Mr. Michael Steinmann reports

PAN AMERICAN ANNOUNCES PRELIMINARY ECONOMIC ASSESSMENT OF THE LA COLORADA SKARN PROJECT

Pan American Silver Corp. has released the results of a preliminary economic assessment of its 100-per-cent-owned, long-life La Colorada skarn project in Zacatecas, Mexico. (All amounts are in U.S. dollars unless otherwise indicated.)

"Our objective is to provide investors with exposure to silver, and the La Colorada skarn provides that exposure in scale, with annual silver production estimated to average 17.2 million ounces during the first 10 years. It is also expected to produce 427,000 tonnes of zinc annually during that period, which we anticipate would coincide with decreasing zinc supply in the market. Given the volume of base metals in the deposit, Pan American is assessing interest from base metal producers and other capable parties to explore long-term partnerships to develop this polymetallic project, allowing Pan American to focus on the large amount of anticipated silver production," said Michael Steinmann, president and chief executive officer of Pan American.

"Discovering a deposit of this magnitude beneath our currently producing La Colorada mine is an exceptional opportunity to create long-term value for our shareholders. The mineral resource update released today does not include any drill results from 2023, which will continue to expand the resource envelope and provide opportunities to enhance the life-of-mine economics," added Mr. Steinmann.

Conference call and webcast

Pan American Silver will host a conference call and webcast relating to La Colorada skarn PEA.

Date:  Dec. 19, 2023

Time:  11 a.m. ET (8 a.m. PT)

Dial-in numbers:  1-888-259-6580 (toll-free in Canada and the United States) or 1-416-764-8624 (international participants)

Conference ID:  63145755

A webcast will be available.

The live webcast, presentation slides and a video of La Colorada skarn geology will be available. An archive of the webcast will also be available for three months.

Project highlights:

• The PEA for La Colorada skarn project envisions development of a mine, utilizing a 50,000-tonne-per-day sublevel cave (SLC) mining method, reached through decline ramps and two ventilation shafts; initial development would be undertaken over a six-year period after permitting; a conventional 50,000-tonne-per-day-capacity selective zinc and lead flotation processing plant and dry-stack tailings facility would produce silver-bearing mineral concentrates at an average rate of 2,003 tpd of zinc concentrate grading 59 per cent zinc and 846 tpd of lead concentrate grading 61 per cent lead;
• The estimated average annual silver, zinc and lead production would be 17.2 million ounces, 427,000 tonnes and 218,000 tonnes, respectively, during the first 10 years of production;
• Estimated 17-year life of mine, which does not take into account the 2023 drill results that were disclosed in Pan American Silver's news releases dated May 3, 2023, and Dec. 5, 2023;
• Metallurgical testwork programs conducted included mineralogical analysis, detailed comminution, flotation, and thickening and filtration of the tailings; the flotation concentrates produced from the proposed processing plant are expected to be high-grade, high-quality zinc concentrate and high silver-bearing lead concentrate, and are therefore readily marketable; LOM average zinc recovery of 93.7 per cent with concentrate grading 59 per cent zinc and 97 grams per tonne silver along with lead recovery of 84.3 per cent with concentrate grading 61 per cent lead and 1,438 g/t silver, yielding an overall silver recovery of 84.8 per cent with 72.5 per cent reporting to the lead concentrate;
• The unit operating cost (including mine, mill, and general and administrative costs) averages $40.88 per tonne over the LOM; the unit operating cost when at full production averages $38.50 per tonne;
• Estimated initial capital cost of $2,829-million over a six-year construction period, with peak spending in years four and five, when the mill is being constructed; the payback period of the initial investment is expected to be 4.3 years; the current La Colorada vein mining operation would continue during the skarn construction and development period;
• Total LOM sustaining capital estimated at $951-million;
• Cumulative after-tax cash flow of $5,689-million;
• After-tax net present value of $1,087-million at an 8-per-cent discount rate with an after-tax internal rate of return of 14 per cent, an NPV of $1,572-million at a 6.5-per-cent discount rate and an NPV of $2,182-million at a 5-per-cent discount rate, using average LOM metal prices of $2,800 per tonne zinc, $2,200 per tonne of lead and $22 per ounce of silver;
• The proposed SLC mining method has been identified as a technically viable method of developing the skarn deposit; further extension and definition of the mineralization could complement and expand the initial SLC mining inventory; expanded SLC and block cave mining methods will be further evaluated in future studies;
• The PEA for La Colorada skarn project is based on the mineral resource estimate as at Dec. 15, 2023, which reflects 242,000 metres of drilling; the geological model was completed in December, 2022, and neither the mineral resource estimate, nor the PEA includes the more than 40,000 metres of drilling that was completed during 2023; further exploration and infill drilling is aimed at expanding the current mineral resource envelope, and is expected to be reflected in an updated mineral resource estimate in mid-2024;
• La Colorada skarn is located below and adjacent to its currently producing La Colorada mine on the company's existing mining concessions; Pan American Silver owns the surface rights required for the facilities envisaged in the PEA and owns the mineral concessions in which the mineral resources included in the PEA are located; Pan American Silver has also negotiated preliminary terms for a joint venture arrangement on certain adjacent mineral concessions, which would allow it to utilize these concessions for the proposed skarn project and present further opportunities for exploration and project expansion;
• Permits would be required to develop an SLC mine, a new processing facility, a dry-stack tailings facility and other surface infrastructure; some existing permits are expected to benefit the skarn project in development and operations; the skarn project will also likely be subject to additional authorizations, consultations and agreements in the normal course of business, as well as other risks and uncertainties;
• The use of existing La Colorada site infrastructure for the skarn project will be included as part of the design where it is practical to do so; the design of the new facilities and the underground mine will focus on the application and incorporation of automation, electrification, energy efficiency and the use of renewable energy sources to minimize the carbon footprint of the skarn project.

