Value. Growth. Vision
Growing and advancing one of the world’s largest
undeveloped silver and indium resources.
TSX: SAC, US OTC: SOHAFCorporate Presentation
A Growth Focused Exploration & Development Company
Q1 2011
www.soamsilver.com
Value. Growth. Vision
Forward Looking Statements
Certain statements contained herein constitute “forward-looking statements.” Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as “plans,” “intends,” anticipates,” “should,” “estimates,” “expects,” “believes,” “indicates,” “targeting,” “suggests,” “potential,” and similar expressions. These forward-looking statements are based on current expectations and entail various risks and uncertainties. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. The Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason.
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Investment HighlightsSouth American Silver Corp.
TSX:SACUS OTC:SOHAF
•Experienced management team with track record of successful project development and value creation
•Two large-scale deposits in South America• Malku Khota: one of the world’s largest silver-indium resources• Escalones: high potential copper-gold deposit
•Well defined business plan to drive shareholder value•Leveraged to silver with over $40 of silver value per $1 invested•Attractive investment value relative to peers at low value per oz•Exposure to the high-tech indium market•Potential value from new copper-gold resource•Strong focus on community relations•Well financed into feasibility
Value. Growth. Vision
Escalones
Malku Khota
World-Class DepositsTwo large-scale assets in South America
•Malku Khota, Bolivia, silver-indium project• 100% ownership• Bulk mineable open-pit, sediment hosted deposit• Low capital and operating costs and as a heap leach or heap
leach/milling operation• Resource expansion potential with only 4 km of 50 sq km
property drill tested• PEA and resource update in end of Q1-2011• Pre-Feasibility process to start in 2011 & Feasibility in 2012• Potential to be one of the top producing silver and indium mines• Funded into Feasibility
•Escalones, Chile, copper-gold project• 100% controlled, large scale target in world-class mining district
near El Teniente• Exploration program and geophysics to start Q1-2011• Potential significant copper, gold, silver deposit
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Share Capitalization2
TSX:SAC, US OTC:SOHAF
Issued & Outstanding
Fully Diluted1WarrantsOptions
97.8M 114.8M8.6M8.4M
• ~$200 million Market Capitalization
•Average trading volume 500,000 shares/day
•Well financed with +$30 million estimated in cash at year end1
•Potential NYSE-AMEX listing to increase visibility and liquidity
(1) As of November 8, 2010 with proposed $28 million financing
(1) On a fully diluted basis
(2) As of December 16, 2010
Major Shareholders
•Zamin—19.7%
•Private Swiss investors--19%
•SAC Management1 --15%
Institutional Ownership
•Sprott Asset Management
•Front Street
•K2 funds
•Kudu Partners
•U.S. Global Investors
Value. Growth. Vision
Zamin Group - Strategic InvestmentA Key Regional Player
•Well funded regional player in South American resources industry with major projects in Brazil, Uruguay, Bolivia, and Chile
•Strategic 19.7% investment positions SAC in strong financial and operational position to advance projects to feasibility
•Track record of successfully facilitating South American project development through relationships with national and state governments in the region
•Portfolio of South American projects with strong government support in permitting, rail and port infrastructure
•Bamin Project-Brazil•Valintine Project-Uruguay•Acquiring assets in Bolivia over past year
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
0
50
100
150
200
250
300
350
400
450
500
Alexco Sulliden US Gold Golden Minerals
Silvercrest MAG Silver Orko ECU Sabina Tahoe Resources
So.American Silver
Bear Creek
Comparative Resources in the AmericasSecond largest development stage silver resource
Millions of Silver Ounces
Source: Canaccord Report as of January 11, 2011Note: All companies have projects in South and/or North America
MexicoMexico
El. SalvadorMexicoMexico
ArgentinaPeru MexicoYukon
NunavutGuatemala Bolivia
Chile
Peru
Value. Growth. Vision
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
So.American Silver
Bear Creek Silvercrest Sabina Orko ECU Golden Minerals
MAG Silver Tahoe Resources
Sulliden US Gold Alexco
Enterprise Value in the AmericasUndervalued relative to peers
Source: Canaccord Report January 17, 2011Share prices as of January 14, 2011,Note: All companies have projects in South and/or North America*EV/oz truncated to $10 . Alexco excluded from early stage average EV/oz AgEq $18/oz
Average EV/oz for development stage silver companies: >$1.70/oz
*
Average EV/oz of companies with >200Moz silver resource: >$2.65/oz
Value. Growth. Vision
Development Stage Value CurvePotential value growth with project advancement
Increased value through resource
expansion
Increased value with project advancement
Early StageExploration & Development
AdvancedDevelopment Stage
(Reserves)
Production
Enterprise Value per Oz of Silver by Stage
ResourceDefinition
PEA
PFS
FS
Permits
Construct
Discovery
$
$
/oz$
Source: Recent average enterprise value per ounce of silver at various development stages for North and South American based projects. Canaccord, Wellington West and Company reports.
