Silver Corp Metals Feb 2010 Presentation

8/14/2019 Silver Corp Metals Feb 2010 Presentation

1/20

Corporate PresentationCorporate Presentation

February 2010February 2010

NYSE: SVM


2/20


3/20

2

Silvercorp has built a record of success by formulating and executing adistinct long-term strategy characterized by THREE key steps:

1) Acquire a project and conduct selective exploration to further delineate its

potential.

2) Develop mine operations and generate profits before the projects potentialis fully drilled.

3) Cash flow generated from operations is used to fund further exploration,

resource expansion and production ramp up.

NYSE: SVM

Silvercorps Strategic Vision

Silvercorps goal is to focus on profitability while building a long-term growth basefinanced by internal cash flows.


4/20

3

Lorne Waldman, MBA, LL.B.Corporate Secretary

Maria Tang, CA, CPAInterim Chief Financial Officer

Myles J. Gao, P.Geo.

President & COO, Director

Jack Austin, P.C., Q.C., B.A., LL.B.,LL.MSpecial Advisor to the Chairman

Shaoyang Shen, MBA, CMAGeneral Manager, China Operations

Rui Feng, Ph.D., GeologyChairman & CEO, Director

Management

Greg Hall

Earl DrakeMyles J. Gao

Robert Gayton

Paul Simpson

Yikang LiuRui Feng

Board of Directors

NYSE: SVM

Management & Board

Dr. Feng & Yikang Liu


5/20

4

Ying Mine

NYSE: SVM

Ying Mining District ,Henan Province, toproduce ~4.7 - 5.0million ounces ofsilver in FY2010

Main production tocome from flagshipYing Mine (~90% ofproduction).

Remaining production

to come from the TLP,LM and HPG mineswhere infrastructuredevelopment isongoing.

Silvercorps Operations


6/20

5

Mill Office

NYSE: SVM

YING MINEHPG Mine

TLP Mine

LM Mine

Milling Capacity: 2,500 tpdMining Capacity: 1,500 tpd

New 1,500 tpd Mill

1,000 tpd Mill

Ying Mining District, Henan Province


7/20

6

FY2010 Ying Mine Production Forecast

Ores Mined Commodity Grade Recoveries Projected Metal Sales

315,000

Tonnes

Silver 480 g/t 91% 4.5 Million Oz

Lead 9.0% 95% 58.0 Million lbs

Zinc 3.0% 72% 14.0 Million lbs

0.2 0.5 million ounces of silverLM, TLP, HPG

Est. Cash FlowTotal Silver Production Forecast for FY2010

Ying Mining

District

Ying Mine 4.5 million ounces of silver ~$55-60 Mill ion

NYSE: SVM

Production Forecast for FY2010


8/20

7

Feasibility study underway.

Production Capacity:1,500 tpd mine & mill inoperation by 2012.

Capital cost:Mill construction: $10 millionMine development: $20million

Production:Silver: > 2 million ozLead & Zinc: > 40 million lbs

NYSE: SVM

GC Development Project 2nd Base for Growth


9/20

8

Mine and mill design, equivalent to a feasibility study by Canadian Standards, is

underway. Mining permit expected in 2010 from the Ministry of Land and Resources after the EIS

is approved.

Mine & Mill construction to commence in 2010-2011 and production expected in 2012.

NYSE: SVM

Measured & Indicated Resource: 28.5 mil lionounces of silver, 96,000 tonnes of lead, and214,000 tonnes of zinc (NI43-101 Technical Report- June 26, 2009).

Inferred Resource: 30.8 mill ion ounces of silver,

115,000 tonnes of lead and 213,000 tonnes of zinc.

Silvercorp is currently engaged in the environmentalpermitting process. GC Landscape

GC Development Project


10/20

9

NYSE: SVM

2008 Dril l Program

GC Development Project High Growth Potential


11/20

10

NYSE: SVM

2H/2010E1H/2010ADescriptionProject/Mines

$3 Million

$3 Million

$5 Million

Total Capital Expenditures Budget for Fiscal 2010: $20 Million*

$1 MillionDrilling, Permitting & SurfaceRights

GC Project

$2 MillionDevelopment and Remaining

Acquisition CostTLP, LM & HPG Mines

$6 MillionExploration, Development andMill

Ying Mine

* To be financed by internally generated cash flow of approx. $55-$60 million for FY2010.

