Mr. Michael Steinmann reports

PAN AMERICAN ANNOUNCES DIVESTMENT OF MARA, MOROCOCHA, AGUA DE LA FALDA AND NON-CONTROLLING EQUITY INTERESTS

Pan American Silver Corp. has provided an update on the status of its divestment of certain non-core assets, including the sale of the company's interest in the Mara project in Argentina, the Morococha mine in Peru and the Agua de la Falda project in Chile.

"The sale of these non-core assets is aligned with our stated aim of optimizing our portfolio following the Yamana acquisition. These transactions not only reaffirm our commitment to our core business but also yield substantial and immediate value to our shareholders while maintaining future upside through the retention of copper and gold royalties with strong counterparties," said Michael Steinmann, president and chief executive officer of Pan American. "The consideration for the sale of Mara, coupled with the other sales, will yield total cash proceeds of $593-million (U.S.). The cash proceeds will allow us to both fully repay the amount drawn on our credit facility and increase our cash position, further enhancing the resilience of our balance sheet. These transactions will also allow Pan American to reduce its annual project development, reclamation and care and maintenance costs, which, for Mara and Morococha, amounted to $15.7-million (U.S.) in Q2 2023. This improved balance sheet strength creates enhanced opportunities for the company, providing increased capital to advance key strategic projects, including the La Colorada skarn project."

Mara

Pan American has entered into a binding agreement to sell its 56.25-per-cent interest in the Mara project, located in the Catamarca province of Argentina, to Glencore International AG. Pan American acquired its 56.25-per-cent interest in Mara through its acquisition of Yamana Gold Inc., which closed on March 31, 2023. At present, Glencore holds a 43.75-per-cent interest in Mara, and, upon the completion of the transaction, Glencore will assume 100-per-cent ownership of the project.

Mara was initially established as a joint venture in December, 2020, amongst Yamana, Glencore and Newmont Corp., following the integration of the Minera Alumbrera plant and mining infrastructure and the Agua Rica project. On Sept. 23, 2022, Glencore announced that it had acquired Newmont's 18.75-per-cent interest in Mara, thereby increasing its ownership in the project to 43.75 per cecnt, at that time.

Under the terms of the agreement, at closing, Glencore will pay $475-million (U.S.), in cash and will grant Pan American a life-of-mine copper net smelter return (NSR) royalty of 0.75 per cent, with the right for Pan American to freely transfer the royalty.

Mara feasibility study, reclamation, and care and maintenance (C&M) costs for the project for the three-month period ending June 30, 2023, amounted to $11.5-million (U.S.) for Pan American's portion. Future C&M costs will be eliminated upon closing of the transaction. Pan American estimated Mara feasibility study, reclamation, and C&M costs for the project of $60-million (U.S.) to $65-million (U.S.) on a 100-per-cent ownership basis for 2023, as per the company's guidance provided on May 10, 2023.

The closing of the transaction is subject to customary conditions and regulatory filings. Pan American expects the transaction to be completed in the third quarter of 2023.

Morococha

Pan American placed the Morococha mine on C&M in early 2022, while it evaluated alternative strategic opportunities for the asset following the closure of the Amistad processing plant, pursuant to an agreement with Aluminum Corp. of China (Chinalco). As previously disclosed, in June, 2010, the company finalized a framework agreement with Chinalco that entailed the relocation of core Morococha facilities, including the Amistad processing plant, in stages, to facilitate the incremental expansion of Chinalco's Toromocho open-pit copper mine.

On June 19, 2023, Pan American entered into a binding agreement to sell its 92.3-per-cent interest in Compania Minera Argentum SA (CMA), its Peruvian subsidiary that owns the Morococha mine, to Alpayana SA, also a Peruvian mining company. Alpayana owns a number of operating mines in the region.

Under the terms of the agreement, Alpayana will acquire the shares of CMA in exchange for a cash consideration of US$25 million, payable upon closing of the transaction. The completion of the transaction is subject to customary conditions and regulatory approval from the Peruvian National Institute for the Defense of Competition and Protection of Intellectual Property. Pan American expects the transaction to be completed in the third quarter of 2023.

C&M costs for the Morococha mine for the six-month period ending June 30, 2023 amounted to US$13.2 million. Future C&M costs will be eliminated upon closing of the transaction.

As a result of this executed agreement, the net assets of CMA, including the Morococha mine, will be classified as "held for sale", and accordingly will be presented separately under current assets and liabilities in the Company's second quarter 2023 unaudited interim consolidated financial statements. Further, a net of tax impairment charge of US$33.3 million (US$42.4 million pre tax) will be taken to the CMA net assets.

Agua de la Falda

Pan American has entered into a binding agreement with Rio Tinto Mining & Exploration Ltd. Agencia en Chile SPA ("Rio Tinto"), a subsidiary of Rio Tinto Limited, to sell its 57.75% interest in Agua de la Falda S.A. ("ADLF"), a Chilean company that holds the historical Jeronimo project, located in the Atacama region of northern Chile, as well as several adjoining concessions, that are indirectly wholly owned by Pan American. Pan American acquired its interest in ADLF through its acquisition of Yamana. The remaining 42.25% interest is held by Corporacion Nacional del Cobre de Chile ("CODELCO").

Under the terms of the agreement, Rio Tinto will pay US$45.55 million, in cash, upon closing and will grant Pan American a NSR royalty of 1.25% on all precious metals and a NSR royalty of 0.2% on all base metals, on a pro rata basis in accordance with the interest acquired by Rio Tinto, on production from certain mineral concessions.

The closing of the transaction is subject to the execution of definitive documentation and customary conditions. No regulatory approvals or filings are required. Pan American expects the transaction to be completed in the third quarter of 2023.

Equity Interests

During the second quarter of 2023, Pan American divested of a number of non-controlling equity investments for a total consideration of US$47.1 million.

About Pan American Silver

Pan American Silver is a leading producer of precious metals in the Americas, operating silver and gold mines in Canada, Mexico, Peru, Bolivia, Argentina, Chile and Brazil. We also own the Escobal mine in Guatemala that is currently not operating, and we hold interests in exploration and development projects. We have been operating in the Americas for nearly three decades, earning an industry-leading reputation for sustainability performance, operational excellence and prudent financial management. We are headquartered in Vancouver, B.C. and our shares trade on the New York Stock Exchange and the Toronto Stock Exchange under the symbol "PAAS".

Learn more at panamericansilver.com.

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