, plant and equipment on the condensed interim consolidated statements of financial position:
Three months ended March 31, 2022
Opening net book value$29,496 
Additions5,552 
Depreciation(3,064)
Other(844)
Closing net book value$31,140 
PAN AMERICAN SILVER CORP.
14

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
Lease obligations
The following table presents a reconciliation of the Company's undiscounted cash flows at March 31, 2022 and December 31, 2021 to their present value for the Company's lease obligations:
March 31,
2022
December 31,
2021
Within one year$12,874 $11,690 
Between one and five years18,210 16,676 
Beyond five years16,228 16,934 
Total undiscounted lease obligations47,312 45,300 
Less future interest charges(14,716)(14,739)
Total discounted lease obligations32,596 30,561 
Less current portion of lease obligations(11,974)(10,663)
Non-current portion of lease obligations$20,622 $19,898 
13. DEBT
Debt consists of:
 March 31,
2022
December 31,
2021
Loan$14,450 $15,300 
Less: current portion of Loan(3,400)(3,400)
Non-current portion of Loan$11,050 $11,900 
In June 2021, a wholly-owned Peruvian subsidiary of the Company entered into a Loan for the purpose of certain construction financing. The Loan is denominated in USD, has a five-year term with quarterly repayments and bears interest of 3.6% per annum.
On August 10, 2021, Pan American Silver Corp. entered into an amendment agreement to amend and extend its $500 million Credit Facility, with a maturity date of February 1, 2023, into a $500 million Sustainability-Linked Credit Facility. The Sustainability-Linked Credit Facility features a pricing mechanism allowing for pricing adjustments on drawn and undrawn balances based on the Company's sustainability performance ratings and scores published by MSCI and S&P Global, leaders in ESG and Corporate Governance research and ratings. The Sustainability-Linked Credit Facility matures on August 8, 2025. In addition, the financial covenants include the requirement for the Company to maintain: (i) a leverage ratio less than or equal to 3.5:1; and (ii) an interest coverage ratio more than or equal to 3.0:1. The Sustainability-Linked Credit Facility and Credit Facility, respectively, were undrawn at March 31, 2022 and December 31, 2021. As of March 31, 2022, the Company was in compliance with all covenants required by the Sustainability-Linked Credit Facility.
The Sustainability-Linked Credit Facility can be drawn down at any time to finance the Company’s working capital requirements, acquisitions, investments and for general corporate purposes. Subject to pricing adjustment based on sustainability performance ratings and scores, any amounts drawn under the Sustainability-Linked Credit Facility will incur interest at LIBOR plus 1.825% to 2.80%. Undrawn amounts are subject to a stand-by fee of 0.41% to 0.63% per annum, dependent on the Company's leverage ratio and subject to pricing adjustments based on sustainability performance ratings and scores.
The Company did not draw from these credit facilities during the three months ended March 31, 2022 and 2021 and incurred $0.6 million and $0.5 million, respectively, in standby charges on undrawn amounts.
PAN AMERICAN SILVER CORP.
15

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
14. DEFERRED REVENUE
On July 11, 2016 the Company recognized a deferred revenue liability after it sold precious metal streams to Maverix whereby the Company will sell 100% of the future gold production from La Colorada and 5% of the future gold production from La Bolsa, which is in the exploration stage, respectively (the "Streams").
The deferred revenue related to the Streams will be recognized as revenue by Pan American as the gold ounces are delivered to Maverix and increased by $2.5 million during the three months ended March 31, 2022 to record the deferred revenue previously not recognized while using the equity method of accounting after concluding that it no longer held significant influence of Maverix. The deferred revenue liability was $15.0 million at March 31, 2022 (December 31, 2021 - $12.5 million).
15. OTHER LONG-TERM LIABILITIES
Other long-term liabilities consist of: 
 March 31,
2022
December 31,
2021
Deferred credit(1)
$20,788 $20,788 
Other tax payables15 16 
Severance liabilities5,259 4,887 
 $26,062 $25,691 
(1)Represents the obligation to deliver future silver production of Navidad pursuant to a silver stream contract.
16. SHARE CAPITAL AND EMPLOYEE COMPENSATION PLANS
a.Stock options and common shares issued as compensation ("Compensation Shares")
For the three months ended March 31, 2022, the total share-based compensation expense relating to stock options and Compensation Shares was $1.3 million (2021 - $0.9 million) and is presented as a component of general and administrative expense.