Capital Expenditures Budget for FY2010


12/20

11

May 2008:Addition of GC/SMT

Project Resource

September 2007: Resourceexpansion at Ying and addition ofHPG Mine

May 2006: Drilling doubles Yingresources

June 2009: Updated GC TechnicalReport increases M&I Resources

November 2008:Addition of TLPand LM Resource

Apr il 2005: Silver Resource

Defined at Ying

History Resource Growth: FY2004 - FY2010

24.5

72.1

114.6 116

8.36

32.1

41.9

46.3

63.0

84.4

10.5

8.0

9.31

12.9

17.0

16.5

104.2

57.1

0

25

50

75

100

125

150

175

200

225

250

2004 2005 2006 2007 2008 2009 2010

OuncesofSilver(Millions)

Measured

Indicated

Inferred

43.3

97.1

123.0

163.4

194.7

217.0

NYSE: SVM

Growth in Resources


13/20

12

Silver Product ion - Actual and Forecast*

1.94

3.42 3.654.50

3.80 3.70 3.70

0.50 0.55

0.40 1.80 2.20 2.20

2.00

0.001.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

FY2007A FY2008A FY2009A FY2010E FY2011E FY2012E FY2013E

OuncesofS

ilver

Millions

GC

HPG+TLP+LM

Ying

4.203.96

1.94

4.7 5.0

5.0 5.6

7.5 8.0

* Capital Requirement of US$20-25 million per year over next 3 years

NYSE: SVM

Silver Production History & Forecast

5.6 6.0


14/20

13

All amounts in US Dollars unless otherwise stated.* Adjusted Net Income. Please see May 14, 2009 News Release.

3-mo Avg. Daily Vol.: 2.3 Million (NYSE+TSX)

Shares Outstanding: 161.9 Million

52-Week Hi/Low: $8.00/$1.95

Component of the NYSE Composite andS&P/TSX Composite and Global MiningIndexes

Basic Market Cap.: ~$930 Million(Based on share price on Feb 10, 2010 close)

NYSE: SVM; TSX: SVM

Capital Structure

Cash Flow: $15.9 Million (FY2009: $47.0M)

Financial Highlights for Q3/FY2010

No LT Debt; No Hedging

Cash Position: $87.8 Million

Net Income: $12.4 Million (FY2009: $27.3M*)

CDN$0.02/Share Quarterly Dividends

Revenue: $31.3 Million (FY2009: $83.5M)

NYSE: SVM

Capital Structure & Financial Highlights


15/20

14

29% 40%

54%

76%

0%

20%

40%

60%

80%

Pan American

Silver

Hecla Mining Si lver

Wheaton

Silvercorp

Margin%

* Latest Quarter ended September 30, 2009

Silvercorp Sales Mix by Metal

Zinc 8%Gold 1%

Lead 41%

Silver 50%

NYSE: SVM

$0.85

$4.91$8.57

$3.97

-6

-2

2

6

10

Coeur

D'Alene

Pan

Am er ican

Silver

Wheaton

He cla Si lve r co r p

U

S

$

Cash Cost per Oz Silver Adjusted for By-ProductCredits - Latest Quarter*

-$6.33

Lowest cost producer of silver amongindustry peers: cash cost was -$7.73per ounce of silver in Q3/2010(FY2009:-$2.77)

Highest gross profit margin amongindustry peers: Q3/2010 77%

Industry Leading Profitability


16/20

15

Silvercorp has generated positive cash flows every quarter since productioncommenced in April 2006.

NYSE: SVM

Robust Operating Cash Flows

Cash Flows From Operations: Q1/FY2007 - Q3/FY2010

$1.7

$6.7$9.9

$11.8

$18.9 $20.5$23.1

$17.2$15.2

$11.7$8.5

$10.5 $10.4

$15.9 $15.9

0.00

5.00

10.00

15.00

20.00

25.00

30.00

June

/200

6

Sep/20

06

Dec/20

06

Mar/2007

June

/2007

Sep/20

07

Dec/20

07

Mar/200

8

June

/200

8

Sep/20

08

Dec/20

08

Mar/200

9

June

/200

9

Sep/20

09

Dec/20

09Cas

hFlow

(US$Mil

lions)


17/20

16

Top Silver Producing Countr ies in 2008

118.5103.9

86.5

58.5

0

20

40

60

80

100

120

140

Peru Mexico China Australia

MozSilverPr

oduced

Source: CPM Silver Yearbook 2009

Many RegionsUnderexplored

Third Largest SilverProducing Country

Close to End Market

Rapid ConstructionTimes

Low Capital &Operating Costs

Home to world-class silverdeposits.

