Pan American Silver : 2021 Annual Information Form

Annual

Information

Form

For the Year

Ended December 31, 2021

February 23, 2022

1500-625 Howe Street

Vancouver, British Columbia

V6C 2T6

www.panamericansilver.com

PAN AMERICAN SILVER CORP.
ANNUAL INFORMATION FORM
WHAT'S INSIDE
WHAT'S INSIDE ........................................................................................................................................................................	1
IMPORTANT INFORMATION ABOUT THIS DOCUMENT...........................................................................................................	2
CORPORATE STRUCTURE.........................................................................................................................................................	9
GENERAL DEVELOPMENT OF THE BUSINESS.........................................................................................................................	13
NARRATIVE DESCRIPTION OF THE BUSINESS ........................................................................................................................	18
RISKS RELATED TO OUR BUSINESS ........................................................................................................................................	57
DIVIDENDS.............................................................................................................................................................................	78
MARKET FOR SECURITIES ......................................................................................................................................................	79
DIRECTORS AND EXECUTIVE OFFICERS .................................................................................................................................	79
CONFLICTS OF INTEREST .......................................................................................................................................................	83
LEGAL PROCEEDINGS AND REGULATORY ACTIONS ..............................................................................................................	83
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ..........................................................................	83
TRANSFER AGENTS AND REGISTRAR .....................................................................................................................................	84
MATERIAL CONTRACTS .........................................................................................................................................................	84
INTERESTS OF EXPERTS .........................................................................................................................................................	84
EXCEPTIONS FROM NASDAQ CORPORATE GOVERNANCE REQUIREMENTS .........................................................................	84
ADDITIONAL INFORMATION .................................................................................................................................................	85
GLOSSARY OF TERMS ............................................................................................................................................................	86
APPENDIX "A" - AUDIT COMMITTEE CHARTER ...........................................................................................................	A-1

EGBC Permit #1001470

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IMPORTANT INFORMATION ABOUT THIS DOCUMENT

This annual information form ("AIF") provides important information about Pan American Silver Corp. It describes our business, including our goals and strategy, our history, our operations and development projects, our mineral reserves and mineral resources, our approach to environmental, social and governance ("ESG") matters, the regulatory environment that we operate in, the risks we face, and the market for our products, among other things.

We have prepared this document to meet the requirements of Canadian securities laws, which are different from what US securities laws require.

Throughout this document, the term Pan Americanmeans Pan American Silver Corp. and the terms we, us, and our mean Pan American and its subsidiaries.

Reporting Currency and Financial Information

Unless we have specified otherwise, all references to dollar amounts or $ or USD are United States dollars. Any references to CAD or CAD$ are Canadian dollars.

All financial information presented in this AIF was prepared in accordance with international financial reporting standards ("IFRS") as issued by the International Accounting Standards Board.

Non-GAAP Measures

This AIF refers to various non-generally accepted accounting principles ("non-GAAP") measures, such as cash costs per ounce sold, net of by-product credits ("Cash Costs"), all-in sustaining costs per ounce sold ("AISC"), working capital, net cash, and total debt. Readers should refer to the section entitled "Alternative Performance (Non- GAAP) Measures" in our management's discussion and analysis for the year ended December 31, 2021 (the "2021 MD&A") for a detailed description and reconciliation of these non-GAAP measures. The 2021 MD&A is available under our SEDAR profile at www.sedar.com and on our website at www.panamericansilver.com.

Per Ounce Measures - Cash Costs and AISC

Cash Costs and AISC are non-GAAP financial measures that do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

Pan American produces by-product metals incidentally to our silver and gold mining activities. We have adopted the practice of calculating a performance measure with the net cost of producing an ounce of silver and gold, our primary payable metals, after deducting revenues gained from incidental by-product production. This performance measurement has been commonly used in the mining industry for many years and was developed as a relatively simple way of comparing the net production costs of the primary metal for a specific period against the prevailing market price of that metal.

Cash costs per ounce metrics, net of by-product credits, is used extensively in our internal decision making processes. We believe the metric is also useful to investors because it facilitates comparison, on a mine-by-mine basis, notwithstanding the unique mix of incidental by-product production at each mine, of our operations' relative performance on a period-by-period basis, and against the operations of our peers in the silver and gold industry. Cash costs per ounce is conceptually understood and widely reported in the mining industry.

We believe that AISC, also calculated net of by-products, is a comprehensive measure of the full cost of operating our business, given it includes the cost of replacing silver and gold ounces through exploration, the cost of ongoing capital investments (sustaining capital), general and administrative expenses, as well as other items that affect our consolidated cash flow.

Silver Segment Cash Costs and AISC are calculated net of credits for realized revenues from all metals other than silver ("silver segment by-product credits"), and are calculated per ounce of silver sold. Gold Segment Cash Costs and AISC are calculated net of credits for realized silver revenues ("gold segment by-product credits"), and are calculated per ounce of gold sold. Consolidated Cash Costs and AISC are based on total silver ounces sold and are net of by-product credits from all metals other than silver ("silver basis consolidated by-product credits").

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Included in the Silver Segment for 2021 were the La Colorada, Huaron, Morococha, San Vicente, and Manantial Espejo (including COSE and Joaquin) mines, while the Gold Segment was comprised of the Dolores, Shahuindo, La Arena, Timmins West and Bell Creek mines. The Dolores mine was formerly included in the Silver Segment, but due to the mine's production profile, we have determined that the Dolores mine is better identified as a Gold Segment operation going forward. As such, beginning in 2021, we began to report Dolores Cash Costs and AISC, including recast comparative amounts, on a per ounce of gold basis and include it as part of its Gold Segment Cash Costs and AISC calculations.

