PAAS - Earnings call transcript Q1 2021 | Pan American Silver Corp.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver First Quarter 2021 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 question [Operator Instructions] I would now like to turn the conference over to Siren Fisekci, Vice President of Investor Relations. Mrs. ahead go Please Fisekci.

Siren Fisekci

We certain and statements release, Conference constitute included to Please our today’s factors website. participants will our and review contains Call. President invited as over that Form. today’s most copy available listen-only and call operator, the news market review Steinmann, will are after First and call and provide close on American Michael Information the a CEO, material presentation brief Annual Quarter That our as I presentation call are call a mode. in participate XXXX information. to information Media recent the to our now our welcome, and you, Pan on results statements Pan yesterday’s forward-looking news and results. everyone, of of the who Silver’s the Form and cautionary released American’s risk MD&A in Thank statements on and in for other well XX-F described release turn slides

open then and answers. to questions will the call We

Michael Steinmann

XXX grade joining we us ventilation to of to blocked. mine. surface In became for the into development quarter plans, commissioning meters and operating provide financial level first including to the for translated of development of bottom the XX new skarn areas discuss La which to raise was access several the QX deposit and a you raise, to highest that regain of the Thank during challenging quarter meter results. operationally At results. longer-term our our are obviously our advancing Colorada, It today ventilation projects

nearby through additional blockage ramp and boring. We are raise working to that drifting from bypass a

QX, improved be and that completed throughput We in late late to rates expect XXXX. leading work to in mine sequencing grades, that

lab a of withhold The after we and negotiation produced shipped transport in an to buildup and was come with a delaying until we In La quarter terms. agreeable QX contractor, in not result where the inventory zinc metal concentrate silver to concentrate at sales. opted mutual until was domestic transport Colorada of closed, the addition, most base could extended we

inventories highly QX, in at distorted year be sustaining all-in rainy Colorada prevents with buildup for in from been to withheld ores pit. having occurred the resulted concentrate new which production based the sales The two in shipment combination to have having be commercialized in all April the our the will also customers from XXXX, high-grade accumulated shipped. the XXXX, ventilation at delay ore site Europe. remainder normal La stocks in XXXX our lead blockage mining levels The concentrate inventory of content for in QX and from well, season, early the and in next now at been due temporary to stockpiling in delayed the lower of shipped. levels returned inventory from costs preparation of QX As transitioning shipping Dolores quarters. over the the bottom resumed the us rate build which with open of will The the Concentrate the smelter

the mark-to-market noncash share in paid Bolivia. cash year. loss in quarter, million mostly our project the in on the both million, the $XX build was flow quarter in net loss on inventory the Sand million payments short-term which the in buildup are $XX.X Dolores well, Silver impact As $XX adjusted the $X.X New Together, Adjusted our We a buildup per the owns Metals, $X.XX or Pacific resulted large million including of which of the led buildups some of for of current that during reflecting value recorded in-pad million $XXX.X million La million market QX, earnings lead investments, of cash the $XX.X million loss, quarter. base typically a of inventory investment taxes as million $XX.X Metals revenue construction cost stage had at delaying end recovered short-term and since capital at mentioning of at and Operating first tax into year. Probably QX. our were which and $XX.X production $XX.X constraints has to of well QX the Colorada $X.XX of worth investments share. that weighted price pad sequencing cost working New later Shahuindo some for $XX.X to or to is inventory, and the led a per a a million, and substantially inventories, of share above Pacific

remains cash million solid Our financial with in $XXX.X investments. position and short-term

credit Espejo. of a inventory last per undrawn. million Board production from Dolores production and impacted buildup silver by ventilation common line the quarter. La than consolidated the Shahuindo and QX share, expected dividend million $XXX Manantial $X.XX unchanged at Colorada, X.X The issues quarterly at approved Our mine totaled remains of at sequencing and ounces,

forecast to respectively. of XX.X establishing to million silver at been $XX.XX in to host has expected. to all-in We content. will to with XXX,XXX stockpiled of totaled Creek segment due prolonged were last $XX underground blended mining into lower grain during about and placed, Colorada geotechnical $XX.XX later for a higher offset we courser and pandemic rates this grained estimated of amount to increased cost travel mined Correspondingly, our the segment per sold have XXX,XXX it year sequencing per buildup has by heavily by we cost ounces for an the impacted to Manantial revised gold into Due QX due our greater to cash million $X.XX mine guidance $X.XX extraction costs from material ores in discussed delays grades between for the At which inventory tonnes buildup mine mining COVID-XX a at during fine in At in the cash to of sustaining quarter, we rock a enable mentioned a the and of placement conditions in back for was ounces. per expectation impacted plan which around $XX.XX XX.X from be normal our workforce later Silver to shortfalls increasing tons some development our ounces were resulted higher which in gold rates Espejo. the new mine Colorada XX a workforce Timmins, were of midyear. XXXX our $XX.XX one XXXX. of below Espejo, silver million interprovincial the be ordinary silver ventilation in is range Bell was while ounce La reduced that $XX, to the on area and level pit, production delayed for operations, deployment QX, Manantial deployments Espejo effect range ounce Argentina and section original quarter These guidance lower million QX a sequencing lower costs in will clay Manantial to restrict XX% in sold. sustaining reduced costs mine of from a consolidated ounce XX of throughput where $XX.XX to our address production grades to by jurisdictions. about XX% production partially rates approximately the and rates previously, more continues ounces. to La of production heaps. advancing at with to Shahuindo, at While have than production lower $XX.XX previous outsized the and restrictions At inventories them, extent all-in had to fine equivalent have the operations Dolores, being