Stock options
The Company did not grant any stock options during the three months ended March 31, 2022 or the comparative periods in 2021.
During the three months ended March 31, 2022, the Company issued 26,930 common shares in connection with the exercise of options (2021 – 2,868 common shares).
The following table summarizes changes in stock options for the three months ended March 31, 2022 and year ended December 31, 2021:
 Stock Options
 OptionsWeighted
Average Exercise
Price CAD$
As at December 31, 2020317,417 $18.78 
Granted53,115 30.70 
Exercised(65,780)11.77 
Expired(2,162)41.62 
Forfeited(23,587)32.27 
As at December 31, 2021279,003 $21.38 
Exercised(26,930)15.15 
Expired(4,324)41.62 
As at March 31, 2022247,749 $21.71 
PAN AMERICAN SILVER CORP.
16

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
The following table summarizes information about the Company's stock options outstanding at March 31, 2022:
 Options OutstandingOptions Exercisable
Range of Exercise Prices
CAD$
Number Outstanding as at March 31, 2022Weighted Average
Remaining
Contractual Life
(years)
Weighted
Average
Exercise Price
CAD$
Number Outstanding as at March 31, 2022Weighted
Average
Exercise
Price CAD$
$9.76 - $17.1131,882 0.6 $12.55 31,882 $12.55 
$17.12 - $24.46134,097 3.3 $18.56 134,097 $18.56 
$24.47 - $31.8174,165 6.2 $29.52 21,050 $26.54 
$31.82 - $39.487,605 5.7 $39.48 3,804 $39.48 
 247,749 3.9 $21.71 190,833 $18.85 
b.PSUs
The Company recorded an expense of $0.7 million for PSUs for the three months ended March 31, 2022 (2021 - $0.2 million) and is presented as a component of general and administrative expense. 
At March 31, 2022, the following PSUs were outstanding:
PSUNumber OutstandingFair Value
As at December 31, 2020255,559 $8,870 
Granted79,417 2,049 
Paid out(117,328)(4,539)
Change in value— (901)
As at December 31, 2021217,648 $5,479 
Change in value 554 
As at March 31, 2022217,648 $6,033 
c.RSUs
Compensation expense for RSUs was $1.3 million for the three months ended March 31, 2022 (2021 - $0.6 million) and is presented as a component of general and administrative expense.
At March 31, 2022, the following RSUs were outstanding:
RSUNumber OutstandingFair Value
As at December 31, 2020396,572 $13,730 
Granted240,366 5,818 
Paid out(197,320)(4,829)
Forfeited(13,218)(329)
Change in value— (3,699)
As at December 31, 2021426,400 $10,691 
Forfeited(3,126)(86)
Change in value 1,079 
As at March 31, 2022423,274 $11,684 
d.Issued share capital
The Company is authorized to issue 400,000,000 common shares without par value.
PAN AMERICAN SILVER CORP.
17

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
e.Dividends
The Company declared the following dividends for May 11, 2022 and the three months ended March 31, 2022 and 2021:
Declaration DateRecord DateDividend per common share
May 11, 2022(1)
May 24, 2022$0.120 
February 23, 2022March 7, 2022$0.120 
November 9, 2021November 22, 2021$0.100 
August 10, 2021August 23, 2021$0.100 
May 12, 2021May 25, 2021$0.070 
February 17, 2021March 1, 2021$0.070 
(1)These dividends were declared subsequent to the quarter ended March 31, 2022 and have not been recognized as distributions to owners during the period presented.
f.CVRs
As part of the acquisition of Tahoe Resources Inc. on February 22, 2019, the Company issued 313,887,490 Contingent Value Rights ("CVRs"), with a term of 10 years, which are convertible into 15,600,208 common shares upon the first commercial shipment of concentrate following the restart of operations at the Escobal mine. As of March 31, 2022, there were 313,883,990 CVRs outstanding which were convertible into 15,600,034 common shares (December 31, 2021 - 313,883,990 CVRs convertible into 15,600,034 common shares).