Working Capital

Working capital is a non-GAAP measure calculated as current assets less current liabilities. Working capital does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Pan American and certain investors use this information to evaluate whether Pan American is able to meet its current obligations using its current assets.

Total Debt

Total debt is a non-GAAP measure calculated as the total current and non-current portions of long-term debt, finance lease liabilities, and loans payable. Total debt does not have any standardized meaning prescribed by GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. Pan American and certain investors use this information to evaluate the financial debt leverage of Pan American.

Glossary of Terms

The glossary of terms under "Glossary of Terms" of this AIF contains definitions of certain scientific or technical terms used in this AIF that might be useful for your understanding.

Conversion Table

In this AIF, metric units are used with respect to mineral properties unless otherwise indicated. Conversion rates from imperial to metric units and from metric to units imperial are provided in the table set out below.

Imperial Measure =	Metric Unit		Metric Unit	= Imperial Measure
2.47 acres	1 hectare		0.405 hectares	1 acre
3.28 feet	1 metre		0.305 metres	1 foot
0.621 miles	1 kilometre		1.609 kilometres	1 mile
0.032 ounces (troy)	1 gram		31.1 grams	1 ounce (troy)
1.102 tons (short)	1 tonne		0.907 tonnes	1 ton (short)
0.029 ounces (troy)/ton (short)	1 gram/tonne		34.28 grams/tonne	1 ounce (troy)/ton (short)
2205 pounds	1 tonne		0.454 kilograms	1 pound

Caution About Forward-Looking Information

This AIF includes statements and information about our expectations for the future. When we discuss our strategy, plans and future financial and operating performance, or other things that have not yet taken place, we are making statements considered to be forward-looking information or forward-looking statements under Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995. We refer to such forward- looking information and forward-looking statements together in this AIF as forward-looking information.

Key things to understand about the forward-looking information in this AIF are:

• It typically includes words and phrases about the future, such as believe, estimate, anticipate, expect, plan, intend, predict, goal, target, forecast, project, scheduled, potential, strategy and proposed (see examples starting on page 4).
• It is based on a number of material assumptions, including, but not limited to, those we have listed below, that may prove to be incorrect.
• Actual results and events may be significantly different from what we currently expect, because of, among other things, the risks associated with our business. We list a number of these material risks below under
• • 3 -

"Material Risks and Assumptions". We recommend you also review other parts of this AIF, including "Risks Related to Our Business" starting on page 57, and our 2021 MD&A, which includes a discussion of other material risks that could cause our actual results to differ from our current expectations.

Forward-looking information is designed to help you understand management's current views of our near and longer term prospects. It may not be appropriate for other purposes. We do not intend to update forward- looking information unless we are required to do so by applicable securities laws.

Examples of Forward-Looking Information in this AIF:

• the price of silver, gold and other metals and assumed foreign exchange rates;
• estimated production of silver, gold and other metals forecasted for 2022, as well as our estimated Cash Costs, AISC and expenditures (such as sustaining and project capital, care and maintenance expenditures, and general corporate and administrative expenditures) in 2022;
• the sufficiency of our liquid assets to satisfy our 2022 working capital requirements, fund currently planned capital expenditures (including both sustaining and project capital) for existing operations, and to discharge liabilities as they come due;
• the accuracy of mineral reserve and mineral resource estimates at the La Colorada, Dolores, Huaron, Shahuindo, Timmins West, and Bell Creek mines, as well as the Escobal mine and other projects and properties, including the Morococha mine;
• estimated production rates for silver and other payable metals we produce, timing of production and estimated cash and total costs of production;
• our anticipated operating cash flow and the estimated cost of and availability of funding for working capital requirements and capital replacement, improvement or remediation programs, care and maintenance programs, and for future construction and development projects;
• our ability to take advantage of further strategic opportunities as they are identified and become available;
• expectations with respect to the future anticipated impact of COVID-19 on our operations, assumptions related to the global supply of COVID-19 vaccines and the effectiveness and results of any vaccines, the lessening or increase in pandemic-related restrictions, the impacts on the global supply chain of goods and services resulted to COVID-19, and the anticipated rate and timing for the same;
• the ability of Pan American to continue with its operations, or to successfully maintain our operations on care and maintenance, should the situation related to COVID-19 not be as anticipated;
• the outcome of the International Labour Organization Convention No. 169 ("ILO 169") consultation process in Guatemala with respect to the Escobal mine, the resolution of other matters ordered by the courts in Guatemala, and our anticipated engagement with local communities and the Xinka population;
• the Escobal and Morococha mines remaining on care and maintenance in 2022;
• our ability to successfully restart the Escobal mine if the ILO 169 consultation-related suspension ends;
• our ability to identify and realize any alternative opportunities for the Morococha mine and what impact such alternatives, if any, may have on our business;
• our ability to obtain necessary permits and licenses, including for current or future operations, project development and expansion;
• future successful development of the Navidad project, the La Colorada skarn and other development projects;
• the effect of the New Mining Law (as defined below) established by the Bolivian government on the current joint venture agreement relating to the San Vicente mine;
• the effects of laws, regulations and government policies affecting our operations, including, without limitation, expectations relating to or the effect of certain highly restrictive laws and regulations applicable to mining in the Province of Chubut, Argentina;
• the estimates of expected or anticipated economic returns from a mining project, as reflected in preliminary economic assessments, pre-feasibility, and feasibility studies or other reports prepared in relation to development of projects;
• estimated exploration expenditures to be incurred on our various silver exploration properties;
• compliance with environmental, health, safety and other regulations;
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