issues $XXX, production costs we year. ounce $X,XXX and All of all-in in sustaining the rates the were are per continue to these call were steadily Gold increased expect remainder transitory, and sold. QX costs cash during of segment gold

the through Timmins improvements at Given year. the of and remainder throughput expected the Shahuindo

XXX,XXX million, to XXXX respectively. to cost maintaining segment of deferred $XXX are sustaining estimated of ounces ounce, expenditures per million $X,XXX to AIS XXX,XXX of Shahuindo. per and gold certain capital a guidance of and $XXX to $XX annual reduction cash to $X,XXX range production at to million due Inclusive $XXX and in gold $XXX timing We expenditure costs ounce of

on are rates of in our allowing projects, La at opened ores levels impact mining improve at ventilation Creek through over We year, the and lower continue improves the the based blending and Colorada more that assumption diminish expect ores grained ongoing mine throughput will to courser Shahuindo production the COVID-XX are Ball to mined fine with ventilation Timmins. the at stockpile XXXX in

drill expansion forward and releasing metal Yesterday, results strong payment the look back-end we flow some generating issued XX,XXX prices, infill the on meter large from current our drill year. loaded Given La strong the release to a Colorada’s news in we cash behind and also is project, impressive us tax program.

PEA, this advancing of a project report, preliminary at targeting end assessment are XXXX. technical We the economic current or

backfill, In fill data the ongoing. addition ventilation collecting studies. diamond underground infill with and geochemistry baseline environmental to geotechnical design to and of surface continues demonstrate and and Metallurgical commencing is we favorable infrastructure plant hydrogeological evaluations, mine, results flotation testing expansion drilling, along are

the existing of meetings site right Escobal, in projects American consultation increasing Guatemala. also resulting Energy have that benefit of will We without have process, ventilation or participate conditioning May Pan inclusive cases, underground moved good PEA, projects that. in the La process, shaft already expansions, rock mutual the infrastructure current respect, the potential transparency to in These XXXX to which this advancing will led applications some from look as the We respecting XXXX is an permit naturally include to mine entrances, the April from Xinka decree the under mine project cases and camp parties. consultation has submitted faith, for simultaneously and forward been Ministry of such the government access Guatemala been people’s and in for COVID-XX certain by Mines pressure which, with cooling principle to because systems assist the Colorada ramp requested start excavation upgrades, to and the to operations. restrict At pre-consultation road access movement. gatherings in Silver rise address temperatures of and beyond

open last to takes the And Before I reporting report. available learn commitment I and call mention to we would to year’s like report is about that for to This the website frameworks. XXXX SASB week to those we section, released our Q&A interested sustainability The on the questions. TCFD practices. that, would more report move sustainable for like mining with consideration our on into our

Operator

Thank you.

session. with begin Langton We question-and-answer [Operator the question Instructions] from is first will Our JP Morgan. Tyler now

Tyler Langton

the last you something year, where, restrictions? based say, it guidance, your with I the Is level by quarter. the if easing. of restrictions of to And trying just worse, of no with the have COVID-related got sort sort of to sort end on end was still sort it the kind there of kind - La to at get situation guess what the start a COVID mean, I Colorada just know to restrictions get versus trying you I just you of and of expect Manantial, of impact a of then maybe is more from sense of the sense year. on said carry through I’m

Michael Steinmann

Yes, Tyler, Michael here.

the I bigger the know on really Probably don’t time in Of important end improvement, is course, straight-line a the of stronger the some we looks our at pit. on La underground we Tylor, the operations it and gold We of that mention the is assumed not much quarter. most the where it did impact of our when produced production. doesn’t at was the we year, especially our how Colorada see our evolves of silver get knew faster, how and don’t than know expected, and happens. open Espejo, the that it But every impact, doesn’t beginning but XX% that that the our mean that budget, exactly going. is we because much kind that this already silver QX of kind pandemic mines, of just Manantial here, the in we underground is in on year. like mine better to impact It operations, at than

main at move for come locally, in are system look it, And we of is it reason automatically. - So where most outbreaks traffic in system call there working light then really that that. a they how kind that or is the they place look it are regionally around. regional restrictions have when countries you the a But

many are the But start harder Colorada probably the think each rolling what seen on yes, it in the impact really not I place will we it like very the year But or But but the will and slower depending slightly especially country. like as more countries more a is So situation. that sometimes make is that add are and after expected, now, shutdowns, as Maybe, cases another, countrywide country and really a mention region Steve, of QX, there a the mostly anymore moving for it you that bit vaccines than world, the one than in during around want important each pandemic restrictions in Manantial. is shows in I where in to faster and out something. accelerate underground. improve La said, at impact to