An updated technical report, prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects on Pan American Silver's La Colorada property will be filed with Canadian securities regulators within 45 days of this news release, and will include the PEA on La Colorada skarn project. The technical report will be available under the company's profile on SEDAR+ and at the Pan American Silver website.

Sensitivity analysis

The attached tables provide sensitivities for NPV (8 per cent) and NPV (6.5 per cent) at various silver and zinc prices and based on a production capacity of 50,000 tonnes per day.

Pan American also considered an alternative development scenario based on a 30,000-tonne-per-day production rate. The initial capital was reduced appropriately, and the unit operating costs were increased to reflect the lower throughput. The result was an after-tax NPV (8 per cent) of $498-million and an internal rate of return of 10 per cent. Due to the superior economics, the 50,000-tonne-per-day production case was the preferred scenario in this PEA. Pan American Silver will continue to evaluate development options and opportunities to enhance the life-of-mine economics.

Estimated mineral resource

The indicated mineral resource is estimated to total 173.6 million tonnes containing 183 million ounces of silver, 4.8 million tonnes of zinc and 2.3 million tonnes of lead. In addition, the inferred mineral resource is estimated to total 103.6 million tonnes containing 116 million ounces of silver, 2.6 million tonnes of zinc and 1.1 million tonnes of lead. The mineral resource estimate is based on a $50-per-tonne net smelter return and the caving constraints and geometry for an underground SLC mining method.

General notes with respect to technical information

The drill hole samples were prepared by the internal La Colorada mine laboratory, SGS of Durango, Activation Laboratories Ltd. of Zacatecas, Bureau Veritas of Hermosillo and ALS Global, Mexico. The SGS, Actlabs, Bureau Veritas and ALS Global laboratories are independent from Pan American Silver. Pan American Silver implements a quality assurance and quality control program, including the submission of certified standards, blanks and duplicate samples to the laboratories.

Actlabs, SGS and ALS Global all used fire assay with gravimetric finish for gold, and acid digestion with ICP finish for silver, lead, zinc and copper. Samples delivered to ALS Global were prepared in the Zacatecas, Mexico, laboratory and sent to the Vancouver, B.C., laboratory for assay. Bureau Veritas used fire assay with gravimetric finish for gold and acid digestion with ICP finish for silver, lead, zinc and copper in its Vancouver, Canada, laboratory. La Colorada mine laboratory, which is operated by its employees, used fire assay with gravimetric finish for gold and silver and acid digestion with atomic absorption finish for lead, zinc and copper.

The results of the QAQC samples submitted to SGS, Actlabs, Bureau Veritas, ALS Global and La Colorada mine laboratory all demonstrate acceptable accuracy and precision.

The qualified person for the mineral resource estimate is of the opinion that the sample preparation, analytical and security procedures followed for the samples are sufficient and reliable for the purpose of this news release and for the purpose of any future mineral resource and mineral reserve estimates. There were no limitations on the qualified persons' verification process. Pan American Silver is not aware of any drilling, sampling, recovery or other factors that could materially affect the accuracy or reliability of the data reported herein.

See the company's annual information form dated Feb. 22, 2023, available at SEDAR+, or Pan American Silver's most recent Form 40-F, filed with the U.S. Securities and Exchange Commission, for further information on La Colorada mine, including detailed information concerning associated QAQC and data verification matters, and the key assumptions and methods used by the company to estimate mineral reserves and mineral resources, and for a detailed description of known legal, political, environmental and other risks that could materially affect the company's business and the potential development of the company's mineral reserves and mineral resources.

Technical information contained in this news release with respect to the PEA and La Colorada mine has been reviewed and approved by Christopher Emerson, FAusIMM, vice-president, exploration and geology, and Martin Wafforn, PEng, senior vice-president, technical services and process optimization, each of whom is a qualified person for the purposes of National Instrument 43-101 (Standards of Disclosure for Mineral Projects). Pan American Silver is authorized by the Association of Professional Engineers and Geoscientists of the Province of British Columbia to engage in reserved practice under permit to practise No. 1001470.

About Pan American Silver Corp.

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. It also owns the Escobal mine in Guatemala that is currently not operating, and it holds interests in exploration and development projects. It has been operating in the Americas for nearly three decades, earning an industry-leading reputation for sustainability performance, operational excellence and prudent financial management. It is headquartered in Vancouver, B.C., and its shares trade on the New York Stock Exchange and the Toronto Stock Exchange under the symbol PAAS.

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