17. PRODUCTION COSTS
Production costs are comprised of the following: 
Three months ended
March 31,
20222021
Materials and consumables$95,075 $88,064 
Salaries and employee benefits80,004 81,861 
Contractors54,544 46,843 
Utilities16,060 11,810 
Other expense4,771 12,020 
Changes in inventories28,374 (47,418)
 $278,828 $193,180 
18. MINE CARE AND MAINTENANCE
Three months ended
March 31,
20222021
Mine care and maintenance expenses(1)
$9,668 $7,266 
(1)Comprised of Escobal mine, Morococha mine and Navidad project.
PAN AMERICAN SILVER CORP.
18

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
19. INTEREST AND FINANCE EXPENSE
Three months ended
March 31,
20222021
Interest expense$895 $1,043 
Finance fees590 929 
Accretion expense (Note 11)3,710 1,869 
 $5,195 $3,841 
20. EARNINGS PER SHARE (BASIC AND DILUTED)
For the three months ended March 31,20222021
 
Earnings(1)
(Numerator)
Shares (000’s)
(Denominator)
Per-Share
Amount
Earnings(1)
(Numerator)
Shares (000’s)
(Denominator)
Per-Share
Amount
Net earnings (loss) for the period$76,517 $(7,798)
Basic earnings (loss) per share$76,517 210,463 $0.36 $(7,798)210,261 $(0.04)
Effect of Dilutive Securities:
Stock Options 87 — — 
Diluted earnings (loss) per share$76,517 210,550 $0.36 $(7,798)210,261 $(0.04)
(1)Net earnings attributable to equity holders of the Company.
Potentially dilutive securities excluded in the diluted earnings per share calculation for the three months ended March 31, 2022 were 60,720 out-of-the-money options and CVRs potentially convertible into 15,600,034 common shares (2021 – 10,090 out-of-the-money options and CVRs potentially convertible into 15,600,034 common shares).
21. SUPPLEMENTAL CASH FLOW INFORMATION
The following tables summarize other adjustments for non-cash income statement items, changes in operating working capital items and significant non-cash items: 
Three months ended
March 31,
Other operating activities20222021
Adjustments for non-cash income statement items:
Net realizable value adjustment for inventories$14,443 $(8,143)
Gains on derivatives (Note 4c)(4,362)(2,370)
Share-based compensation expense1,312 880 
Losses (gains) on sale of mineral properties, plant and equipment177 (110)
$11,570 $(9,743)
Three months ended
March 31,
Changes in non-cash operating working capital items:20222021
Trade and other receivables$(12,377)$1,223 
Inventories10,335 (39,934)
Prepaid expenses(994)(2,180)
Accounts payable and accrued liabilities(11,728)(6,415)
Provisions(294)(92)
 $(15,058)$(47,398)
Cash and Cash EquivalentsMarch 31,
2022
December 31,
2021
Cash in banks$271,876 $283,550 
PAN AMERICAN SILVER CORP.
19

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
22. SEGMENTED INFORMATION
The Company reviews its segment reporting to ensure it reflects the operational structure of the Company and enables the Company's Chief Operating Decision Maker ("CODM") to review operating segment performance. We have determined that each producing mine and significant development property represents an operating segment. The Company has organized its reportable and operating segments by significant revenue streams and geographic regions.
Significant information relating to the Company’s reportable operating segments is summarized in the table below:
For the three months ended March 31, 2022
Segment/CountryOperationRevenueProduction costs and royaltiesDepreciationMine operating earnings
Capital expenditures(1)
Silver Segment:
MexicoLa Colorada$44,722 $24,463 $5,276 $14,983 $12,415 
PeruHuaron43,133 22,876 3,031 17,226 3,149 
Morococha22,305 22,181 2,308 (2,184)351 
BoliviaSan Vicente16,902 12,840 1,987 2,075 2,901 
ArgentinaManantial Espejo33,150 26,575 5,643 932 1,089 
GuatemalaEscobal    304 
Total Silver Segment160,212 108,935 18,245 33,032 20,209 
Gold Segment:
MexicoDolores92,118 67,508 34,489 (9,879)14,353 
PeruShahuindo66,140 33,045 10,619 22,476 6,687 
La Arena55,018 28,709 9,824 16,485 12,959 
CanadaTimmins66,400 50,108 10,270 6,022 10,325 
Total Gold Segment279,676 179,370 65,202 35,104 44,324 
Other segment:
CanadaPas Corp  105 (105)86 
ArgentinaNavidad    15 
OtherOther 302 974 (1,276)238 
Total$439,888 $288,607 $84,526 $66,755 $64,872 
(1)Includes payments for mineral properties, plant and equipment and payment of equipment leases.