Steven Busby

Yes.

province also people from severe that Steve but because us work Just the leave. travel and the interprovincial to, they Manantial add, than quarantining is here. coming more province, to our we many expected at Tyler, said, Espejo through impact when down put the that them both this due outside restrictions testing, as The of is to into Michael require

really limits we how the actually do a So can and people out many it bring schedules site really mining. shift on extends to the

So the that staff we of just people expected. don’t we full have

adjustment while. We to we peak when it expected at QX, mid-March, been That in we and is some made fairly we South, to there. spike that a they a there. La off probably look it think impacts, think going is severe. sometime seen starting and more epidemic there, continue but early bit an have for why of strong In in we outbreak cases in Colorada, is the that saw Argentina, were during the come a we we At

that over on after are the there curve in other moving optimistic Colorada. we the La more of are we side So QX

Tyler Langton

No, is helpful. the with very then a Okay. follow-up that And La at blockage just Colorada. ventilation

kind resolved of And I production won’t mentioned full guess, from impact longer-term terms compared in of of normal? the those - And kind look you then sort in - sort think should system? of I don’t I in guess, that that have QX a back expecting of you of impact. Just should were if to any quarters and sort kind that should had how of QX QX, of know does ventilation sort QX, then that cost you production to be I of, improvements the the

Steven Busby

Yes.

is indicated, QX. incurred this we bypass that expect So we Steve. raise QX end the of And the as was the complete the of during to, blockage of by

and being had was we We the put process occurred. ventilation already the the that that blockage immediately will in when fan of installed the sloughing

And that will that up open So fairly East will area. quickly. that go

given we equipment we get Before limited that really run opened up, can zone. the ventilation we that are on diesel mine, how in and limitations high-grade on in the particularly much East

this our back is in day high-grade ventilation also So to tonnes in grades lower. we to typically up will X,XXX restricted at La by not of ventilation X,XXX because we is rates during year, day are be expect a the that the about currently, end is will the to we that X,XXX zone, saw And repaired. until mining of period be when per tonnes order. will X,XXX to that be we we then restriction Colorada And

the We back at we head in again, silver are grades. head the XXX to over type we grades high-grade grades. zone; XXX gram more XXX that opens once And towards East that gram XXX probably up, expect into ventilation grades get come normal to reserve to

Operator

Cosmos The Chiu next CIBC. from is with question

Cosmos Chiu

but the things more looks with QX, also of tough first second Could had the just that area fixed team. talk the a portion what expected? the like and have at about, trying Colorada. plugged. talked is bit as about Michael sloughing my than get it on will And question bit is a maybe was better you happened you yet? that Thanks, you La in guess, Certainly, you Have least Maybe it half. I then, fragmented the shotcrete that yet, you was more you sloughing here, portion are to wall a fracture bypass raise

that kind like of going going So how about you a section more section through that Can you and it? bit away? fix to then you to right maybe shotcrete are are raise talk bore

Steven Busby

everybody’s And blocked Cosmos, of zone. our bit eroded, main old, at maybe between Sure, Two that back ventilation La years were time, And lower XXXX. Colorada nearly stepping had had ventilation for this eastern our Steve. just capacity, XX in benefit. one had little late a is to that sloughed, that last ability XXXX Candelaria at our mine in the restricted and high-grade restricted that raises

from and this ventilation ground So starting at XXXX. And foundation through the of hold results November grout. an very, the preparation six for that we the are and that we we mid-January. there suddenly, some pleased material. stability the mines bore doesn’t And And immediately grouting quite replace in would hole. to It quickly we of through in dacite machine mention extensive grout. happening absorb just a the of Mexico an on with for a the what boring, with to robotic those should between raise looked is grouting program zones started came had And how that go extensive started smoothly. complete the raises. doesn’t challenging. I clay of raise been we March having volcanic up shotcrete using program. material, It we good We We hole. to sloughing do it very months where grouting, preconditioning meter into this of with getting October It in ground pretty is walls that raise And actually, implemented the this pretty within went is and just is looking bore of pre-grouted of program believe quite it at to pulled to we had diameter We lower to the us And raise that that able X.X shotcrete And alternatives started solid. we ground program XXXX. raise were successfully. And entered successfully the quite the grouting that took that were program ground were many down success. with the

actually a robotic pull it we off it, to some couple and so walls. to put sloughing sloughing in observe machine. out, it in. rebuild instances, had started That the coming And We shotcrete the back of damaged destroyed

of decided was March could down, indeed, we stop the sloughing spent the that have January it sloughing. we the is quieted and plugged, that part so raise. late we down. sloughing between We complete grouting the the of grouting that and came the of it grouting, period bottom what that So and during to that seen. Today, leave plugged has And

