Thank you for standing by. This is the conference operator. Welcome to the Pan American Silver annual general and special meeting. As a reminder, all participants are in listen-only mode, and the conference is being recorded. Webcast participants may also type in their questions via the box at the bottom of the webcast. I would now like to turn the conference over to Siren Fisekci, VP, Investor Relations and Corporate Communications. Please go ahead. Siren, your mic is open.
Yes. Thank you. Yeah. My name is Gillian Winckler. I'm the Chair of the company. 2022 Annual General and Special Meeting will now come to order. Due to the current state of the global COVID-19 pandemic, we have recommended that all shareholders vote by proxy in advance of the meeting and not attend the meeting in person. We thank all shareholders who are listening to the proceedings of this meeting via live conference call or audio webcast, and we look forward to future meetings when we shall host you in person. We will now proceed with the formal part of the meeting. Shareholders wishing to ask questions relating to the business of the meeting should submit them via the live webcast. Pursuant to the articles of the company, I will be acting as Chair of the meeting.
Delaney Fisher, Senior Vice President, Associate General Counsel, and Corporate Secretary of the company, will act as secretary for this meeting. [Bonita Bassi of Computershare Investor Services] will act as scrutineer of the meeting. Would the secretary please assure us that the annual general and special meeting has been properly called?
Thank you. I have before me an affidavit of a representative of Computershare Investor Services Inc., attesting that the notice calling this annual general and special meeting, together with the information circular, form of proxy, and audited financial statements, were delivered in accordance with Business Corporations Act and applicable securities laws. Therefore, Madam Chair, this annual general and special meeting has been properly called.
I will now request that the secretary read the scrutineer's report.
The scrutineer's report reads as follows: three shareholders voted in person, representing 11,089 shares. 303 shareholders voted by proxy, representing 131,350,672 shares. There were 306 total shareholders holding 131,361,761 shares. The total issued outstanding shares as of the record date was 210,474,655. As such, the percentage of outstanding shares represented at the meeting was 62.41%.
Thank you. I adopt the scrutineer's report and declare accordingly that the quorum is present. I now declare that the annual general and special meeting is regularly called and properly constituted for the transaction of business. First item of business is the reading of the minutes of last year's annual meeting. I would request a motion to take the minutes as read and confirmed.
Moved.
All those in favor, please signify by raising their right hand. Against, if any? I declare the motion carried. The next item of business is the presentation of the audited financial statements of the company and the report of the auditors thereon for the year ended December 31, 2021. The audited financial statements and auditors' report were mailed to each shareholder who had requested a copy. I shall consider the audited financial statements and auditors' report received by the shareholders as submitted to this annual general meeting, this annual general and special meeting. It is now in order to proceed with the election of directors for the upcoming year. There are eight positions to be filled, each to hold office until the next annual meeting of shareholders. I now declare the meeting open for nominations for directors.
I nominate Michael Carroll, Neil de Gelder, Charles A. Jeannes, Jennifer Maki, Walter Segsworth, Kathleen Sendall, Michael Steinmann, and Gillian Winckler, all to be directors of the company and to hold office in accordance with the articles of the company.
Each of the nominees has previously consented in writing to act as a director. I ask for a motion that nominations be closed.
Moved.
All those in favor of the motion, please signify by raising their right hand. Against, if any? Carried. We will now proceed with the election of directors. Each director will be elected separately via show of hands. It is proposed that separate ordinary resolutions be passed electing Michael Carroll, Neil de Gelder, Charles A. Jeannes, Jennifer Maki, Walter Segsworth, Kathleen Sendall, Michael Steinmann, and Gillian Winckler as directors of the company for the ensuing year to hold office until the next annual meeting of shareholders.
Moved.
I would ask that each shareholder signify their vote on the following appointments by raising their right hand. All those in favor of the appointment of Michael Carroll? Against, if any? Carried. All those in favor of the appointment of Neil de Gelder? Against, if any? Carried. All those in favor of the appointment of Charles A. Jeannes? Against, if any? Carried. All those in favor of the appointment of Jennifer Maki? Against, if any? Carried. All those in favor of the appointment of Walter Segsworth? Against, if any? Carried. All those in favor of the appointment of Kathleen Sendall? Against, if any? Carried. All in favor of the appointment of Michael Steinmann? Against, if any? Carried. All those in favor of the appointment of Gillian Winckler? Against, if any? Carried.
