Pan American Silver Reports Large Increase to the Mineral Resource Estimate for its La Colorada Skarn Deposit
Pan American Silver Reports Large Increase to the Mineral Resource Estimate for its
La Colorada Skarn Deposit
Vancouver, B.C. - Sept. 14, 2022 - Pan American Silver Corp. (NASDAQ: PAAS) (TSX: PAAS) (“Pan
American”, or the “Company”) today announced an updated mineral resource estimate for its 100%
owned La Colorada Skarn deposit in Zacatecas, Mexico. The estimated indicated mineral resource
totals 95.9 million tonnes containing 94.4 million ounces of silver, 2.7 million tonnes of zinc and 1.2
million tonnes of lead. In addition, the estimated inferred mineral resource now totals 147.8 million
tonnes containing 132.9 million ounces of silver, 3.4 million tonnes of zinc and 1.5 million tonnes of
lead. The updated mineral resource estimate is a significant increase relative to our previous mineral
resource estimate released on August 4, 2020.
The mineral resource estimate is based on a US$45 per tonne unit cut-off value and an underground
sub-level cave (SLC) mining method followed by processing through a selective flotation beneficiation
plant that generates zinc and lead concentrates.
“Our exploration team has done a remarkable job of delineating a large resource with notable growth
potential in only four years. Our confidence in the geology has also improved, resulting in a large
portion of the deposit now being classified as indicated resources," said Christopher Emerson, Pan
American's Vice President Business Development and Geology. "Notably, the high-grade intersects we
announced on July 21, 2022 are not included in today's mineral resource estimate, and the deposit
remains open in nearly all directions for further resource expansion."
Michael Steinmann, President and CEO, said: "The prospect of an extensive polymetallic deposit
located below our largest and highest-grade silver mine is very promising, and based on its size, we
believe the Skarn could provide Pan American with production for many decades."
"Our next steps to advance the project involve incorporating the most recent drill results and high-
grade intersects into the resource model, and continuing the development of preliminary project
engineering studies. Our aim is to release an updated Technical Report on the La Colorada property in
2023 that includes a preliminary economic assessment of the Skarn deposit," added Mr. Steinmann.
Estimated Mineral Resource
Classification Cut-off Value
(US$/tonne)
Tonnes
(millions)
Zn
(%)
Pb
(%)
Ag
(g/t)
Indicated 45 95.9 2.77 1.28 31
Inferred 45 147.8 2.29 1.04 28
Notes:
1. Estimation and reporting of mineral resources were carried out in accordance with CIM guidelines.
2. Mineral resources have reasonable prospects for eventual economic extraction demonstrating sufficient spatial
continuity of mineralisation constrained within a potentially mineable shape. No mineral reserves are reported at
this time.
3. Prices used to report mineral resources were: US$22 per ounce of silver, US$2,800 per tonne of zinc and US$2,200
per tonne of lead.
4. An estimate of mineral value per tonne was calculated using metallurgical recoveries of 87.4% Ag, 88% Pb and 93%
Zn with mineral concentrate qualities of 67% Pb in lead concentrate and 60% Zn in zinc concentrate, obtained from
metallurgical testing. Estimates for transport, payability and refining/selling costs, based on experience and long-
term views of the marketing, treatment and refining of these types of mineral concentrates, were included.
5. Reasonable prospects for eventual economic extraction were assessed by determining the total in-situ tonnes and
grade constrained inside volumes that are based on a bulk style sub-level caving underground mining method. The
tonnes and grades are inclusive of the must-take low grade material within the volume, as per CIM best practice
guidelines. No other mining dilution or mineral losses have been accounted for. A US$45 per tonne operating cost
has been assumed, which includes estimates of mining, processing and G&A operating costs.
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PAN AMERICAN SILVER CORP.
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6. This mineral resource estimate was prepared under the supervision of, or was reviewed by, Christopher Emerson,
FAusIMM, Vice President Business Development and Geology, and Martin G. Wafforn, P.Eng., Senior Vice President
Technical Services and Process Optimization, each of whom is a Qualified Person as that term is defined in National
Instrument 43-101 (“NI 43-101").
7. The effective date of the mineral resources estimate is September 13, 2022.
The La Colorada Skarn is a large underground mineral deposit, and a range of mining methods is being
considered for its extraction. The mineral resource estimate provided in this news release considers
using the bulk SLC method throughout the deposit. However, the table below is provided for
comparison purposes only to highlight how the mineral resource estimate would change using
potentially mineable shapes and cut-off value estimates specific to two alternative mining methods.