We haven’t sloughing. seen any additional

solidifying. We is are very on the is grouting that raise. It happy with that

So spent to that the bit late to quite up there. from we time anybody in, we open of And went of and drill you plug underneath March that. side. up trying want the April, in March between bottom a don’t Obviously,

that going shooting plug bottom. to from we was side. And the then on have bore, the the is made we and towards decision that it from we to to will through of I full weren’t we drilling actually side. said, bore raise is the eastern that top now. XX of of way. and current will ramp that side a And ventilation the the the going futile the is a And that bottom the we from the the get as that chamber bypass what circuit off of doing are nearby meters above and off kind of we will a that that take So to it raise will end up raise. QX out to it are cross-cut are we project, to it that a And that of get be decided Once XX the build meters down complete a end top April, plug, We of raise by us attempt.

Cosmos Chiu

have you that course. the for that trying event I then completed for vent number this this line raise? of Does one were vent you change the this time in the Of And X, or now construct. other number one raises I part line to this terms of, time believe; ones? two is others? back the push does that believe, Is And raise

Steven Busby

question, It is Great hosted That the down in is a Yes. in This second Number level. one to was two, area. one XXX Cosmo. raise. from actually. was limestone this number completed. rock the XXX level That was the stage

limestone So we the near don’t in we that do dacite. in have the problems

So completed. that was one

It get happy. once fixed. quite upper we are functional this We stage is

is the one. this second So

and The call third in board ground one we we X, Veta a challenging putting raise run is there. over on that pre-grouting it ground. what And are quite to now we tres, are Veta

seeing program that challenges we are are We real facing grouting the in there.

our we such, the sure an us not successfully to able not. perspective. is to going it broken which favorable consider we mineralized. is East, broken is are up is most even or raise ground that ground We further the are by as from that starting ground, And which to be that why are nature also It to up. grout alternative most takes very mining probably a is is It

actually to that be looks looking do concrete-lined are it favorable will blind going east. excavation we supportive, honest, that are be to considering we the that conventional number shaft there. of and quite that alternative one It further We the is a project. are for be will But technologies we to certain. shaft most the So actually, seriously a most And at raise. go think

to over the hoping is are of point. we that where but this next is that or it quarter kind So so, at announce heading

Cosmos Chiu

XX% height was versus recovery was the numbers, on based I quarter, - the it year. in silver the agglomeration? Dolores, bit last maybe delayed time? XX% switching to pulp issues, XX% Great. of to leach for out is kinetics. the as If - year. but in talk Okay. at point gears is lower, due you were talked Or XX% Is it not worked this in Could bit a which like you last at looks more that a heap your there little Maybe MD&A, the it as really was about in comparable anything related Gold about terms the well? it about certain to pad production

question guess I really it So my pack just is impacting is And gold? the kinetics? the what factor is behind leach the

Steven Busby

question, very Yes, good Cosmo.

like that, off, are really from of to build stockpiling of about deploying that, roughly that that is Dolores, pit, say the that we keep that for benches inaccessible. the the available so is agglomeration year season. this high-grade during there, high-grade pulp plant where and rainy I would hit the inventory a of When is of at rainy we majority pit, bottom high-grade the First two-thirds strategy was the the the is, seasons which

So make pads, and the that right, ore. is are It that challenging. to topography Relative over, we do our that pad very that kinetics. is inventory connection to that between there, area of leach tricky stockpiling two And you the are that and not and the mostly that with an gold is is to a area majority is off interestingly, and is increase. And one, leach deep is it we it bit terrain area connection, of has with it this a the kinetics Pad on are shallow on in Pad an just with three that there pretty ore. little

to load through a it is very number we connects those and and cycles to two get happens as areas. and are what stabilize heap of leach the so there And have we to builds and trying it, off of quickly going and

effect what very are seeing of have our is cut we move So that we there. quick through times leach and down, the to there cycle and

Cosmos Chiu

Great. Okay.

to grades? mine of So exactly with sequencing I is a buildup isn’t it all as related part guess recovery, the inventory higher the well

Steven Busby

A is Exactly. of sequence. part it mine big

Cosmos Chiu

it. I got

see then Okay. And one to lowered maybe Manantial XX%. Espejo, has that guidance by question. I last about been X%

guidance during big I call question With on terms of factored a delays the Joaquin. think of COSE how Michael, have Manantial dependent and of now and a part setbacks for you the that well. potential previous at guidance as sort of a QX Joaquin? or in, Espejo, in production much start-up COSE asked I was lower

