managing environmental impacts

We work to minimize and mitigate the environmental impacts of our operations in each phase of the mining cycle – from exploration through development, construction, operation, closure, and post-closure.

We strive for continual improvement and have adopted best known practice international standards, including the Mining Association of Canada’s Towards Sustainable Mining (TSM) program across our operations.

Our Approach

Policy

• Environmental Policy

Systems

• TSM - We implement management systems in line with TSM protocols. • Corporate Environmental Standards – Our internal standards are intended to help sites implement and share best known practices to manage and mitigate impacts in key areas. We have standards covering tailings, heap leach pads, biodiversity, and mine closure.

Plan

• Baseline data collection and pre-construction environmental impact assessments help us plan our work and monitor the impacts of our operations. • The Company strives to share novel and best practices, as well as challenges, between our site environment and community teams.

Engage

• Environment and community teams collaborate to engage with COIs on environmental issues and concerns and respond to feedback provided through our community response mechanisms.

Implement

• Programs and initiatives – Our programs are designed to manage and mitigate our impacts on the environment and communities, and to maximize the benefits of the environmental knowledge and expertise we develop for other stakeholders in the regions where we operate. • Internal capacity building – We train our local teams on guidelines and procedures to continually improve our environmental management performance.

We strive for continual improvement and have adopted best known practice international standards.

Monitor and evaluate

• TSM protocols – our sites self-assess their performance against these protocols and develop corresponding action plans for improvement. • Environmental Audits – Each mine is audited at least every other year to assess the mine’s facilities, operating procedures, and control systems to ensure potential risks are being managed correctly. Audits are conducted by a team of professionals from our other mines and corporate office. In addition, we occasionally add a third-party specialist to the audit team to address in greater detail specific areas of concern or opportunities. The audit process fosters the sharing of best practices and integration among mines and helps ensure that site level procedures are consistent with TSM and our corporate standards.

Accountability

• Each operation is responsible for the development and implementation of procedures and programs that comply with our Environmental Policy, systems, and corporate initiatives. • The Vice President, Environment, oversees environmental management for our Company.

Our Performance

Our biggest challenge in 2019 was the integration of the recently acquired gold segment operations (Tahoe Resources) into Pan American Silver. This required strengthening our teams as well as streamlining management and reporting systems. We incorporated the Tahoe mines into our corporate environmental audit program. Integrating the new mines required us to update and expand certain systems and processes in areas such as water management and mine closure to ensure the Tahoe operations were meeting our standards. We also gained additional capacity and talent from the new operations and were able to leverage experience and advanced tools from Tahoe, including data management and reporting systems, which we are applying across the Company.

Another focus for us was the continued implementation of TSM protocols and frameworks. In 2019, our corporate office and sites conducted selfassessments against the TSM protocols and have been implementing detailed action plans to address gaps and enhance internal guidelines and processes. Our silver segment mines were on track to achieve TSM Level A across all protocols by the end of 2020; however, progress has been delayed by forced mine suspensions related to the COVID-19 pandemic. Our newly acquired gold segment operations have a goal to meet Level A by 2022 or earlier and are already making good progress. Sites are also working to align their management systems with the TSM protocols.

Significant Environmental Incidents

No SEIs occurred at our mines in 2019. We define SEIs as those that negatively impact the environment or communities outside of our mines or project sites, including environmental incidents that significantly impact the reputation or community perception of Pan American Silver. Our focus on prevention, environmental management through our auditing program, emergency preparedness, and crisis management at the site and corporate levels to rapidly address issues that may arise supports our ability to avoid SEIs.

100

75

50

25

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2019 2019 La Arena Shahuindo 2015 2017 2019 Manantial Espejo

In 2019, we completed audits at Manantial Espejo as well as at two of our newly acquired mines, Shahuindo and La Arena. Manantial Espejo improved its overall audit performance from the prior 2017 audit. While the overall number of audit findings increased, the severity of non-conformances was lower than that found in the previous audit. The majority of non-conformances were of low severity such as solid industrial waste management, housekeeping, and lack of signage. Shahuindo and La Arena performed well on their first audits under the Pan American Silver system. Both mines are addressing audit findings related to water management by implementing water management plans through water committees at each site. The 2020 audit plan includes audits at Timmins, San Vicente, Dolores, and La Colorada subject to COVID-19 pandemic impact adjustments.

Air Quality

Dust generated by activities such as blasting, crushing, and transport gravel roads can potentially affect air quality if not properly managed. In addition, ore processing and site laboratory activities have certain emissions that also require management controls. All our operations have dust suppression systems and actively manage dust sources from mobile transport. In addition, many of our sites’ processing and laboratory emission sources have air quality control systems installed. To insure compliance with relevant air quality standards , we conduct regular air monitoring around our operations and also monitor laboratory and refinery air extraction emissions. In 2019, our sites completed dust, laboratory, and refinery monitoring in accordance with best practices and the results complied with relevant air quality regulations.

Dust generated by delivery truck transportation is a community concern at our La Arena and Shahuindo mines. We have been working with those communities to find creative solutions, including the use of additives that improve road surface stability and reduce water use for dust suppression. We also gained additional capacity and talent from the new operations and were able to leverage experience and advanced tools from Tahoe, including data management and reporting systems, which we are applying across the Company.