Applying some combination of these mining methods to the mineral resource may prove economically
and technically optimal, depending on geometric, geographic and geotechnical factors specific to
different areas of the deposit.
Mineral Resource Estimate at Different Cut-off Values and Mining Methods
Mining
Method
Cut-off
Value
(US$/
tonne)
Classification Tonnes
(millions)
Zn
(%)
Pb
(%)
Ag
(g/t)
Zn
(Mt)
Pb
(Mt)
Ag
(Moz)
Sub-level
Caving (SLC) 45 Indicated 95.9 2.77 1.28 31 2.66 1.23 94.4
Inferred 147.8 2.29 1.04 28 3.39 1.54 132.9
Sub-level
Shrinkage
(SLS)
45 Indicated 101.5 2.66 1.22 30 2.70 1.24 96.3
Inferred 153.2 2.03 0.88 25 3.12 1.34 125.1
65 Indicated 67.3 3.08 1.46 33 2.07 0.98 72.1
Inferred 60.8 2.59 1.13 30 1.60 0.68 59.8
Long-hole
Open
Stoping
(LHOS)
60 Indicated 65.4 3.39 1.62 36 2.22 1.06 75.6
Inferred 113.8 2.91 1.32 34 3.31 1.50 124.6
70 Indicated 56.3 3.62 1.76 38 2.03 0.99 68.0
Inferred 88.5 3.17 1.46 37 2.80 1.29 104.5
Notes:
1. Prices used to report mineral resources were: US$22 per ounce of silver, US$2,800 per tonne of zinc and US$2,200
per tonne of lead.
2. An estimate of mineral value per tonne was calculated using metallurgical recoveries of 87.4% Ag, 88% Pb and 93%
Zn with mineral concentrate qualities of 67% Pb in lead concentrate and 60% Zn in zinc concentrate, obtained from
metallurgical testing. Estimates for transport, payability and refining/selling costs, based on experience and long-
term views of the marketing, treating and refining of these types of mineral concentrates, were included.
3. This table has been included to reflect the sensitivity of the mineral resource to mining method, potential mineable
shapes and costs rather than applying variable cut-off values within a non-selective mining shape.
4. The inventories in the table are for sensitivity comparisons to the SLC mineral resource estimate stated above; they
do not represent mineral resource estimates in themselves.
5. All inventories are in-situ tonnes and metal contents.
Mineral Resource Highlights:
• The current mineral resource estimate is based on 190,000 metres of drilling to a drill cut-off
date of April 30, 2022. An additional 44,000 metres of drilling has been completed since the
resource cut-off date. The extensions and high-grade results that were reported in our news
release dated July 21, 2022 have not been included in this mineral resource estimate.
• The initial discovery of the La Colorada Skarn deposit was announced on October 23, 2018,
and a total of 234,000 metres of exploration drilling has been completed on the deposit to
date.
PAN AMERICAN SILVER CORP.
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• The polymetallic skarn mineralisation is concentrated in three zones, which cover an area of
1,500 metres by 1,100 metres laterally, and a depth of between 600 metres and 1,900 metres
below surface. The deposit is oriented in a north-northwest to south-southeast direction and
is below the currently active Candelaria mine workings. See Figures 1 and 2 that accompany
this news release.
• The geological model used for the resource estimate is based on 235 diamond drillholes with
drill spacing ranging from 50 metres to 80 metres. The mineral resource classification has been
based on geological criteria, estimation confidence and density of data for the indicated and
inferred mineral resource categories.
• Geological interpretation, resource modeling and mineral resource estimation were carried
out using Leapfrog Geo and Datamine software. The block model and mineral resource
estimation methodology were validated by third party consultants. Deswik mine planning
software was used to define the SLC mining shapes, in particular the "Deswik.Caving" and
"Pseudoflow" functions were integral in defining the constraining shapes. Deswik.Caving
utilizes PGCA (Power Geotechnical Cellular Automata) particle-based flow modelling
techniques and software.