Steven Busby

Yes, and Steve well mining again. we COSE Joaquin. Actually, Cosmo, it pretty in are is

fringe get deposit. out And mining in of on the tonnage miners are early getting kind Our that to enough the want. limitation the is the we there stopes we of

we than So grades lower we were have anticipating. seen

makes because anyway. don’t so that is important why for future, tons, it relaxing to to reduce that Joaquin effect originally concern tonnage change. have and anticipated, what that And the the grades the it with Manantial really got from of to people. next of net drove COSE few to it see much coming the of and coming the more out more mine have in that And were in what it of And limited is that months Espejo, that us tonnage we we is which out - next we we foreseeable make is up really lower

Michael Steinmann

out well, the But Just is Patagonia pit miners underground resource Argentina is that to open underground province many from are to of that for there. travel the companies, miners, available operations from familiar interprovincial that underground tons as not really us miners provinces in and it add the is mining, who mining here to well. and province. that makes very that obviously, and for other where harder the resource the are including and in get as most the issues people maybe some with South provinces the for ourselves, that lies, companies their underground And then from different restricted

So that is the reason that change. for

Operator

with The next question Turnbull is from Scotiabank. Trevor

Trevor Turnbull

of going just I reason Creek. It guess, as time. is have or as bolting remedy the or I asking more I’m And to the significant type it end geotechnical that quarter; is touched more making last to got there thing areas? accommodate support were these on simple if respect was you is just And it element I of planning modifications with it to like to at a more ore. adding seems wider rock is approach a wondering some question, the how take sounds as some you Bell

year. to you of this later were it back want You talking kind getting where about it

to just that me, maybe more applying than seemed And to it was hardware so like more problem. the

Steven Busby

Trevor, it Yes. here. is Steve

late we last levels it a the opportunity and the control in ground of is is some - the that issues development wider and Creek. us, actually couple sill pillar year. started Bell zone at lower what on for an So seeing stopes the mining next there is are of instabilities we The of

we get So we lower pillar, support, of the because controls development, will. down greater ground sill around are into you greater slow had monitoring that if activity, mining to to seismic anxious to put the greater

And the area. that slowed in so it down mining

is took late us down that what year. So last

last advancing zone indicated next the year, this down. wider on that As we we is levels are

rates these we And to midyear those are those while, future. the to we tonnage year combination with to support, factors two anxious and that this the sill into sequencing redesigning are avoid having our pillars back to in get of to try problems so get up. the avoid mining towards all the the And

Trevor Turnbull

a Okay. And on then quick maybe just costs. question

of others, down costs forward. going cost segment La at of and about have Colorada, the Your obviously, Manantial. the guidance you exception But talked you lowered silver the operations, went with many actually the

have your base kept assumptions metal You unchanged.

was curious that So be what is factor. just I better to doesn’t those seem the driving numbers.

Robert Doyle

the credits all. is haven’t Yes, helping that, changed seeing metal Doyle bit guidance Yes, base is factor the which that. of at our byproduct metal a main which strong through, Trevor. base we Rob behind And here. we are coming production,

the side, So we is really where seeing it the on are benefits. byproduct

Operator

Demarco National Bank The Don next with question Financial. is from

Don DeMarco

gold see. see Okay. has with coming guidance of the Shahuindo. out or I seasonal back-end some Can will at been the I the we remind softer confirm you maybe the running impacts look production see which But just start changed, which an to great accentuated of did Shahuindo Shahuindo also below already I Maybe Timmins, my expectations for When discussed on hasn’t to off year? seems is rate. me loaded about run call. the be on Yet

Steven Busby

is Don, Steve. Yes. this

of mine that we sequencing, grain, and is encountered of the got more in QX anticipated. is rock to kind now, finer we more than our of for leaching. clay-like in new had into to we phase happened And our what the blend the with opening pit. on it mine, new And enough So current good leach materials before right objective place we that have this ensure didn’t quality permeabilities we section material the good rock pad

stockpiled, So XXX,XXX we said, have Michael as tons.

that stockpile anticipated. wasn’t the what during of quarter XX-XX% So mined about into went we

rock blend that will the able up it As to pick rock we it the the heap. be into that with get and on stockpile put section of pit, in we and better

our why expanded rates expect work the year way as So is this through year. at production we we Shahuindo that

Don DeMarco

performance and way indications supply is requirements returning do or the impacts is that you maybe just I regard to get that chain the COVID the addressed are to color distancing ground appreciate that Michael of more be operations. focus Like granular, measures is the it is the or causing had question a on slowdowns? can the what of But great. about implemented? production it what little bit this by Okay. whatever social and And That is that have weighing, then the to provided with being underground issues a on level impacting the vaccine other

Steven Busby

again. Yes, Don, this is Steve

we the camps and easily. we One camp our of things have the the we mines, big we that factors capacity. really out enough spread is construction big and open In underground deployment have have camp during spread find with flexibility limiting that mines, those operations off of didn’t underground at like pretty to have we camps. that can an in personnel space, that And in these COVID excess pit the everybody in had to everybody

picked testing predominantly, we have at epidemic that I our some building up mentioned is some we of been mines like also been as as have been in the seen, don’t that through earlier, the spikes around regions underground But the constraint. many mobilize excess in know is And La really capacity operations. And our that I people. why, underground We camp of the we Colorada.