PAN AMERICAN SILVER CORP.
20

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
For the three months ended March 31, 2021
Segment/CountryOperationRevenueProduction costs and royaltiesDepreciationMine operating earnings
Capital expenditures(1)
Silver Segment:
MexicoLa Colorada$5,330 $4,204 $2,364 $(1,238)$9,468 
PeruHuaron38,502 21,706 2,875 13,921 1,612 
Morococha24,357 18,164 3,550 2,643 2,391 
BoliviaSan Vicente24,651 15,909 2,936 5,806 558 
ArgentinaManantial Espejo29,102 26,396 3,963 (1,257)1,378 
GuatemalaEscobal— — — — 32 
Total Silver Segment121,942 86,379 15,688 19,875 15,439 
Gold Segment:
MexicoDolores72,493 28,840 28,581 15,072 8,918 
PeruShahuindo58,337 25,772 9,158 23,407 2,822 
La Arena55,953 19,063 11,251 25,639 14,719 
CanadaTimmins59,374 42,988 10,040 6,346 8,866 
Total Gold Segment246,157 116,663 59,030 70,464 35,325 
Other segment:
CanadaPas Corp— — 119 (119)81 
ArgentinaNavidad— — — — 61 
OtherOther— — 256 (256)47 
Total$368,099 $203,042 $75,093 $89,964 $50,953 
(1)Includes payments for mineral properties, plant and equipment and payment of equipment leases.
At March 31, 2022
Segment/CountryOperationAssetsLiabilitiesNet assets
Silver Segment:
MexicoLa Colorada$311,212 $55,675 $255,537 
PeruHuaron133,268 64,918 68,350 
Morococha121,197 42,568 78,629 
BoliviaSan Vicente88,315 51,734 36,581 
ArgentinaManantial Espejo64,679 24,950 39,729 
GuatemalaEscobal291,582 20,774 270,808 
Total Silver Segment1,010,253 260,619 749,634 
Gold Segment:
MexicoDolores684,489 169,424 515,065 
PeruShahuindo600,217 193,374 406,843 
La Arena316,242 103,045 213,197 
CanadaTimmins398,085 57,087 340,998 
Total Gold Segment1,999,033 522,930 1,476,103 
Other segment:
CanadaPas Corp218,878 19,179 199,699 
ArgentinaNavidad193,992 2,920 191,072 
Other118,141 46,680 71,461 
Total$3,540,297 $852,328 $2,687,969 
PAN AMERICAN SILVER CORP.
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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
At December 31, 2021
Segment/CountryOperationAssetsLiabilitiesNet assets
Silver Segment:
MexicoLa Colorada$299,038 $52,934 $246,104 
PeruHuaron117,514 59,975 57,539 
Morococha124,607 40,494 84,113 
BoliviaSan Vicente88,924 53,264 35,660 
ArgentinaManantial Espejo71,012 29,017 41,995 
GuatemalaEscobal287,811 19,833 267,978 
Total Silver Segment988,906 255,517 733,389 
Gold Segment:
MexicoDolores750,220 193,638 556,582 
PeruShahuindo591,164 199,450 391,714 
La Arena317,371 106,799 210,572 
CanadaTimmins419,106 62,196 356,910 
Total Gold Segment2,077,861 562,083 1,515,778 
Other segment:
CanadaPas Corp176,006 16,492 159,514 
ArgentinaNavidad193,077 — 193,077 
Other82,734 48,484 34,250 
Total$3,518,584 $882,576 $2,636,008 
 Three months ended
March 31,
Product Revenue20222021
Refined silver and gold$317,397 $278,925 
Zinc concentrate28,281 25,285 
Lead concentrate48,922 17,857 
Copper concentrate28,405 29,834 
Silver concentrate16,883 16,198 
Total$439,888 $368,099 
23. INCOME TAXES
Components of Income Tax Expense
Three months ended
March 31,
20222021
Current income tax expense$30,486 $26,576 
Deferred income tax (recovery) expense(19,046)11,401 
Income tax expense$11,440 $37,977 
Income tax expense differs from the amounts that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes. These differences result from the items shown on the following table, which results in effective tax rates that vary considerably from the comparable period. The main factors that impacted the effective tax rate for the three months ended March 31, 2022 and the comparable period for 2021 were foreign exchange rate fluctuations, changes in the recognition of certain deferred tax assets (primarily resulting from gains/losses on short-term investments and on foreign denominated intercompany debt), mining taxes paid, and withholding taxes remitted on payments from foreign subsidiaries. The Company expects that these and other factors will continue to cause fluctuations in effective tax rates in the future.