• Comminution, selective flotation (rougher, cleaners, kinetics and locked cycle tests),
mineralogical analysis, sedimentation and filtration testing have shown the mineral to be
amenable to conventional crushing, grinding, flotation, thickening and filtration unit
processing. The projected Zn and Pb contents of the flotation concentrates that could be
produced are expected to be readily marketable. Further geo-metallurgical sample collection
and testing is in progress, as the deposit size continues to expand and as mining methods are
being considered that affect the expected plant head grade, and therefore potentially impact
metallurgical recovery and concentrate quality estimates.
• The SLC mining method was chosen to develop mining shapes that constrain the mineral
resource volume. The reported mineral resource is the in-situ tonnage and metals contained
within a mining shape developed at a $45 per tonne operating cost, and honours practical
cavability geometry and layouts that are at a suitable level of detail for mineral resource
estimation purposes. The mineral resource inventory does not have mining recovery or
dilution factors applied beyond the mining shape.
• Geotechnical drilling, laboratory testing and studies have been conducted with the assistance
of internal and third-party geotechnical experts to make an initial positive caveability
assessment in support of the SLC mining method.
• The Qualified Persons, as identified in the "General Notes with Respect to Technical
Information" section below, are satisfied that applying SLC parameters is practical and satisfies
the test of reasonable prospects of eventual economic extraction. It is acknowledged that
additional resource definition drilling, geotechnical studies and metallurgical testing may
change the mining approach as the project progresses and further extents of the
mineralisation are defined.
General Notes with Respect to Technical Information
A total of 235 diamond drillholes with a total length of 190,000 metres were used in the geological interpretation
and resource estimate. Several old historic drillholes were included in the modeling. Drilling of the La Colorada
Skarn deposit has been completed from both surface and underground drill platforms.
PAN AMERICAN SILVER CORP.
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All drill hole samples used in the mineral resource have been previously reported in news releases dated
October 23, 2018, February 21, 2019, May 8, 2019, August 1, 2019, October 30, 2019, February 13, 2020, August
4, 2020, May 12, 2021, November 10, 2021, February 24, 2022, and May 9, 2022.
The drill hole samples were prepared by the internal La Colorada mine laboratory, SGS of Durango, Activation
Laboratories Ltd ("Actlabs") of Zacatecas, Bureau Veritas of Hermosillo and ALS Global, Mexico. Pan American
implements a quality assurance and quality control ("QAQC") 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 Zacatecas, Mexico
laboratory and sent to Vancouver, BC laboratory for assay. Bureau Veritas used fire assay with gravimetric finish
for gold and by acid digestion with ICP finish for silver, lead, zinc, and copper in their Vancouver, Canada
laboratory. The La Colorada mine laboratory, which is operated by our 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 the La Colorada mine
laboratory all demonstrate acceptable accuracy and precision.
The Qualified Persons are of the opinion that the sample preparation, analytical, and security procedures
followed for the samples are sufficient and reliable for the purpose of mineral resource and mineral reserve
estimates. Pan American is not aware of any drilling, sampling, recovery or other factors that could materially
affect the accuracy or reliability of the data reported herein.
Mineral reserves and mineral resources are as defined by the Canadian Institute of Mining, Metallurgy and
Petroleum ("CIM").
Pan American reports mineral resources and mineral reserves separately. Reported mineral resources do not
include amounts identified as mineral reserves. Mineral resources that are not mineral reserves have no
demonstrated economic viability. No mineral reserves have yet been estimated for the La Colorada Skarn
deposit.
The Qualified Persons do not expect these mineral resource estimates to be materially affected by any known
legal, political, environmental or other risks.
See the Company’s Annual Information Form dated February 23, 2022, available at www.sedar.com for further
information concerning QAQC and data verification matters, the key assumptions, parametres 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 resources.
Technical information contained in this news release with respect to Pan American has been reviewed and
approved by Christopher Emerson, FAusIMM, Vice President Business Development and Geology, and Martin
Wafforn, P.Eng., Senior Vice President Technical Services and Process Optimization, each of whom is a Qualified
Person for the purposes of NI 43-101.
Pan American Silver Corp. is authorized by The Association of Professional Engineers and Geoscientists of the
Province of British Columbia to engage in Reserved Practice under Permit to Practice number 1001470.
PAN AMERICAN SILVER CORP.
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About Pan American Silver
Pan American owns and operates silver and gold mines located in Mexico, Peru, Canada, Argentina and Bolivia.
We also own the Escobal mine in Guatemala that is currently not operating. Pan American provides enhanced
exposure to silver through a large base of silver reserves and resources, as well as major catalysts to grow silver
production. We have a 28-year history of operating in Latin America, 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 NASDAQ and the Toronto Stock Exchange under the symbol "PAAS".
