Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (November 2022)
39 slides from Silvercorp Metals's investor presentation, November 2022
Slide 1: Profitable Silver Producer Positioned to Grow
PROFITABLE SILVER PRODUCER POSITIONED TO GROW Corporate Presentation TSX: SVM | NYSE AMERICAN: SVM November 2022 1
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS TSX: SVM | NYSE AMERICAN SVM Cautionary Note Regarding Forward-Looking Information and Forward-Looking Statements This presentation includes statements concerning future operations, prospects, strategies, plans, projections, forecasts, financial conditions and economic performa
Slide 3: Compelling Value for Profitable and Growing Silver Producer
COMPELLING VALUE FOR PROFITABLE AND GROWING SILVER PRODUCER TSX: SVM | NYSE AMERICAN SVM Market Cap $507M (11/23/2022) • $0 debt, no financing since 2010 • US$0.025/sh annual dividend + share buyback program • ~$175 M returned to shareholders since inception Cash • Positioned for worldwide growth op
Slide 4: Stable & Profitable Silver Producer Positioned to Grow
STABLE & PROFITABLE SILVER PRODUCER POSITIONED TO GROW TSX: SVM | NYSE AMERICAN SVM Historical Production (April 2006 – September 2022) Ying Mining District, Henan Province (SGX, HPG, HZG, TLP, LME, LMW and DCG mines) • Silver: +85 Moz. • Lead + Zinc: +1.2 Blbs. • Profit Distribution: >US$520M • +15
Slide 5: China Investment Considerations
CHINA INVESTMENT CONSIDERATIONS TSX: SVM | NYSE AMERICAN SVM 1) Silvercorp operations are held through Chinese entities • Significant employers, taxpayers and contributors to the local economies • We supply necessary raw materials for manufacturing exporters 2) Many companies depend on China for man
Slide 6: Management Focus on Generating Free Cash Focus: Asset Quality
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Asset Quality – Lower Cost, Higher Margin Compared to Peers (1) 9.3% 36% (2) (3) (3) (3) (4) $8.25 1) Indicated in calendar quarters 2) Net of by-product credits 3) Changed reporting basis to AgEq 4) Only reflects silver segm
Slide 7: Management Focus on Generating Free Cash Flow
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Calendar Year Calendar Year Adjusted net income = adjusted for one-time non-cash items, FX gain(loss), Free cash flow = operating cash flow less capital expenditures, less capital lease investment in associates gain(loss), eq
Slide 8: Providing Value for Investors
PROVIDING VALUE FOR INVESTORS TSX: SVM | NYSE AMERICAN SVM • Stock prices as of Nov. 23, 2022; LTM results are most recent reported. Data Source: Capital IQ, Company filing 8
Slide 9: Ying District to Grow Through Drilling, Expansion, & Consolidation
YING DISTRICT TO GROW THROUGH DRILLING, EXPANSION, & CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM Drilled 629,000 m in 2020-2021 • Above or beneath previously mined stopes stopped due to vein variability • Veins in resource area at shallower elevations with only limited drilling • Newly discovered Au
Slide 10: Extensive Exploration for Organic Growth
EXTENSIVE EXPLORATION FOR ORGANIC GROWTH TSX: SVM | NYSE AMERICAN SVM Silvercorp’s extensive drilling & tunnelling Ying: 8,167 drill holes in 1,940 km of drilling and 680 km of tunnelling GC: 2,563 drill holes in 350 km of drilling and 90 km of tunnelling Calendar Year Benefits of drilling: 1) Made
Slide 11: Making New Discoveries - Finding Gold Deposits in Silver Mines
EXTENSIVE EXPLORATION FOR ORGANIC GROWTH TSX: SVM | NYSE AMERICAN SVM Making new discoveries - Finding Gold Deposits in Silver Mines Drilling at HPG Mine discovered a new “Rhyolitic Breccia Dyke” type of broad Au-Ag zone: Breccia dyke (extends along a 2 km NW trend, up to 200 m thick and over 1 km d
Slide 12: LMW Mine: Low Angle Au or Au-Cu Veins
EXTENSIVE EXPLORATION FOR ORGANIC GROWTH TSX: SVM | NYSE AMERICAN SVM LMW Mine: Low Angle Au or Au-Cu Veins, Wide Ag-Pb-Cu Zone, New High-Grade Ag-Pb-Zn Veins Discovered Vein LM50: Hole ZKX0796 intercepted 2.74 m true width @ 11.82 g/t Au Hole ZKX0423 intercepted 1.62 m true width @ 10.53 g/t Au Hol