PAN AMERICAN SILVER CORP.
22

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Notes to the Condensed Interim Consolidated Financial Statements
As at March 31, 2022 and December 31, 2021, and for the
three months ended March 31, 2022 and 2021
(unaudited with tabular amounts in thousands of U.S. dollars except number of
shares, options, warrants, and per share amounts, unless otherwise noted)
Reconciliation of Effective Income Tax Rate
Three months ended
March 31,
20222021
Earnings before taxes and non-controlling interest$88,271 $30,415 
Statutory Canadian income tax rate27.00 %27.00 %
Income tax expense based on above rates$23,833 $8,212 
Increase (decrease) due to:
Non-deductible expenditures2,006 1,367 
Foreign tax rate differences1,501 3,915 
Change in net deferred tax assets not recognized(11,685)14,590 
Effect of other taxes paid (mining and withholding)4,615 8,374 
Effect of foreign exchange on tax expense(11,462)7,662 
Non-taxable impact of foreign exchange2,493 (2,546)
Change in non-deductible portion of reclamation liabilities1,383 (3,243)
Other(1,244)(354)
Income tax expense$11,440 $37,977 
24. CONTINGENCIES
The Company is subject to various legal, tax, environmental and regulatory matters that arise in the ordinary course of business activities. Each of these matters is subject to various uncertainties and it is possible that some of these matters may be resolved unfavorably to the Company. In the opinion of management none of these matters are expected to have a material adverse effect on the results of operations or financial conditions of the Company. Since December 31, 2021, there have been no significant changes to these contractual obligations and commitments.
25. RELATED PARTY TRANSACTIONS
The Company’s related parties include its subsidiaries, associates over which it exercises significant influence, and key management personnel. Transactions with the Company's subsidiaries have been eliminated on consolidation. Maverix remained a related party until March 31, 2022 (Note 8). There were no other related party transactions for the three months ended March 31, 2022 and 2021.
PAN AMERICAN SILVER CORP.
23
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Management’s Discussion and Analysis
FOR THE THREE MONTHS ENDED MARCH 31, 2022


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Management Discussion and Analysis
For the three months ended March 31, 2022 and 2021
(tabular amounts are in thousands of U.S. dollars except number of shares, options,
warrants, per share amounts, and per ounce amounts, unless otherwise noted)

PAN AMERICAN SILVER CORP.
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Management Discussion and Analysis
For the three months ended March 31, 2022 and 2021
(tabular amounts are in thousands of U.S. dollars except number of shares, options,
warrants, per share amounts, and per ounce amounts, unless otherwise noted)
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 
May 11, 2022
INTRODUCTION
This Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the significant factors that influence the performance of Pan American Silver Corp. and its subsidiaries (collectively “Pan American”, “we”, “us”, “our” or the “Company”) and such factors that may affect its future performance. This MD&A should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2021 (the “2021 Annual Financial Statements”), and the related notes contained therein, and the unaudited condensed interim consolidated financial statements for the three months ended March 31, 2022 (the “Q1 2022 Financial Statements”), and the related notes contained therein. All amounts in this MD&A, the 2021 Annual Financial Statements, and the Q1 2022 Financial Statements are expressed in United States dollars (“USD”) unless identified otherwise. The Company reports its financial position, financial performance and cash flows in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). Pan American’s significant accounting policies are set out in Note 3 of the 2021 Annual Financial Statements.