Value. Growth. Vision
& ETFs
Silver Supply/DemandSurging investment demand plus improving industrial consumption suggests continued demand growth with flat total supply
Source: GFMS World Silver Survey 2010
& ETF
Total Global Silver Supply Total Global Silver Demand
Value. Growth. Vision
Silver Fundamentals PositiveFor continued higher prices
•One of the only precious metals not yet to hit all-time nominal highs from the 1980’s ($35s/oz and $50/oz 1980)
•Bullish supply/demand outlook
•Silver equities generally show a 3-5x leverage to silver price moves due to profit margins
•Continued increase in investment and industrial demand for silver
•Annual mine production vs total demand remains in short-fall
•Few new major deposit discoveries
•Projected new production by analysts have failed to have
been realized
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Indium—a key strategic metalRapidly growing market for high-tech uses
Uses• Indium-tin oxide (ITO) a key component of flat panel displays (FPDs) and touch
screens• High-efficiency thin film solar panels (CIGS Photo-Voltaics), and LED lighting • Fiber optics, specialized and transparent semiconductorsSupply• Global indium use growing rapidly and could surpass available supply from by-
product zinc refining at current price range• One of the most scarce strategic metals due to low recycling and few primary
producers
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Indium FundamentalsCompelling supply/demand dynamics
Indium Supply/Demand dynamics• Indium highlighted in UN and US DOE studies as critical technology metal at risk
for potential shortage along with several other key rare earth metals • China is largest producer and consumer of indium and has imposed export quotas
and tariffs like other key high-technology specialty metals• Zinc market growing at 1-3% annually with indium market estimated at 15-20%
growth• Current price ~$600/kg with five-year prices from $400/kg to over $1000/kg
Malku Khota Annual Indium Production• Malku Khota projected to be one of the worlds largest indium producers• Potential to represent 10% or more of global mine supply
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Indium DemandGrowing demand in high-tech markets
Growth assumptions based on data from Displaybank in LCD TV Association “LCD TV Matters”-Volume 3, Issue 2, February 2010 , Strategies Unlimited, August 2009 , Solarbuzz, Photon International, GFMS , Nanomarkets, and the US Department of Energy Critical Minerals Strategy Report
End
-use
Mar
ket
Dem
and
(to
nn
es)
0
500
1000
1500
2000
2500
2010 2011E 2012E 2013E 2014E 2015E 2016E
Solar Energy
LED Lighting
LCD Flat Panels
2010 total indium production
Value. Growth. Vision
Indium FundamentalsZin
c Pro
du
ction
(tho
usan
d to
nn
es)
U.S
. In
diu
m D
eman
d (
ton
ne
s)
Zinc Production vs. Indium Demand (U.S.)