Slide 13: Extensive Exploration: Development System & 3D Models
EXTENSIVE EXPLORATION FOR ORGANIC GROWTH TSX: SVM | NYSE AMERICAN SVM Development System & 3D Models at Ying One of Eight Core Logging Warehouses Tunnels and Drill Holes Seven Core Storage Facilities 13
Slide 14: Organic Production Growth
ORGANIC PRODUCTION GROWTH TSX: SVM | NYSE AMERICAN SVM Fiscal Year ** Mid-Point of guidance. Expected 2023 Ying production includes silver equivalent gold production at a 65:1 ratio 14
Slide 15: Reserve and Resource Growth Through Extensive Exploration
RESERVE AND RESOURCE GROWTH THROUGH EXTENSIVE EXPLORATION TSX: SVM | NYSE AMERICAN SVM Extensive Drilling & Tunnelling Grows Silver Reserves & Resources Net of Depletion (Remaining Mining Life >15 Years) Historical Production Silver: > 85 Moz. Lead + Zinc: > 1.2 Blbs. Calendar Year • See Appendix II
Slide 16: Incubating World Class Opportunities – Why New Pacific Metals
INCUBATING WORLD CLASS OPPORTUNITIES – WHY NEW PACIFIC METALS TSX: SVM | NYSE AMERICAN SVM 16
Slide 17: Ongoing M&A Efforts to Create Value
ONGOING M&A EFFORTS TO CREATE VALUE TSX: SVM | NYSE AMERICAN SVM Identifying, acquiring or investing in value-creating projects • Focus on projects with defined resources and high margins (i.e. high grade) and/or long mine life potential • Targeting >$50M annual free cash flow that can be developed
Slide 18: Catalysts
CATALYSTS TSX: SVM | NYSE AMERICAN SVM 1) Increased production guidance for F2023 2) Further 300,000+ metres of drilling planned for FY2023 to upgrade resources to extend mine life, and to make new discoveries 3) Mining permit for the Kuanping gold-silver project and complete 12,000 m drill program
Slide 19: Long-Term Commitment to Responsible Mining & ESG
LONG-TERM COMMITMENT TO RESPONSIBLE MINING & ESG TSX: SVM | NYSE AMERICAN SVM Safety, Efficiency, Sustainability • Build a strong corporate culture in safety, social ecological systems and harmonious environments • Integrate innovative technology to optimize our operations • Continuously being large
Slide 20: Responsible Mining & ESG: Construct Green Mines
LONG-TERM COMMITMENT TO RESPONSIBLE MINING & ESG TSX: SVM | NYSE AMERICAN SVM Construct Green Mines Solid Waste Reduction Initiatives GC Mine Site (Birds Eye View) GC Mine Tailings Back Fill Facility Ying Tailings Storage Facility Ying 1 M t/y waste rock aggregate 20 plant
Slide 21: Responsible Mining & ESG: Water Recycling and Certificates
LONG-TERM COMMITMENT TO RESPONSIBLE MINING & ESG TSX: SVM | NYSE AMERICAN SVM Recycle treated waste water to mills for milling Environment Management Certificates SGX Mine waste water treatment system 2022 ESG Best Practice Award 21 GC Mine tailings dry stacking
Slide 22: F2022 Sustainability Report
F2022 SUSTAINABILITY REPORT TSX: SVM | NYSE AMERICAN SVM Highlights of Our Responsible Performance & Accomplishments HEALTH & SAFETY ENVIRONMENT SOCIAL GOVERNANCE • Zero work-related • Zero material • Zero grievances • Formed fatalities incidents • Donated to public Sustainability • 100% of • EMS IS
Slide 23: Ownership & Coverage
OWNERSHIP & COVERAGE TSX: SVM | NYSE AMERICAN SVM Top 10 Institutional Investors % O/S Analyst Coverage 1 Van Eck Associates 4.62 Canada Ryan Thompson BMO Capital Markets 2 Renaissance Technologies 2.96 Felix Shafigullin Eight Capital 3 Global X Management 2.80 Justin Stevens PI Financial 4 Connor C
Slide 24: Fiscal 2023 Production Guidance
FISCAL 2023 PRODUCTION GUIDANCE TSX: SVM | NYSE AMERICAN SVM Head grades Metal production Production costs Ore processed Silver Lead Zinc Silver Lead Zinc Cash cost AISC (tonnes) (g/t) (%) (%) (Koz) (Klbs) (Klbs) ($/t) ($/t) Six months ended September 30, 2022 Actual Ying Mining District 428,317 262
Slide 25: Fiscal 2023 Capital Expenditure Guidance
FISCAL 2023 CAPITAL EXPENDITURE GUIDANCE TSX: SVM | NYSE AMERICAN SVM Expensed Expensed Capitalized Development and Expenditures Tunneling Drilling Exploration Exploration and Capitalized Exploration Equipment & Mining Drilling Ramp Development Development Tunnels Drilling Mill and TSF Total Prepara
Slide 26: Leadership: A Solid History of Value Creation