This MD&A refers to various non-Generally Accepted Accounting Principles (“non-GAAP”) measures, such as “all-in sustaining costs per ounce sold”, “cash costs per ounce sold”, “adjusted earnings” and “basic adjusted earnings per share”, “cash mine operating earnings”, “total debt”, “capital”, and “working capital”, which are used by the Company to manage and evaluate operating performance at each of the Company’s mines and are widely reported in the mining industry as benchmarks for performance, do not have standardized meanings under IFRS, and the methodology by which these measures are calculated may differ from similar measures reported by other companies. To facilitate a better understanding of these non-GAAP measures as calculated by the Company, additional information has been provided in this MD&A. Please refer to the section of this MD&A entitled “Alternative Performance (Non-GAAP) Measures” for a detailed description of “all-in sustaining cost per ounce sold”, “cash costs per ounce sold”, “adjusted earnings” and “basic adjusted earnings per share”, “cash mine operating earnings”, “total debt”, “capital”, and “working capital” as well as details of the Company’s by-product credits and a reconciliation, where appropriate, of these measures to the Q1 2022 Financial Statements.
Any reference to “cash costs” in this MD&A should be understood to mean cash costs per ounce of silver or gold sold, net of by-product credits. Any reference to “AISC” in this MD&A should be understood to mean all-in sustaining costs per silver or gold ounce sold, net of by-product credits.
Except for historical information contained in this MD&A, the following disclosures are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian provincial securities laws, or are future oriented financial information and as such, are based on an assumed set of economic conditions and courses of action. Please refer to the cautionary note regarding forward-looking statements and information at the back of this MD&A and the “Risks Related to Pan American’s Business” contained in the Company’s most recent Annual Information Form on file with the Canadian provincial securities regulatory authorities and Form 40-F on file with the U.S. Securities and Exchange Commission (the “SEC”). Additional information about Pan American and its business activities, including its Annual Information Form, is available on SEDAR at www.sedar.com.
PAN AMERICAN SILVER CORP.
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Management Discussion and Analysis
For the three months ended March 31, 2022 and 2021
(tabular amounts are in thousands of U.S. dollars except number of shares, options,
warrants, per share amounts, and per ounce amounts, unless otherwise noted)
CORE BUSINESS AND STRATEGY
Pan American engages in silver and gold mining and related activities, including exploration, mine development, extraction, processing, refining and reclamation. The Company owns and operates silver and gold mines located in Peru, Mexico, Argentina, Bolivia, and Canada. We also own the Escobal mine in Guatemala that is currently not operating. In addition, the Company is exploring for new silver deposits and opportunities throughout the Americas. The Company is listed on the Toronto Stock Exchange (Symbol: PAAS) and on the Nasdaq Global Select Market in New York (Symbol: PAAS).
Pan American’s vision is to be the world’s premier silver mining company, with a reputation for excellence in discovery, engineering, innovation and sustainable development. To achieve this vision, we base our business on the following strategy:
Generate sustainable profits and superior returns on investments through the safe, efficient and environmentally sound development and operation of our assets.
Constantly replace and grow our mineral reserves and mineral resources through targeted near-mine exploration and global business development.
Foster positive long-term relationships with our employees, shareholders, communities and local governments through open and honest communication and ethical and sustainable business practices.
Continually search for opportunities to upgrade and improve the quality of our assets, both internally and through acquisition.
Encourage our employees to be innovative, responsive and entrepreneurial throughout our entire organization.
To execute this strategy, Pan American has assembled a sector-leading team of mining professionals with a depth of knowledge and experience in all aspects of our business, which enables the Company to confidently advance early stage projects through construction and into operation.
PAN AMERICAN SILVER CORP.
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Management Discussion and Analysis
For the three months ended March 31, 2022 and 2021
(tabular amounts are in thousands of U.S. dollars except number of shares, options,
warrants, per share amounts, and per ounce amounts, unless otherwise noted)
Q1 2022 HIGHLIGHTS
Operations
Silver production of 4.62 million ounces
Consolidated silver production for Q1 2022 of 4.62 million ounces was comparable with the 4.58 million ounces produced in the three months ended March 31, 2021 ("Q1 2021"), primarily reflecting higher production at La Colorada and Manantial Espejo being offset by lower production from San Vicente and Morococha. The production variances for each of Pan American's mines are further described in the "Individual Mine Performance" section of this MD&A.
The Company reaffirms its 2022 operating outlook for silver production, as presented in the Company's 2021 Annual MD&A dated February 23, 2022.        
Gold production of 131.0 thousand ounces
Consolidated gold production for Q1 2022 of 131.0 thousand ounces was 5% lower than the 137.6 thousand ounces produced in Q1 2021, primarily reflecting lower production at La Arena and Dolores, which was partially offset by higher production at Shahuindo, as further described in the "Individual Mine Performance" section of this MD&A.