Learn more at panamericansilver.com.
For more information contact:
Siren Fisekci
VP, Investor Relations & Corporate Communications
Ph: 604-806-3191
Email: [email protected]
Cautionary Note Regarding Forward-Looking Statements and Information
Certain of the statements and information in this news release constitute “forward-looking statements” within
the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking
information” within the meaning of applicable Canadian provincial securities laws. All statements, other than
statements of historical fact, are forward-looking statements or information. Forward-looking statements or
information in this news release relate to, among other things: estimates mineral resources; the expectation of
the Company to complete a technical report, including preliminary economic assessment relating to the La
Colorada Skarn mineral resources in 2023, and the timing and results of any such assessment; the prospects of
any future production from the La Colorada Skarn deposit; the extent of, and success related to any future
exploration or development programs with respect to the La Colorada Skarn; expectations with respect to future
anticipated size of the La Colorada Skarn deposit; the selection of the ultimate mining method, if any, and in
particular, whether the SLC mining method will be utilized or used in combination with other mining methods;
expectations that legal, political, environmental, or other risks or issues will not materially affect estimates of
mineral resources.
These forward-looking statements and information reflect the Company’s current views with respect to future
events and are necessarily based upon a number of assumptions that, while considered reasonable by the
Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and
contingencies. These assumptions include: the accuracy of our mineral reserve and mineral resource estimates
and the assumptions upon which they are based, including operating costs and mining methods; ore grades and
recoveries are as anticipated; prices for lead, zinc, silver, gold, and other metals remaining as estimated; our
continued ownership and rights to the La Colorada surface properties and mineral concessions; currency
exchange rates remaining as estimated; capital, decommissioning and reclamation estimates; prices for energy
inputs, labour, materials, supplies and services (including transportation); all necessary permits, licenses and
regulatory approvals for our operations are received in a timely manner; our ability to comply with
environmental, health and safety laws; and that the COVID-19 pandemic, or other pandemics, do not materially
impact underlying assumptions used in estimating mineral reserves and mineral resources, such as prices, the
costs and availability of necessary labour, energy, supplies, materials and services, and exchange rates, among
other things. The foregoing list of assumptions is not exhaustive.
The Company cautions the reader that forward-looking statements and information involve known and unknown
risks, uncertainties and other factors that may cause actual results and developments to differ materially from
those expressed or implied by such forward-looking statements or information contained in this news release
and the Company has made assumptions and estimates based on or related to many of these factors. Such
factors include, without limitation: fluctuations in lead, zinc, silver, gold and other metal prices; fluctuations in
prices for energy inputs, labour, materials, supplies and services (including transportation); fluctuations in
currency markets (such as the Canadian dollar, Peruvian sol, Mexican peso, Argentine peso and Bolivian
boliviano versus the U.S. dollar); operational risks and hazards inherent with the business of mining (including
environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected
PAN AMERICAN SILVER CORP.
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geological or structural formations, cave-ins, flooding and severe weather); employee relations; our ability to
obtain all necessary permits, licenses and regulatory approvals in a timely manner; changes in laws, regulations
and government practices in the jurisdictions where we operate, including environmental, export and import
laws and regulations; legal restrictions relating to mining, including in Guatemala; risks relating to expropriation;
diminishing quantities or grades of mineral reserves as properties are mined; increased competition in the
mining industry for equipment and qualified personnel; relationships with, and claims by, local communities and
indigenous populations, including with respect to the ongoing Agrarian Court and SEDATU processes related to
La Colorada (as previously disclosed in our most recent Annual Information Form), where certain individuals
have asserted community rights and land ownership over a portion of the La Colorada mine’s surface lands and
have also initiated a process before SEDATU to declare such lands as national property. In 2019, we filed an
amparo against the SEDATU process but our amparo challenge was dismissed in October 2021, primarily on the
basis that no final declaration of national lands had yet been made by SEDATU that would affect our property
rights. Our appeal of the amparo resolution was recently dismissed in early September 2022. We will continue to
oppose the SEDATU process and the claims in the Agrarian Court. The Agrarian Court and SEDATU processes are
not related to our mineral concessions. While we believe that we hold proper title to the surface lands in
question, if a declaration of national property was made by SEDATU or if the Agrarian Court determined that
certain individuals had community rights on our surface properties and as a result we are unable to maintain, or
maintain access to, those surface rights, there could be material adverse impacts on the La Colorada mine’s
future operations. In addition to the forgoing risks, readers should also refer to those risk factors identified
under the caption “Risks Related to Pan American’s Business” in the Company’s most recent form 40-F and
Annual Information Form filed with the United States Securities and Exchange Commission and Canadian
provincial securities regulatory authorities, respectively. Although the Company has attempted to identify
important factors that could cause actual results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated, described or intended. Investors are cautioned against undue
reliance on forward-looking statements or information. Forward-looking statements and information are
designed to help readers understand management’s current views of our near and longer term prospects and
may not be appropriate for other purposes. The Company does not intend, nor does it assume any obligation to
update or revise forward-looking statements or information, whether as a result of new information, changes in
assumptions, future events or otherwise, except to the extent required by applicable law.