Source: U.S Department of Energy: Critical Materials Strategy, December 2010; Zinc Production USGS Materials Flow of Zinc in the US. 1850-1990, USGS Minerals Yearbook 1994-2008
0
200
400
600
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1400
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20
08
Indium
Zinc Production
Value. Growth. Vision
0
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100
150
200
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300
Current Rate of Consumption
World at 1/2 the US Rate of Consumption
SILV
ER
Key Metal Consumption vs ReservesYe
ars
of
Sup
ply
Remaining Years of Supply
IND
IUM
Value. Growth. Vision
Opportunity in BoliviaAn emerging resource based economy
• Bolivia experiencing its best economy in 30 years
• Member of Mercosur Regional trade organization with Brazil as largest trading partner
• One of the world’s premier silver districts with billions of ounces of historical production
• Planned $32 billion 5-7 year infrastructure build-out by Bolivian government for new rail and road corridors and hydropower generation
• Three Major silver mines built within last four years
• Substantial resource industry investments in Bolivia
Jindal Steel of India investing US$2.3 billion for 50% interest in El Mutun iron ore deposit
Petrobras of Brazil—Latin America’s largest publicly traded oil company – investing US$1 billion of new capital into the Bolivian gas fields
Repsol of Spain investing $1.6 billion to increase gas production in Bolivia
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Silver Mines in BoliviaOne of the world’s premier silver mining districts
• Historical district production of billions of ounces of silver
• Highly prospective & under-explored
• Increase from 9th largest global silver producer to 5th largest with completion of three major silver mines in past four years:
Pan American Silver – San Vincente Coeur D’Alene - San Bartolome Sumitomo - San Cristobal
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Malku Khota Project, BoliviaOne of the world’s largest silver-indium resources
• 50 square km, 100% owned, road accessible project, long life open pit mine
• low capital and operating costs and high internal rate of return
• Ongoing drill campaign with recent higher grade discoveries
• Potential to be one of the top primary silver and indium producing mines
TSX:SACUS OTC:SOHAF
Indicated: 145 M oz of silver & 845 tonnes of indiumInferred: 178 M oz of silver & 968 tonnes of indium
Q4 2010 Q1 2011 2H 2011 2012
Malku Khota
Completion of resource update drill
program
Updated resource estimate
Pre -feasibility Study underway
Feasibility
Updated PEA with increase throughput
Permitting Process
Value. Growth. Vision
Established InfrastructureLow projected capital and operating costs
• Open pit, bulk mineable
• Accessible by road
• Commercial power within 15km
• Access to water
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Enrichment starts at surface Host rock sandstone with disseminated silver, indium, gallium, lead, zinc and copper
MineralizationOpen pit, bulk mineable deposit
Average grade first ten years:• Silver: 38.6 g/t (60 g/t Ag Eq) • Indium: 8.1 g/t•Economic cut-off grade <10 g/t (at $15/oz Ag)
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
MineralizationGeological formations looking south from Limosna
High Grade Sandstone
1160 g/t Silver
Wara WaraSandstone
Malku KhotaSandstone
Aroifilla Fm
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Malku Khota DrillingGrade thickness map
• 75 drill holes in current resource with updated resource for Q1-2011
• 2010 program focused on in-fill & confirmatory drilling
• 2011 program to target conversion from resources to reserves & expansion drilling
• Mineralization begins at surface
• Deposit open along trend and down dip with excellent potential for expansion
• New discovery of higher grade zones and down dip expansion of surface mineralization
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
New Exploration ResultsDiscovery of broad continuous mineralization horizonLMD048: 286 meters grading 76 g/t Ag Eq Grade thickness values of over 21,500 g-m AgEq
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Malku Khota DepositOnly 4km of 50 sqkm property drill tested
• 2010 program focused on in-fill and confirmation drilling for PEA Update
• Excellent potential to expand resources
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Metallurgy Flow SheetAcid-Chloride Leach
Crushing
Heap Leach or Milling with Acid
Solution
Silver, Gold and Copper Recovery
Indium and Gallium Recovery
Lead Recovery
Zinc Recovery
Open Pit Mining
Further refining with solvent extraction (SX-EW ) process to metal dore or high purity concentration
• Similar process as used for SX-EW* copper-oxide heap leach and by zinc refineries for indium
• Similar recoveries for silver/gold as for cyanide leach
• Production of high purity silver bars and indium ingots on site
• Additional production of by-product metals including lead, zinc, copper and gallium
TSX:SACUS OTC:SOHAF
* solvent extraction and electo-winning
Value. Growth. Vision
Summary of PEA 2009Updated PEA with expanded throughput for Q1 2011Pincock, Allan and Holt
Heap Leach Operation – 20,000 Tonnes per Day
Recovery: Silver 80%, Indium 70%
Annual Production: 6.4 M oz Silver2
37,200 kgs Indium2
Cash Cost: $3.75 / oz Ag
Mine Life: 36 Years
2009 2010 Recent
Base Avg’s High
Silver Price/oz $13.30 $15.00 $20.00
Indium Price/kg $530 $550 $1,000
Net Annual Cash Flow2: $74M/yr $86M/yr $135M/yr
Net Total Cash Flow: $1.2B $1.5B $2.7B
Pre-Tax NPV: >$300M >$500M >$1,000M
Years to Payback: 1.4 years 1.2 years <1 year
Base Case Silver Price: US$13.30/ozBase Case Indium Price: US$530/kg
70%
18%
12%
Revenue Distribution for 2009 Base Case
Silver
Indium
Lead/Copper/Zinc
(1) In US dollars, March 2009, PEA by Pincock Allan and Holt. Updated study utilizing higher production levels and new cost estimates anticipated Q1-2011
(2) First ten years of production
Value. Growth. Vision
0
2
4
6
8
10
12
Caraco
les
Wo
naw
inta
Co
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cia