The Company reaffirms its 2022 operating outlook for gold production, as presented in the Company's 2021 Annual MD&A dated February 23, 2022.
Base metal production
Zinc, lead and copper ("base metal") production in Q1 2022 of 10.2 thousand tonnes, 4.7 thousand tonnes, and 1.8 thousand tonnes, respectively, was lower than Q1 2021, primarily as a result of lower production at Morococha as the operation was placed on care and maintenance in February 2022 as previously announced in the Company's 2021 Annual MD&A, and decreased grades at Huaron.
The Company reaffirms its 2022 original annual forecast for zinc, lead and copper production, as presented in the Company's 2021 Annual MD&A dated February 23, 2022.
Financial
Cash Flow, liquidity and working capital position
Cash flow from operations: in Q1 2022 totaled $68.8 million, $38.9 million more than the $29.9 million generated in Q1 2021, reflecting: an $8.8 million increase in cash mine operating earnings(1) and a $32.3 million reduction in the build-up of non-cash working capital, largely related to changes in inventory that were a draw-down in Q1 2022 compared with a build-up in Q1 2021. These factors offset a $5.2 million increase in care and maintenance expenditures and general and administrative expenses. The cash flow movements are further described in the "Overview of Q1 2022 Financial Results" section.
As at March 31, 2022, the Company had working capital of $620.7 million, inclusive of cash and short-term investment balances of $326.3 million; a long-term investment in Maverix Metals Inc. ("Maverix") with a market value of $124.7 million; and $500.0 million available under its Sustainability-Linked Credit Facility. Total debt of $47.0 million was related to lease liabilities and construction loans.
Revenue and net income
Revenue in Q1 2022 of $439.9 million was 20% higher than in Q1 2021 as a result of an increase in silver and gold ounces sold by 40% and 9%, respectively. This was, largely due to draw downs of Q1 2022 inventories compared to build ups of Q1 2021 inventories.
PAN AMERICAN SILVER CORP.
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Management Discussion and Analysis
For the three months ended March 31, 2022 and 2021
(tabular amounts are in thousands of U.S. dollars except number of shares, options,
warrants, per share amounts, and per ounce amounts, unless otherwise noted)
Net earnings of $76.8 million ($0.36 basic earnings per share) was recorded for Q1 2022, compared with net losses of $7.6 million ($0.04 basic loss per share) in Q1 2021. The $84.4 million quarter-over-quarter increase is mainly due to:
i.a $44.8 million increase in gains and income from long-term assets. This was primarily due to a $44.6 million fair-value adjustment gain recognized in Q1 2022 from a change in the accounting treatment for the Company's investment in Maverix from an investment in associate to a long-term financial asset.
ii.a $41.9 million positive variance from investment income with income of $2.8 million in Q1 2022 relative to losses of $39.0 million in Q1 2021, primarily due to the fair value mark-to-market adjustments on short-term investments in equity securities, largely New Pacific Metals Corp;
iii.a $26.5 million decrease in income tax expense due to changes in foreign exchange rates increasing the value of deductible tax attributes in Q1 2022 compared to a reduction in the value of deductible tax attributes in Q1 2021; partially offset by,
iv.a $23.2 million decrease in mine operating earnings from increased production costs. This was a result of: a $22.6 million negative variation in quarter-over-quarter Net Realizable Value ("NRV") inventory adjustments; the COVID Omicron variant's impact on workforce deployment levels; and inflationary pressures.
See the "Overview of Q1 2022 Financial Results" section of this MD&A for further information.
Adjusted earnings(1): of $32.0 million ($0.15 per share) was recorded in Q1 2022, compared to the Q1 2021 adjusted earnings of $37.4 million ($0.18 per share).
Cash Costs(1)
During Q1 2022, all operations experienced reduced workforce deployments due to the spread of the COVID Omicron variant, which affected throughput and unit costs. Costs across the portfolio were also negatively impacted by inflationary pressures, particularly from an increase in prices for wages, diesel and certain consumables, including cyanide, explosives, and steel products, such as grinding media, as well as supply-chain shortages. These challenges are collectively referred as "Omicron, Inflationary and Supply Chain Cost Increases" throughout the report.