an just We people pass there occurring. a screenings of epidemic finding is lot when don’t those are

our is to deploy and reduced there. workforce ability it our So

relieve think production not So work, we vaccine with they many people of that screen that how we distancing come and some why rollout, enhance once capacity can the is more is predict we as then and our in year out our will through it. camps physical really to open that as the

Michael Steinmann

the more well, example, as La drill - where the PEA. side, only for requires That here I for going on the is, will Colorada, the for skarn people infill not in site. many programs exploration, on large very we for weigh for drilling, but have for

complicated to gets more Steve the a tested. of many data can help the when more for Everybody us you that contractors, everything have lot obviously, specialists gets more As PEA. collect site, And said. on as imagine, you people

screening. pass don’t people Some

all this is I that when there suddenly we that what map outbreaks. definitely the coming So countries We is at where said, from virus you complications are I last over you bigger off in now And have third there Canada, region is when look bigger region just the moves We as country where wave, around on experienced are outbreaks. guess. years. sides as a big, kind in see of now country see or the to you

same So in happens the Latin thing America.

see are the but we about rollouts asked I all working, everywhere slowly, and vaccine the we countries vaccine believe. happening You in

are Some quicker.

vaccine. We see and a vaccine effectiveness, bit the the Obviously, statements it seems of on the effectiveness very a the in that are make what slower. a have I rest happened that that I important high can’t vaccine. that that in see the just on countries U.K., in of see in U.S. large Israel, world, rate Some can effectiveness very

we I starting the the are in it that also see gripping the see we And countries in think as Latin here globe would obviously America. I working and around Canada assume we in same well.

to rollouts. vaccination So that was comment the with referring what my really I was on

Don DeMarco

update some this Okay. that And drilling is significant, La Colorada night. released the last and financials catalyst to skarn shifting quite over you the a is question. final my is Certainly, with

somewhere or hits really an the something reported implications zinc what zones on proximity appreciated. X% there you that do or what you over would be How XXX equivalent high-grade calculate high-grade This around is on we some color find additional are I getting hole average XX.X% whatnot? this So potentially to like are grade, was the above on highlight sequencing the order And this? on of infrastructure, a see particular highlight any - intercepts. meters. as other that what is Just

Christopher Emerson

are No, Yes. Yes. infill I here. mean obviously is it we drilling. Don, Chris

hoping were we So to to get commerce. Sure. going plan high-grade, inverted so all this in is

previously specifically It it dissipated come and very where where is holes to you XX intrusive. (Ph) that is and is the was the and to close up mentioned, drill which [exo-skarn] core, got those the have we of relating are fluids in out. then one this sort have is As

is core, PEA is we to are So really to emphasis and the high-grade grade on expecting around where higher all be is going which these this the the areas. drilling see happening infill

we out breccia. the As West, into of the more the to go we move off

are the where this expecting see and those in and grades. is this between to high intrusive, is the So we breccia

expansion project we the U-XX, is additional see certainly as the out forward. set we beyond the going Specifically, started for which breccia on and really for to of this pleasing then skarn, team

Michael Steinmann

Yes.

impressive. weighing here, it too. mean, in Just really is I

Of it what identify that, drilling will you before. that not West to said area missed the finding that shouldn’t areas that are and in of course, passing did those infill when use wide look breccia, Chris we Southwest, high-grade step-out the PEA. for the yes, is and be at that we skarn holes about the or intercepts But more actually

resource. press already over in infill the in drilling XXX release, focus now we tonnes have we because on of million the I said the call As and do right

advance that continue minimization drilling and yet how definitely it know but PEA, far to we still skarn can West. like currently So it the looks intercepts. to wide the high-grade there hitting will don’t are We actually we

Chris as of expand available wait PEA, information to his to I’m and for current further So the the and West the size the wide there. resource. it the have we open is And team explore sure can’t as soon

Don DeMarco

Okay.

me. That good rest luck, for of is the and year. all costs in production rebounding Okay. through And the

Operator

Bank The next Securities. question of is from America Winder with Lawson

Lawson Winder

for and Steve you Thank Michael, team. update, the

to that very And confident La confidence sound ventilation resolved. that will at the You get sense issues Colorado me. makes perfect

drill I just in it and to with And about just ask, impacts we up you current talked have - working? a a long timing running know the to Colorada? little just what like mine bit have And around how that. down lot there to of maybe would I is and However, ventilation terms more. much with current La how could just ventilation continue at cost you and

Steven Busby

the CFM us what limits Currently, whole X,XXX to Lawson. we tonnes extracting in round numbers, through Yes. are operation. Thanks, XXX,XXX to capacity. And is per X,XXX that about day the

