escobal

Through the acquisition of Tahoe Resources in 2019, Pan American Silver acquired the Escobal mine in Guatemala.

Prior to our acquisition, Escobal’s mining license had been suspended pending the completion of an International Labour Organization (ILO) 169 consultation process mandated by the Constitutional Court of Guatemala. The mine is presently on care and maintenance pending the completion of the consultation and court approval for restart.

Prior to and following our acquisition of Escobal, we performed an assessment of the mine’s history to identify opportunities and preferred practices for our management of Escobal. This assessment indicated the need to: listen to stakeholders; respectfully engage; increase transparency; develop solutions collaboratively; and deliver on commitments. We also recognized the importance of respecting all groups in our Communities of Interest, including the Xinka people, their culture and values. With this in mind, we engaged with our workforce, local communities, and government to prioritize outstanding issues in need of resolution. In 2019, we undertook the following actions: • Resolving the legal action against Tahoe Resources (Settled the Garcia v.

Tahoe Resources Inc. case. For more details, please click here.) • Appointing a new country manager in Guatemala and replacing half of

Escobal’s senior management team • Designating a Guatemala-based Human Rights Officer who reports to the

General Counsel

We also took the following steps to address concerns around security and human rights and to align ourselves with international best practices: • Appointing a new corporate director of security • Assessing and improving the alignment of our security practices with the

Voluntary Principles on Security and Human Rights as well as UNICEF

Canada’s Child Rights and Security Checklist • Assessing the practices of our contract security forces • Instituting a human rights training program for Pan American Silver’s support services personnel and contract security forces

While Escobal is on care and maintenance, we are complying with commitments set out in Escobal’s Environmental Management Plan. As part of these requirements, we continue to honor prior commitments made by Tahoe Resources; respond to community requests for information and support; complete community engagement activities; and report to the Government of Guatemala. We are working toward building enduring, positive relationships with all stakeholders in the region and establishing a reputation as an honest, credible partner.

RELATED SDGS

Requests for Support and Donations

37

Human Rights

5

Land Rights 4

Environment 6

Land & Property

2

Employees

7

Economic Displacement 2

In 2019, as a result of our focused efforts on an effective COI response mechanism, we addressed 63 requests and grievances relating to Escobal in a timely manner. The requests and grievances fell into the categories of land and property, economic displacement, employees, environment, land rights, human rights, and mainly requests for donations and support. The one open grievance relates to a land agreement from the previous administration. We are currently in dialogue with the parties involved to seek a resolution. Our site-level response mechanism in Escobal, as well as at our other mines, is aligned with the UN Guiding Principles and TSM protocol requirements in order to improve our accountability and foster the trust in our systems with community members.

We are working toward building enduring, positive relationships with all stakeholders in the region and establishing a reputation as an honest, credible partner. There is currently no timeline for the restart of operations at Escobal. We will respectfully support and participate in the ILO 169 consultation process. We regard the ILO 169 consultation process as essential, and we are committed to investing the time necessary to do it right.

We believe our proven track record of responsibly operating mines in Latin America and building relationships with communities will help us earn a lasting social license for operations at Escobal.