Cautionary Note to US Investors Regarding References to Mineral Reserves and Mineral Resources
Unless otherwise indicated, all mineral resource estimates included in this news release have been prepared and
disclosed in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects
(“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum classification system. NI 43-101 is
a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an
issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including
NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission
(the “SEC”), and mineral reserve and resource information included herein may not be comparable to similar
information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, this
news release uses the terms “measured mineral resources,” “indicated mineral resources” and “inferred mineral
resources” as defined under Canadian regulations. The requirements of NI 43-101 for the identification of
“reserves” are also not the same as those of the SEC, and mineral reserves reported by Pan American in
compliance with NI 43-101 may not qualify as “mineral reserves” under SEC standards. In addition, disclosure of
“contained ounces” in a mineral resource is permitted disclosure under Canadian regulations. Accordingly,
information concerning mineral deposits set forth in this news release may not be comparable with information
made public by companies that report in accordance with U.S. standards.
The SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure
requirements for issuers whose securities are registered with the SEC under the U.S. Securities Exchange Act of
1934, as amended. These amendments became effective February 25, 2019 (the “SEC Modernization Rules”)
with compliance required for the first fiscal year beginning on or after January 1, 2021. Under the SEC
Modernization Rules, the historical property disclosure requirements for mining registrants included in Industry
Guide 7 under the U.S. Securities Act of 1933, as amended, were rescinded and replaced with disclosure
requirements in subpart 1300 of SEC Regulation S-K. As a result of the adoption of the SEC Modernization Rules,
the SEC now recognizes estimates of “measured mineral resources”, “indicated mineral resources” and “inferred
mineral resources.” In addition, the SEC has amended its definitions of “proven mineral reserves” and “probable
mineral reserves” to be substantially similar to the corresponding standards under NI 43-101. While the above
terms are “substantially similar” to the standards under NI 43-101, there are differences in the definitions under
the SEC Modernization Rules. As a foreign private issuer that is eligible to file reports with the SEC pursuant to
the multi-jurisdictional disclosure system (the “MJDS”), Pan American is not required to provide disclosure on its
mineral properties under the SEC Modernization Rules and will continue to provide disclosure under NI 43-101.
Accordingly, there is no assurance any mineral reserves or mineral resources that Pan American may report as
“proven mineral reserves”, “probable mineral reserves”, “measured mineral resources”, “indicated mineral
resources” and “inferred mineral resources” under NI 43-101 would be the same had Pan American prepared
the mineral reserve or resource estimates under the standards adopted under the SEC Modernization Rules. If
Pan American ceases to be a foreign private issuer or loses its eligibility to file its annual report on Form 40-F
pursuant to the MJDS, then Pan American will be subject to the SEC Modernization Rules, which differ from the
requirements of NI 43-101.
U.S. investors should not assume that any part or all of an “inferred mineral resource”, a “measured mineral
resource” or an “indicated mineral resource” will ever be converted into a higher category of mineral resources
or into mineral reserves or that it will ever be economically or legally mineable. Mineralization described using
these terms has a greater amount of uncertainty as to its existence and feasibility than mineralization that has
been characterized as a mineral reserve. Further, “inferred mineral resources” have an even greater amount of
uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, U.S.
investors are also cautioned not to assume that all or any part of “inferred mineral resources” exist. Under
Canadian securities laws, estimates of “inferred mineral resources” may not form the basis of feasibility or pre-
feasibility studies, except in rare cases.