We we We flow that quite Again, is grade. continue ventilation access have to It don’t reserves operate is it see for can can plenty any that. at a we levels that. lower while. just that, within future that constrictions of the at rate of

raised levels adequate down at enough. the ventilation again, didn’t them. XXX,XXX of to others, and to in ventilation X,XXX tonnes to one about historically up time. the is we highlight eroding All And air or As conditions up we mining were support any open We They of holes to didn’t We Colorada raises want simply CFM is La volcanic were are flow bore. were of a put Colorada. blocked, at this we rates equipment I low The some people higher new fine. And a over the these see the held the it together La at any be dacite the what those at which raises, that material. hoping want issue get X,XXX day. to is the

increase to rates on we the production and As increases this our humidity with body, higher have we increase, particularly deeper ore temperatures the get float deeper rates the do and have. the condensation,

air, air put So the erode. to air, starting these we hotter seeing as through we in raises wetter more dacites, are them

this we I term, this for has tool forward the long has this clearly, lot - kind been infrastructure would learning as say to look develop a us because have for great So material skarn. of skarn, to a of we the been through

to and have anymore have skarn can’t project. - we fully to unlined to through valuable that aligned learned here We dacite And have forward that we have have supported is we raises. as immensely look what material. this we you raises learned So

With blind have raises. the technologies the to the even And shaft and potentially need we skarn. production so we are well rates flow rates excavations of the at need and that going we do looking keep get this those, to we the big into we future is skarn operation that that alternative all why confidence

Michael Steinmann

work, the of raise million. $X we we around going think Larson, all the believe about on this with to additional are million probably I With $X.X probably you asked them. cost range. be started I the

learned, the a bigger because line, even the shaft some cause diameter it the meters is confidence shaft obviously But So can blind problems. extraction, much Steve working in fully for concrete line, which you use large that of with we right. XXX that we over X.X lower It lined five that is And diameter, cost. shaft. built the excavation, for concrete that we that grouting, told I fully is meters, it think, the the is long a solution day. have is We XXXX, extraction that for ore. use we as every

much, La to. cost, we comes So higher we build we that that skarn at of that that. look And much at Colorada and is is it when heading can where know larger a but course, throughput at probably

Lawson Winder

color. Okay. great is That

So the is existing incremental just small. to the raises in additional cost actually shotcreting the do quite

the were ventilation to a Now be cost take the of completed most incremental the if cost, future to Just or you what for blind that blind raise? cost the all first to would sorry, if a you would the shaft, or fully what raises cost recently had go blind ventilation? versus be existing

Steven Busby

new that include blind well. the to It are about million the bypass the raise we shotcreting clarify, of shaft talking just does is bores and alone. as just an And yet. development done not $X we the But Yes. haven’t estimate

diameter, to shaft on head We existing lined. up right all meter is what fully what fully I That X.X Michael diligently XXX and the the working is our the with that shaft, which meter a hoist gear, point is shaft, can is equipped frame. brought But now. deep are concrete

million wouldn’t $XX look in we shaft. lining just we the XXXX, the But concrete shaft, about for would to blind all do a that be XX-months excavations. doing the XXXX It in we that and the everything was it once mean shaft I did that So to started without hoist background. ventilation at

hoist have handling, rock for to but to gear at estimate the head frame, I’m out the without all we give this don’t is time. clearly, going that So be prepared an less, it and yet

Michael Steinmann

skarn production we is for sure, at the need, of for but and for from the look current deep diameter, ventilation Colorada, for kind ventilation very and that increased of future veins this course, of this shaft large long you shaft development if partial the diameter And big tonnage. from will for not La much infrastructure, huge kind production and only the for

of first the it, So I development. of or a that working would the call towards on skarn step, kind mine expanding is

Lawson Winder

Yes.

I’m of question Okay. grade is Steve, you guessing color. reserves? lower my reserves or the response quarters That to say you original you were great in just in question And that when opposed last as my front. Then, mentioned of in are there lots that lots talking to fact, years

Steven Busby

Yes, years, yes.

Lawson Winder

Okay.

Okay. that of confidence. Well, gives certainly me quite a bit

Michael Steinmann

forget, of a have in from reserves yes, XX-years we think and the midyear at a about believe, XX-years his Obviously, is we the But of I do of year. about currently, deeper slice just ahead Don’t Chris I veins veins, resource around reserve we team similar a year, down like who update our every that now every we out are of us, and with reserve sitting will in and probably amount into reserves. converting years come resource. resources

Lawson Winder

avoid best EQ the necessary and that you be drilling clay so and Okay. it doing hopefully model to the clay, possible and you finally future? is as the have understand perhaps Great. that then might guys And just started can clay, now in controls predict of where other the on out it on and to sort as you where

Steven Busby

we We started to extensive Lawson. design we program this of the geotechnical that what did do before drilling implemented. Great That an raise. amount Yes. led pre-grouting is question, us

not we from to material. just very we the erratic. way intermixed could we of have it and to material deal further is bypass have se of them. out zones per away the gets it to move Unfortunately, kind only is it as it where And kind a is. way move going east, worse, are They clay map to able or the figure is been with. kind they of That are to are We