I declare that Michael Carroll, de Gelder, Segsworth, Steinmann, Jeannes, and Ms. Maki, Sendall and Winckler have been elected as directors of the company for the ensuing year to hold office until the next annual meeting of shareholders of the company who until their successors are elected or appointed.
The next item of business is the appointment of auditors. It is proposed that the company reappoint Deloitte LLP as auditors of the company. Accordingly, I ask for a motion that Deloitte be appointed as auditors of the company for the ensuing year. So moved. All those in favor, please signify by raising their hand, their right hand. Against, if any. Carried. The next item of business is the fixing of the auditor's remuneration. It is proposed the board of directors be authorized to determine the remuneration to be paid to Deloitte for the ensuing year. Excuse me. So moved. All those in favor, please signify by raising your right hand.
Against, if any. Carried. The next item of business is to consider and approve an ordinary advisory resolution approving the company's approach to executive compensation. The full text of the advisory resolution is contained on page fourteen of the information circular for this meeting. I ask for a motion that the advisory resolution approving the company's approach to executive compensation be approved. So moved. All those in favor, please signify by raising their right hand. Against, if any. Carried. I'll call for a motion to conclude the formal portion of the annual general meeting, annual general and special meeting of the company.
I move that this meeting be concluded.
All those in favor, please signify it by raising their right hand. Against, if any. I declare this annual, general and special meeting of the company concluded. Thank you for your attendance and continued support.
I'll now hand over because there were a few questions that came through, and I'll hand over to Siren Fisekci and Michael Steinmann.
Thank you, Gillian. Just give me a second here while I look through the questions. The first one is, in Chubut, Argentina, where community opposition has halted the Navidad project, a video was leaked where provincial deputy secures support for the mining industry. There is an open investigation in Chubut Provincial Court into bribing of legislators. Does Pan American Silver have anything to say about this?
Thanks for the question. Navidad is I assume it refers to the Navidad project that we have in Chubut. It's actually a project that is on care and maintenance since the termination of the exploration phase, which if I recall, that was about 2013. So all the exploration is done. The project, there's no construction or production from that asset, and it's on care and maintenance since then, as there is currently no law that would allow open-pit mining. I don't know what the rest of the question refers to. We obviously, as a Canadian company, report under ESTMA all our payments that go out to governments worldwide. Please feel free in our public filing to read about that.
Thank you. We have a question from Angus Wong, representing SumOfUs, a corporate responsibility organization who delivered a petition just prior to this meeting. We understand the petition called on Pan American Silver to respect community self-determination around Escobal and Navidad mines in Guatemala and Argentina. The question raised was. Do you have any response to the people that signed this petition? Michael, can you respond to this?
Sure. I mean, first and foremost, we respect Indigenous people's right to consultation. In alignment with the Mining Association of Canada, MAC, they have the TSM Indigenous and community relationship protocol. As outlined also in our social sustainability policy, we are committed to aim to achieve free and prior informed consent for impacts on the rights of directly affected Indigenous people. When we look at Guatemala, I'll give you a bit more background there. Right now, the Escobal mine is not operating. It's not operating since well before we purchased Tahoe Resources. The mine is on care and maintenance while the government of Guatemala is conducting an ILO 169 consultation process.
This is a requirement mandated by the Constitutional Court of Guatemala, so no timeline has been set for potential restart of the mine. If you're interested on the ILO 169 process, it is the United Nations-International Labor Organization Convention regarding indigenous and tribal peoples in independent countries. The aim of the ILO 169 process is to provide meaningful participation for constructive dialogue. Guatemala's Ministry of Energy and Mines is leading that ILO 169 process, and they have structured a very transparent and inclusive consultation process with broad participation. If you're interested, please, they provided actually a website on the government side where you can read all the detail about the consultation.
Pan American is participating in good faith and in full respect to the terms of the Constitutional Court ruling, the ILO 169 consultation process, and our global human rights policy. To date, we have participated in six pre-consultation meetings. We have also participated in two working meetings with the Ministry of Energy and Mines and the Xinka Parliament to discuss our care and maintenance activities and supply needs. These activities have been validated by numerous visits from the Ministry of Energy and Mines, from the Ministry of Environment and Natural Resources, as well as a verification commission visit that was made up by representatives from the Xinka Parliament, the Ministry of Energy and Mines, and the Ministry of Environment and Natural Resources.
Human rights is a really important issue to us, and we have human rights audits to ensure our best practices and compliance regarding principles on business and human rights.
Great. Thank you. We have one on La Colorada Skarn. When can the Skarn be in production and how much could it produce?
