Pan American Silver Corp Agreement to Acquire MAG Silver Corp Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Wayne Lam - TD Cowen. - Analyst : First question. Just wondering in assessing this deal versus other opportunities, how do you guys view the nonoperating stake versus other assets where you would have had full control?

Question: Wayne Lam - TD Cowen. - Analyst : Okay. Great. And then just maybe in terms of timing of the deal, would you be able to comment on what this may mean for Escobal? And in terms of recent reports around the Xinka community kind of pushing back on the consent for restart, did that factor into this decision?

Question: Wayne Lam - TD Cowen. - Analyst : Okay. Perfect. And then maybe just last one. Just curious how you view the partnership with Fresnillo, have you had any past relationship in dealing with them in the past, maybe on other concessions in Mexico? And then was there any consultation with them in your discussions with MAG where you might have obtained support from them for the transaction?

Question: Wayne Lam - TD Cowen. - Analyst : Okay. Perfect. Congratulations on the transaction.

Question: Ovais Habib - Scotia Capital, Inc - Analyst : Congrats on the transaction. Just a couple of questions from me. Michael, this one is for you. With this transaction, will you be looking to increase the intensity on selling noncore assets?

Question: Ovais Habib - Scotia Capital, Inc - Analyst : And then maybe just continuing, in terms of Juanicipio, obviously, there's some significant exploration upside in Juanicipio. Based on the due diligence that you've done and have performed, where do you see the most exploration upside, the long strike at depth? Are there other targets that you or JB will start talking about?

Question: Ovais Habib - Scotia Capital, Inc - Analyst : I think my last question, maybe this is for George. Just more on Fresnillo side. I've been getting a lot of questions on this is where does Fresnillo stand on this transaction. I believe they have a ROFR on Juanicipio. Are they on board with this transaction? Any sort of color on that?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Sorry, but I need to go back to Fresnillo again. And -- could you confirm with me how many shares of MEG Fresnillo own? And maybe that will start off with that.

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Okay. And then so they took confirm, George, they have not locked up those shares.

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Okay. and then in terms of the transaction going through the presentation, is there a break fee?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Okay. Okay. I didn't see that in the presentation. Great. Maybe diving deeper into a potential relationship with Fresnillo. My understanding is that Fresnillo, the operator. However, there is a sort of operating group, Board of Directors at the operational level, is that kind of the same structure that will continue? And then clearly, Pan American Silver has more resources compared to MAG Silver. Over time, Michael, would you try to help out more in terms of operations, would you try to have more input in terms of the operatorship? How should we look at it?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Maybe diving deeper into the Juanicipio asset. As you mentioned, 2025 is going to be a very good year in terms of production of silver. But my question is, the current head grade is about 400-gram per tonne. The reserve grade was 250 grams per tonne. And so Michael, when you look at this asset or George, if you want to input as well, how have you factored that potentially lower grade later on? That's number one. And in terms of exploration, I think my buddy Ovais asked this question, but where is the exploration coming from? Is it these upwelling zones? Are you going to try to use exploration to backfill some of the great profile in terms of silver grade. Maybe you can wrap my head around your thinking, that would be great.

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Okay. So there's theories or there's a plan potentially in place in terms of either the splay structures or whatnot that could potentially maintain the silver grade higher for longer maybe?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Got it. And maybe one last question here. Switching gears a little bit. Deer Trail and Lada, Michael, how much value should we put or how much value did you put on those assets with the acquisition cost? That's number one. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2025 / 2:00PM, PAAS.TO - Pan American Silver Corp Agreement to Acquire MAG Silver Corp Call And can you remind us how much was spent on each of those overtime? What's the book value for Deer Trail and Lada? And I only ask the questions because I was at the MAG Silver PDT launch. And even at that point in time, we talked a lot about these different assets but also seem like the company was ready to kind of scale back on the money being spent on these assets. Or in a broader scale, you talked about capital allocation and whatnot. So I guess, how much is the book value? How much should we evaluate from the perspective of Pan American Silver? And what's the upside to it?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Yes. Historically, how much money has been spent on each, maybe George or ?

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Yes. I do know. But since your room, my Mother's Day, I had to ask the question anyway.

Question: Cosmos Chiu - CIBC Capital Markets - Analyst : Yes. and then maybe just one last very quick question, closing of the deal. I've seen these deals before. Usually, the last approval is the Mexican antitrust. Are we expecting sort of that to be the last approval once again? And then in terms of the timing, dividend, I know, MAG, you just declared your second dividend. What if the deal doesn't close until after your Q2 reporting, would you -- would there be another dividend? Have you considered the timing from that perspective?

Question: Michael Siperco - RBC Capital Markets - Analyst : Yes. One quick one left for me. Michael, you mentioned off the top and through the call, the collaboration, and the relationship with Fresnillo. Getting a few calls and questions already asking if there's any read-through into potentially a partnership on the Star project, which isn't that far away, -- should we be thinking about that? Have you had any conversations along those lines?

Question: Michael Siperco - RBC Capital Markets - Analyst : Okay. Congratulations on the deal.

Question: Ovais Habib - Scotia Capital, Inc - Analyst : Sorry, guys, I believe the question on the dividend was already asked. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 12, 2025 / 2:00PM, PAAS.TO - Pan American Silver Corp Agreement to Acquire MAG Silver Corp Call