Lawson Winder

raises. about discussion concreted fully the doing hence, potentially And Okay. blind

a up, right. Okay. your time guys. lot very That clears Thanks All today. That makes much, appreciate sense. and I

Operator

from Thompson BMO. with is question next The Ryan

Ryan Thompson

in a of give brought there call disclosure was legal social, Just at Could a side it, sort of on that the proceeding things. I noticed you of, a legal couple questions Escobal. your just political, recently us the on color of for that? Or bit delays is sort little to process? of parallel if this legal XXX of potential in any would consultation sort and on run that, ILO proceeding there

Michael Steinmann

call, new is of pre-consultation. we delay what about maybe you should start month. April. started. for think, to for Yes. people pre-consultation a it as Because for it case, Guatemala planned delays, I And the I our reason five-days that, have week of have government Christopher the was that probably this quarter, large limiting really really see happened and for course, last on a pass a before planned really really the travel. I a know of congregations or of on that decree government with, will put and it now well. then last don’t later the And out not could on announced Lemon It and was is meetings The the in proceed pre-consultation.

took was grip. Guatemala second So wave that we there, it due seen in have second really the to of wave covet a strong yes, that probably the

So that delay. the reason for really was the

It later for is issue that this month We have really go we this I hopefully don’t And now. time. are really last as into forward this looking seen delay. pre-consultation, reason see really COVID-related to another

Christopher Lemon

that Silver. a deal American with claim we Escobal. General community Pan Ryan, is all it of our mount with lot a operations. is and small defending This we it. any impact near is Christopher And with with Lemon. problems by our Counsel claim it foresee deal will I’m like the defenses, don’t certainly and consultation it and throughout won’t the of And process, we claims

Ryan Thompson

it. Got

over just Obviously, on it front the And Peru. is seems and switching a narrative changing then to the day, political every there to lot maybe be seems. Okay. chatter of there

you seeing election on provide on of upcoming you what if ground the wondering in could or from on of sort Just hearing comment the June. any boots sort Peru are in early

Michael Steinmann

process, we work obviously, are government, in Well, that case, elect country. is is we leader the we leader, next and and XXXX, outgoing start a good Peru are the population of normal always the just their with every and a and mean, I general, administration. Peru the long, we or five-years we And of will look, work, in democratic long think where, Peru a this was since a elections since time place, the the with new place I it will have everywhere it in same the new to four good working, depending And way we on company. the work are

predictable So the elections not. polls globe, polls I can’t don’t you day can can looking it about actually give you - all across obviously, discuss long. not. are around look at or We or I the know, at how

not their just I’m to electing my see be. said, the we happens. And the and So hands in obviously make this is of will because predictions leader it population here wait proven what next going should as I as

Ryan Thompson

two? Arena I is looking know sort La just maybe it or give can us you on some And here. selling copper of you before. increased you then there any that? Okay. just thought good update just any been lastly, interest sort obviously, of seeing are prices Can on update pretty potentially provide of Are

Michael Steinmann

Sure.

world of one, is going Of where a economy. see people in have in I strong a going the we of - lot that after course, the It lot I’m a copper. recovery is and thought that the interest only it not pandemic here obviously

also in require will battery essential of will as will clean always all have towards for of It large metals course, production. of a had, it of silver. the post require, a electronics, and a world, the as be here lot which energy will require I But lot copper. electrification We the lot a Silver well.

is think, ongoing. demand we are going to go, strong it where thought see it that and is we So going I doing think to I

the the pandemic, as have very investment nicely, the the for in You and demand saw actually from jewelry Silver is side saw a side. record where recovering last we silver side it that the and probably industrial side expected year, was but big Institution ETPs due in the inflows on while to saw would I on decrease report the we not actually the for and obviously

So it silver that of right the sits my is course, where now. reason is price

production very that are shared Arena, oxide. update many Looking we drilling at La sitting at on more already We reserve at we more I to get and at least keep reserves. are midyear we gold another interesting be still the the still announced But think gold that It times will there. the of there. three-years well, finding now, from the right - I

prices, road below. advancing the over reserves and So of further further definitely away of we are years But the probably down parallel is porphyry we that La can expected. on divestment possible sulfides the plan a much, still the the the as in down Arena sense, project project, a at quite project much have copper to interest longer road side different than oxide And as bit with and obviously, look much will there and the initially porphyry, which you we is in longer coming more diligently exploration advance side from a our define, in we like from the the production imagine. is how on the the

Operator

remarks. This Michael like concludes conference back over the question-and-answer I the now for to Steinmann turn session. would closing to

Michael Steinmann

for much you calling Thank very in today. you, much. Thank

which to forward summer. on August, update in our Looking QX in results, you somewhere will be

forward So very to stay in Thank months. catch safe, healthy and a you looking much. up stay few

Operator

conference This concludes today’s call.

for day. your you disconnect Thank pleasant a participating, may lines. and You have

Pan American Silver (PAAS) 13 May 212021 Q1 Earnings call transcript