Yeah, it's a question I get quite often. It's a bit early to say that. It's a very large discovery. We just put the press release out on May 9th regarding the latest drill results.
Actually, we drilled about 100,000 meters since the last resource update, and right now we're really focused on infill and exploration drilling and then come up with a new resource somewhere mid of this year. Later on make a decision on the mining method and production numbers, cost, capital, et cetera. It's a bit early to say right now when production will start. We started working on several infrastructure projects that will help for the skarn. One is a sinking of a ventilation shaft, concrete-lined shaft that we started late last year. We will also start driving a ramp to that skarn down.
We installed actually a cooling unit that is cooling the air in the mine, which is by now starting up. That's these are projects that help our current production and will help in the future our skarn production as well. Yeah, I have to refer you really to a bit later, maybe later in the year or early next year when we have more technical information available to give an idea at what time the skarn production will start.
Thank you, Michael. We've got another question that's lengthier, but pulling out the question, it is that at La Colorada mine in Mexico, over 40 families were displaced to make way for an expansion. I think that's the question. What would be the response to that?
Actually, as part of the expansion at La Colorada, which started in 2015, we built new camp facilities and reaccommodated workers, as well as a few families who lived on our property, to which we of course have registered legal title. 13 families opposed the move and new accommodation and thus filed a land rights claim at the Mexican agrarian court. This group also engaged the United Nations Office of the High Commissioner of Human Rights, or OHCHR, in Mexico City. An additional process was initiated before the Secretariat of Agrarian, Territorial, and Urban Development in Zacatecas to dispute lands legally owned by the company and declare them as national property. We have been proactively working with the OHCHR and the families to resolve these issues.
In 2018, the OHCHR has identified areas of concern and opportunities for improvement from a human rights perspective, including improving water, electricity, and facility access, as well as changes to some physical security infrastructure. We took immediate steps to address those issues and also met with representatives of the families and officials of the OHCHR and National Human Rights Commission already in three occasions prior to 2021. Going forward to 2021, we introduced a process to discuss relocation with the affected families. Held our first and continuous dialogues with them. This really has helped us to better understand their concerns.
We were also able to respond to some requests, including conducting changes to security measures, maintenance, some accommodations and access roads, and working with the families to hire a school teacher on providing them with access to healthcare services. We are actively working with those families and the OHCHR, and committed to find a resolution during 2022.
Okay, thank you. We also have a question on how the new dividend policy works. You could explain that, please, Michael?
We introduced that policy just in February, so this was basically the second quarter that we used that policy to define actually the level of our dividend. When you look at it, we pay a base dividend of $0.10 per common share and quarter. Then on top of it, there is an additional dividend, a supplemental dividend, which is calculated and based on our net cash position on our balance. It's very easy measure for you to calculate how it works. If the net cash is between $100 million and $200 million, we would pay an additional $0.01 dividend. If the net cash is $200 million-$300 million, it's an additional $0.02. That goes up.
If it's between $300 million and $400 million, it will go up to an additional $0.06. If it's over $400 million, we would pay an additional $0.08. Like last quarter and this quarter, our net cash is about $200 million. There's another $0.02 of dividend which will be paid to our shareholders. The total dividend paid that has been declared today by the board will be $0.12 per share for this quarter.
Great. Thank you. I'm just checking to see if there's any other questions. Give me one minute. Would Pan American consider a buyback program in addition to the new dividend policy?
First and foremost, I'm very happy that we actually have a discussion, how we return cash to our shareholders. I think it's a very important tool for a successful mining company to return and be able to return cash to the shareholders at any time of the metal price cycle. I think our preference is to return the money in form of dividend at this point in the metal price cycle and leave the decision with the shareholders to decide if they, you know, would like to purchase more exposure to Pan American. My preference is really not to issue the shares in the first place, which has much better impact for our shareholders.
The last time we actually issued shares for our business, which was not for purchase, but for our business, it goes all the way back to, I believe it was January 2009. Our share count at the moment, I think, Siren, is somewhere around 210.5 million shares. We are very happy with our new dividend policy to return money to dividends. As I said, trying to keep our already low share count at lower levels.
Great. Thank you. That appears to be all of the questions we have that are pertinent to the business of this meeting. At this point, I will turn it back over to our Chair, Gillian, to close the meeting.
Thank you. Thank you, Michael, and thank you, Siren, and thank you everyone for the questions you submitted. We look forward to the meeting next year and in truly many engagements with management is always welcome. Thank you very much, and I declare the meeting closed.
Okay, thanks.
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.