Marco
na
Du
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Casp
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SanJo
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El Agu
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Santa A
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El Saucito
Navid
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Malku
Kh
ota
Co
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Pascu
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Near Term Mine Development ProjectsSAC one of largest near-term producers at 20,000 tpd
• Annual estimated potential silver production of new development projects anticipated in the next 2-4 years
Source: CPM Silver Yearbook 2010
Oxian
a
Intrep
id M
ines
Co
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Co
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atedA
nto
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Fortu
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Min
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Pan A
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Bear C
reek
Jinch
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Gro
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Ch
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esou
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Au
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esou
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Silvermex
Reso
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Fresnillo
Plc
Go
ld R
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So A
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rican Silve
r
An
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Greystar
Reso
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Barrick
Ch
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Gab
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Yuko
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No
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Min
ing
Alexco
Reso
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Wild
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Bear C
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25
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Value. Growth. Vision
Global Silver Industry Cash Cost CurveAnticipated low-cost silver production
8-
4-
0
4
8
12
16
0%10%20%30%40%50%60%70%80%90%100%
Cumulative Percentile of Silver Mine Production Cost
Tota
l Cas
h C
ost
Pe
r O
un
ce o
f Si
lve
r
Industry AverageCash Cost$5.25/oz
Malku Khota6.4 Mozs/yr~ $3.75/oz
Source: GFMS World Silver Survey 2010
Value. Growth. Vision
Escalones-Copper-Gold project, ChileHigh potential, large-scale target
• 70 square km,100% controlled, road accessible, large scale system
• Located in world-class copper mining district near El Teniente
• Historic drilling shows >1% copper grades at surface and untested porphyry system grading 0.6% copper
• Additional significant gold, silver and molybdenum credits
• Exploration drill program targeted for Q1 2011
• Resource estimate targeted for 2nd half of 2011
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Drill Results Grad Thickness MapLarge-scale porphyry system
• Open in all directions
• Strong historic results
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
EscalonesGeological cross-section
• Enriched zones with high grades at surface at over >1% copper with significant gold and molybdenum
• Large scale porphyry target intercept of 176 m @ 0.6% copper with additional gold, silver and molybdenum
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Community RelationsA key to successful project development
• Assistance of BSR* to develop proactive community relations strategy• Two full-time indigenous community relations officers working in region• Objectives to facilitate economic development in communities
*Business for Social Responsibility, San Francisco, CA
Value. Growth. Vision
Project MilestonesValue drivers over the next 6-12 months
• Malku Khota Silver and Indium Project, Bolivia Drill campaign underway with additional drills being mobilized Updated resource estimate targeted Q1 2011 Updated Preliminary Economic Assessment at higher throughput Q1-2011 Pre-feasibility targeted for 2011 and feasibility for 2012
• Escalones Copper and Gold porphyry project, Chile Planning work underway for initial exploration program Q1 2011 Target for initial resource estimate in 2nd half of 2011 Potential for significant deposit of copper, gold and silver
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
0
5
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50
Alexco Silver ETF US Gold Sulliden Tahoe Resources
MAG Silver Golden Minerals
Sabina ECU Orko Silvercrest Bear Creek So.American Silver
Leveraged to SilverValue of silver per dollar invested
SAC has some of the best leverage to silver of any development stage company with over $40 of silver value per $1 invested
Source: Canaccord as of January 17, 2011, Share prices updated January 14, 2011Note: all companies have projects in South and/or North AmericaCalculated using $25/oz Ag. Dollar value of silver per $1 invested = (silver resource/shares outstanding) x $25/oz silver) divided by share priceValue only shown for silver with no contribution from other metals
Silver value per $1 invested
Average value of silver <$8 of silver per $1 invested*
Value. Growth. Vision
Why South American Silver?Investment highlights
• World-class scale projects with excellent expansion potential
• Track record of discovery and successful project development
• Growing shareholder value through resource expansion and advancing
projects up the development value curve toward feasibility
• Leveraged to silver with over $40 of silver value per $1 invested
• Attractive investment value relative to peers at low value per oz
• Exposure to rapidly growing Indium high-technology market
• Potential new value from copper resource definition and expansion
• Continued investor outreach to broaden market awareness of Company
• Potential near-term NYSE-AMEX listing in the U.S.