Despite the Omicron, Inflationary and Supply Chain Cost Increases listed above, Silver Segment Cash Costs per ounce in Q1 2022 of $10.23 were $2.07 lower than in Q1 2021. The decrease in quarter-over-quarter Cash Costs is driven primarily from:
i.a $1.45 per ounce decrease driven by Huaron and Morococha, largely from higher base metal prices;
ii.a $1.17 per ounce decrease from lower costs per ounce at La Colorada, which is further described in the "Individual Mine Performance" section of this MD&A; and,
iii.a $0.39 per ounce decrease at Manantial Espejo, largely due to higher grades.
These increases were partially offset by a $0.93 per ounce increase to Silver Segment Cash Costs from San Vicente due to narrower vein structures reducing silver and zinc grades.
Gold Segment Cash Costs per ounce in Q1 2022 were $1,069, $223 higher than in Q1 2021, reflecting increases at all Gold Segment mines, largely driven by lower mined grades due to mine sequencing, and inflationary pressures and supply chain shortages as previously described.
All-In Sustaining Costs (“AISC”)(1)
Silver Segment AISC for Q1 2022 of $13.41 per ounce were $3.58 lower than Q1 2021. The decrease primarily reflects the same factors that impacted Cash Costs described above, in addition to a $1.51 per ounce decrease, largely from lower sustaining capital expenditures per ounce sold in Q1 2022, and lower greenfield exploration expenditures allocated to the Silver Segment operations.
PAN AMERICAN SILVER CORP.
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Management Discussion and Analysis
For the three months ended March 31, 2022 and 2021
(tabular amounts are in thousands of U.S. dollars except number of shares, options,
warrants, per share amounts, and per ounce amounts, unless otherwise noted)
Gold Segment AISC for Q1 2022 of $1,502 per ounce were $444 higher than Q1 2021, largely reflecting the same factors that impacted Cash Costs described above, as well as higher sustaining capital and the impact from NRV adjustments at Dolores, which increased costs by $13.1 million, or $94 per ounce, in Q1 2022 and decreased costs by $9.6 million, or $75 per ounce, in the comparative quarter of 2021.
(1) Adjusted earnings, Cash Costs, AISC and Cash Mine Operating Earnings are non-GAAP measures, please refer to the “Alternative Performance (Non-GAAP) Measures” section of this MD&A for a detailed reconciliation of these measures to the Q1 2022 Financial Statements.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG)
Pan American is committed to conducting its business in a responsible and sustainable manner. Our ESG values include: caring for the environment in which we operate; contributing to the long-term development of our host communities; ensuring safe and secure workplaces for our employees; contributing to the welfare of our employees, local communities and governments; and, operating transparently.
Pan American released its 2021 sustainability report (the "Sustainability Report") on May 5, 2022, which is available on our website at www.panamericansilver.com. The Sustainability Report articulates our vision of sustainability, shares our management approach to sustainable development in the context of our business, discloses environmental, workplace and social performance, including challenges and opportunities, and demonstrates our progress toward our sustainability goals and initiatives. The Sustainability Report is prepared in accordance to the Global Reporting Initiative (GRI) Standards and is aligned with the Sustainability Accounting Standards Board (SASB) Standard. It also contains information in consideration of the Task Force on Climate Related Financial Disclosures (TCFD) reporting framework, which is included in the Climate, Energy, and Greenhouse Gas Emissions section of the Sustainability Report. The 2021 Sustainability Report also serves as our annual Communication on Progress for the United Nations Global Compact (UNGC).
The Company plans on providing a mid-year update on our progress with regards to our 2022 ESG goals, which can be found in our 2021 sustainability report, later in 2022.
OPERATING PERFORMANCE
Silver and Gold Production    
The following table provides silver and gold production at each of Pan American’s operations for the three month periods ended March 31, 2022 and 2021. Each operation’s production variances are further discussed in the “Individual Mine Performance” section of this MD&A.
 Silver Production
(ounces ‘000s)
Gold Production
(ounces ‘000s)
 Three months ended
March 31,
Three months ended
March 31,
 2022202120222021
La Colorada1,419 1,065 0.6 0.5 
Huaron899 884 0.2 0.3 
Morococha(1)
324 521 0.1 0.2 
San Vicente(2)
476 701  0.1 
Manantial Espejo