LEADERSHIP: A SOLID HISTORY OF VALUE CREATION TSX: SVM | NYSE AMERICAN SVM Management Board of Directors Rui Feng, Ph.D., Geology Rui Feng, Ph.D., Geology Chairman and CEO, Director Derek Liu, MBA, CGA, CPA David Kong, CA, CPA, Former Ernst & Chief Financial Officer Young LLP Partner; over 30 years
Slide 27: Head Office
HEAD OFFICE Suite #1750 1066 West Hastings St. Vancouver, BC, Canada V6E 3X1 Tel: 604-669-9397 Fax: 604-669-9387 Toll-Free: 1-888-224-1881 Investor@silvercorp.ca www.silvercorp.ca Watch The Most Recent Interview Silvercorp’s disclosure documents are available from the System for Electronic Document
Slide 28: Appendices
APPENDICES TSX: SVM 28 NYSE AMERICAN: SVM
Slide 29: Management Focus on Generating Free Cash Flow: Silver Price
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Profit (Green Line Below) on every tonne of ore mined Silver Price (US$ per ounce) Per Tonne Value (US$) Calendar Year • Realized silver price is calculated using the Shanghai Metal Exchange price, less smelter deduction and
Slide 30: Revenue Percentage by Metal
REVENUE PERCENTAGE BY METAL TSX: SVM | NYSE AMERICAN SVM Base Metals: 43% Gold: 3% Silver: 54% Calendar Quarters 30
Slide 31: Realized Metal Price Examples
REALIZED METAL PRICE EXAMPLES TSX: SVM | NYSE AMERICAN SVM Silver Lead Zinc US$ Per Ounce US$ Per Pound US$ Per Pound * Net of value added tax Shanghai Metal Exchange quoted prices on November 23, 2021: Silver=4.865 RMB/gram, lead=15,000 RMB/tonne, Zinc=23,750 RMB/tonne, all including 13% VAT. Conve
Slide 32: Ying Mining District, Henan
YING MINING DISTRICT, HENAN TSX: SVM | NYSE AMERICAN SVM • SGX, TLP, LME, LMW, HPG, HZG and DCG underground mines Ying Mining District: 4 mining permits 68.59km² have identified over 300 veins • 2 mills of 3,200 tpd capacity produce silver-lead and zinc concentrates ² • 6 smelters within 200 km ¹ •
Slide 33: GC Mine
GC MINE TSX: SVM | NYSE AMERICAN SVM Updated MRE NI 43-101 March 2021: • P&P Reserves up 8% from the last Resource Estimate Report, despite 2 years mine production depletion • Measured and indicated resources up 11% and inferred resource up 17% • Projected LOM has the potential to go beyond 2034 GC
Slide 34: BYP Gold Mine
BYP GOLD MINE TSX: SVM | NYSE AMERICAN SVM Preparing for production: • 2019 NI 43-101 gold resource identified 421,000 oz M&I and 110,000 oz inferred • Lead-Zinc mine suspended August 2014 • Actively re-applying for a new mining permit with gold 500 tpd Mill at the BYP Mine 34
Slide 35: Lead & Zinc Production
LEAD & ZINC PRODUCTION > 1 Billion Pounds of Lead and Zinc Over 15 Years TSX: SVM | NYSE AMERICAN SVM 103* * Silvercorp’s fiscal year is April 1-March 31 * Future numbers are the mid point of guidance 35
Slide 36: Growing Reserves & Resources - Lead & Zinc
GROWING RESERVES & RESOURCES - LEAD & ZINC CY2005 – CY20211 (After > 1 Blbs Lead & Zinc Produced) 2 TSX: SVM | NYSE AMERICAN SVM Calendar Year 1. Measured & Indicated Resources inclusive of Reserves. See Appendix III, IV and V for breakout of Measured, Indicated and Inferred, Proven and Probable cat
Slide 37: Summary of Reserves
SUMMARY OF RESERVES1,2 TSX: SVM | NYSE AMERICAN SVM Average Grades Contained Metal Reserves Reserve Tonnes Project Silver Gold Lead Zinc Silver Gold AgEq3 Lead Zinc Category (Million) (g/t) (g/t) (%) (%) (Moz) (Koz) (Moz) (Kt) (Kt) Proven 5.78 255 0.18 3.75 1.22 47 34 50 217 70 Ying Mining Probable
Slide 38: Summary of Resources
SUMMARY OF RESOURCES1,2 TSX: SVM | NYSE AMERICAN SVM Contained Metal Resources Average Grades Resource Tonnes (Inclusive of Reserves) Project Category (Million) Silver Gold Lead Zinc Silver Gold AgEq3 Lead Zinc (g/t) (g/t) (%) (%) (Moz) (Koz) (Moz) (Kt) (Kt) Measured 8.78 262 0.21 3.98 1.25 74 60 78
Slide 39: Endnotes
ENDNOTES TSX: SVM | NYSE AMERICAN SVM • Qualified Persons • Guoliang Ma, P. Geo., is a Qualified Person within the meaning of National Instrument 43-101 – Standards Of Disclosure for Mineral Projects (“NI 43-101”) who supervised the preparation of the scientific and technical information of Silverco
Silvercorp Metals — Investor Presentation (November 2022) on 6ix