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
TSX: SACOTC: SOHAF
Phone: 604.681.69261.855.681.6926
www.soamsilver.com
Greg JohnsonPresident & CEO
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Relative Stock PerformanceSAC outperforming key silver & gold indices
•Trading liquidity increasing with average volume of 550,000 shares/day
•SAC undervalued relative to peers at $0.50/oz vs average of more than $1.70/oz for early stage resources and $2.65/oz for >200Moz resources
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Management TeamA track record of success
Ralph Fitch, Executive Chairman Co-founder of South American Silver, High Desert Gold, and General Minerals Key role in discovery of Collahuasi copper porphyry , Malku Khota, Vizcachitas, and Escalones deposits
Greg Johnson, President and CEO Co-founder of NovaGold, key role in growing company from $50 million to $2 billion market capitalization Recognized for discovery and advancement of the 40 M oz Donlin Creek gold deposit for NovaGold and Barrick
William Filtness, Chief Financial Officer Chartered Accountant with twenty plus years of financial experience, including Manager, Corporate Development at Aurizon Mines
Felipe Malbran, Vice President of Exploration Extensive experience in exploration management in Bolivia, Chile, Peru and Argentina Key role in discovery of Malku Khota, Vizcachitas, and Escalones deposits
Phillip Brodie-Hall, Vice President of Project Development Global industry experience in engineering construction and project development experience covering nearly every aspect of evaluation,
feasibility studies and project development in the mining and mineral processing industriesDavid Dreisinger, Vice President of Metallurgy
Professor and Industrial Research Chair in Hydrometallurgy at the University of British Columbia (UBC) Actively involved in developing and commercializing hydrometallurgical process at a number of operating mines in Australia and Southeast
Asia.Richard Doran, Vice President and corporate secretary
Former VP Investor Relations for General Minerals and Marketing Manager for Chevron ResourcesAndrew Clark, Manager of Project Implementation
Global industry experience in the design and management of industrial, mining, materials handling, chemical and petrochical projects from feasibility studies through to commissioning and handover of completed facilities.
Xavier Gonzales Yutronic, General Manager Compañía Minera Malku Khota S.A. Mining Industry experience in finance, accounting, logistics, human resources and community relations at Comsur S.A., Sinchi Wayra
(Glencore) from 2005-2007, and Compañía Minera Malku Khota S.A. from October 2008 to date
TSX:SACUS OTC:SOHAF
Value. Growth. Vision
Board of DirectorsStrong industry and financial experience
Ralph Fitch, Executive Chairman Greg Johnson, President and CEO
Antonio Canton, Director - Mr. Canton is an independent consultant for international companies in marketing, finance and real estate. He is a director of a number of Swiss companies and brings to the board extensive experience in accounting and finance.
Peter Harris, Director - Mr. Harris is an engineer with over 40 years of mining industry experience including as Senior VP and Chief Operating Officer at Nova Gold Resources Inc., and Senior VP of Project Development at Placer Dome Inc. He has been involved in the construction and operation of over 20 different mines in North and South America, Africa, Australia and PapuaNew Guinea.
William Murray, Director - Mr. Murray is an engineer in the mining industry with over 33 years of experience in construction management and project evaluation in North America and Africa. He currently serves as the executive chairman and director of Polymet Mining Corp. Mr. Murray has been involved in numerous successful projects while working at Fluor Daniel, Denison Mines, Optimum Project Services and Anglo American Corp. in South Africa.
Paul Haber, Director - Mr. Haber is a Chartered Accountant and a Certified Public Accountant with a strong background in US/Canadian accounting and finance. Presently manages Haber & Co. Ltd. Has previously been Chief Financial Officer and Corporate Secretary of a TSX Venture listed company.
John Watson, Director - Mr. Watson has been the President of a TSX Venture Exchange listed company since 2002. He is also the manager/member of a limited liability corporation that owns and manages commercial real-estate.
Tina Woodside, Director - Ms. Woodside is currently the head of the corporate finance department in Gowlings’ Toronto office and a member of the firm’s National Executive Committee. Ms. Woodside practices corporate and securities law with particular emphasis on corporate finance, mergers and acquisitions and corporate governance matters.
TSX:SACUS OTC:SOHAF
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