Fragmented primary silvermarket. Many opportunitiesfor consolidation, but difficultto obtain data (No NI43-101report).

Smelters located within 160kilometres of Silvercorpsmills.

All supplies sourced locallyand hard working labour force.

Many opportunities for newdiscoveries.

Low-cost mining equipmentand experienced labour.

Hand sorted ore for direct shipment to smelters

NYSE: SVM

The China Environment


18/20

17

Ying Mining Camp consolidated: acquired three newmines for short-term production growth.

15 quarters of positive cash flows from operations.

500% growth in silver resources from 43.3M oz in2005 to 217M oz in 2009.

Completion of new mill at Ying Mining Camp, bringingtotal milling capacity to 2,500 tpd.

Acquisition of the GC project, establishing secondproduction base for mid-term production growth.

Dividend payments of $21.05 million to date.

Listing on the NYSE in November 2009.

Growth financed by internal cash flows.

Full Tailings Dam

Miner at Ying

NYSE: SVM

Significant Achievements


19/20

18

Mine PermitAppl ication

PartialProduction/

Mine

Development

FullProduction

Status

95% JV with Private Chinese Company

Under permit application process; mine and mill constructionplanned in 2010-11 with production expected for 2012

70% JV with Private Chinese Company Acquired January 2007; Partial production in progress

77.5% JV with Henan Geological Bureau

Acquired December 2007; Partial production in progress

70% JV with Private Chinese Company

Acquired November 2007; Partial production in progress

77.5% JV with Henan Geological Bureau

Acquired March 2004; Commercial production began April 2006

GC/SMT

HPG

TLP

LM

Ying

Mine/Ownership

GC Development

District,Guangdong Province

Ying Mining

District, Henan

Province

District

* Resource estimates from NI43-101 reports on Ying and HPG mines from August 2007; TLP and LM mines from November 2008; and GC project from June 2009. Agequivalent for Ying, HPG, TLM and LM projects are calculated using metal prices of US$6.50/oz Ag, US$0.40/lb Pb and US$0.45/lb Zn. Ag equivalent for GC project iscalculated based on US$12/oz Ag, $0.75/lb Pb and $0.75/lb Zn. Calculations reflect gross metal content and have not been adjusted for metallurgical recoveries.

ResourceCategory

Resource(Tonnes)

Contained Metal Resources

Ag (oz) Pb (t) Zn (t) Ag Equiv.* (oz)

M & I 13,180,995 100,971,298 456,027 324,539 211,128,643

Inferred 14,198,806 116,087,193 633,339 336,362 270,279,520

NYSE: SVM

Summary of Projects & Resources


20/20

19

Suite #1378 - 200 Granvi lle St., Vancouver, BC, Canada V6C 1S4

Tel: 604-669-9397 | Fax: 604-669-9387 | Toll-Free: 1-888-224-1881

Email: [email protected] Website: www.silvercorpmetals.com

Head Office

China Offices

Suite 601 Building 1, China View Mansion, #A2 East GongTi RoadChaoyang District, Beijing, China 100027Tel: 86-10-8587-1130 | Fax: 86-10-8587-1132

Henan Found Mining - Xin De Ke Ji Plaza, Jin Shui Dong Road

Zhengzhou City, Henan Province, China 450052Tel: 86-371-797-1169 | Fax: 86-371-797-1570

Suite B, 14th Floor, Hua Yi Plaza, #387 Qing Nian RoadKunming City, Yunnan Province, China 650021Tel: 86-871-317-9128 | Fax: 86-871-317-0726

Silvercorps d isclosuredocuments are availablefrom the System for

Electronic DocumentAnalysis and Retrieval(SEDAR) atwww.sedar.com

NYSE: SVM

Contact Information

Silver Corp Metals Feb 2010 Presentation

Documents

Transcript of Silver Corp Metals Feb 2010 Presentation