Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (February 2023)
38 slides from Silvercorp Metals's investor presentation, February 2023
Slide 1: Profitable Silver Producer Positioned to Grow
PROFITABLE SILVER PRODUCER POSITIONED TO GROW Corporate Presentation TSX: SVM | NYSE AMERICAN: SVM February 2023 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 $521M* • $0 debt, no financing since 2010 • Strategy – worldwide M&A targeting >$50M annual FCF • High margin/long mine life with reasonable capital expenditures and timelines Cash • US$0.025/share an
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 – December 2022) Ying Mining District, Henan Province (SGX, HPG, HZG, TLP, LME, LMW and DCG mines) • Silver: +87 Moz. • Lead + Zinc: +1.2 Blbs. • Profit Distribution: >US$520M • +15
Slide 5: Management Focus on Generating Free Cash Flow
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Asset Quality – Lower Cost, Higher Margin Compared to Peers (1) 8.5% 41% (2) Calendar Year (3) (3) (3) (4) $9.28 1) Indicated in calendar quarters 2) Net of by-product credits 3) Changed reporting basis to AgEq 4) Only reflec
Slide 6: 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 7: Providing Value for Investors
PROVIDING VALUE FOR INVESTORS TSX: SVM | NYSE AMERICAN SVM • Stock prices as of February 27, 2023; LTM results are most recent reported. Data Source: Capital IQ, Company filing 7
Slide 8: Ying District – Growth Through Drilling, Optimization, Expansion & Consolidation
YING DISTRICT – GROWTH THROUGH DRILLING, OPTIMIZATION, EXPANSION, & CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM Drilled ~1,000,000 m in 2020-2022 • 270,000+ metres planned in FY2024 • Extensions of known mineralization & newly discovered Au veins in resource area Mine optimization in progress • Impro
Slide 9: Extensive Exploration for Organic Growth
EXTENSIVE EXPLORATION FOR ORGANIC GROWTH TSX: SVM | NYSE AMERICAN SVM Silvercorp’s extensive drilling & tunnelling Ying: 2,210 km of drilling and 735 km of tunnelling since 2004 GC: 395 km of drilling and 100 km of tunnelling since 2004 KM Calendar Year Benefits of drilling: 1) Made new discoveries,
Slide 10: Organic Production Growth
ORGANIC PRODUCTION GROWTH TSX: SVM | NYSE AMERICAN SVM Fiscal Year Silvercorp’s fiscal year is April 1-March 31 * Consolidated Fiscal 2023 silver production based on nine-month output (Apr. 1 to Dec. 31, 2022) plus expected Fiscal Q4 production ** Mid-point of guidance. Expected Fiscal 2024 Ying pro
Slide 11: 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: > 87 Moz. Lead + Zinc: > 1.2 Blbs. Calendar Year • See Appendix II
Slide 12: Incubating World Class Opportunities – Why New Pacific Metals
INCUBATING WORLD CLASS OPPORTUNITIES – WHY NEW PACIFIC METALS TSX: SVM | NYSE AMERICAN SVM 12
Slide 13: Catalysts
CATALYSTS TSX: SVM | NYSE AMERICAN SVM 1) Increased production for FY2024 2) Additional drilling to upgrade resources to reserves and make new discoveries 3) Mine optimization programs at Ying and GC 4) Advance Kuanping to construction status with updated plan and cost estimates 5) Constructing a ne
Slide 14: 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 15: FY2022 Sustainability Report
FY2022 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 I
Slide 16: Ownership & Coverage
OWNERSHIP & COVERAGE TSX: SVM | NYSE AMERICAN SVM Top 10 Institutional Investors % O/S Analyst Coverage 1 Van Eck Associates 4.74 Canada Ryan Thompson BMO Capital Markets 2 Global X Management 2.73 Felix Shafigullin Eight Capital 3 Renaissance Technologies 2.32 Justin Stevens PI Financial 4 Connor C
Slide 17: 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 18: Appendices
APPENDICES TSX: SVM 18 NYSE AMERICAN: SVM
Slide 19: 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 Derek Liu, MBA, CGA, CPA David Kong, CA, CPA, Former Ernst & Chief Financial Officer Young LLP Partner; over 30 years PubCo. exp
Slide 20: Fiscal 2023 Production and Capex
FISCAL 2023 PRODUCTION AND CAPEX TSX: SVM | NYSE AMERICAN SVM FY2023 Production Head grades Metal production Production costs Ore processed Silver Lead Zinc Silver Gold Lead Zinc Cash cost AISC* (tonnes) (g/t) (%) (%) (Koz) (Koz) (Klbs) (Klbs) ($/t) ($/t) Nine months ended December 31, 2022 Actual Y
Slide 21: Fiscal 2024 Production and Capital Expenditure Guidance
FISCAL 2024 PRODUCTION AND CAPITAL EXPENDITURE GUIDANCE TSX: SVM | NYSE AMERICAN SVM FY2024 Production Guidance FY2024 Capital Expenditure Guidance 21
Slide 22: Revenue Percentage by Metal
REVENUE PERCENTAGE BY METAL TSX: SVM | NYSE AMERICAN SVM Base Metals: 43% Gold: 3% Silver: 54% Calendar Quarters 22
Slide 23: Long-Term Commitment to Responsible Mining & ESG
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 23 plant
Slide 24: Long-Term Commitment to Responsible Mining & ESG
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 24 GC Mine tailings dry stacking
Slide 25: Ying Mining District, Henan
YING MINING DISTRICT, HENAN TSX: SVM | NYSE AMERICAN SVM • SGX, TLP, LME, LMW, HPG, HZG and DCG underground mines have Ying Mining District: 4 mining permits 68.59km² identified over 300 veins • 2 mills of 3,200 tpd capacity produce silver-lead and zinc concentrates • 6 smelters within 200 km ² • Pr
Slide 26: Extensive Exploration for Organic Growth
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 26
Slide 27: Extensive Exploration for Organic Growth: Finding Gold 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 28: LMW Mine: Low Angle Au or Au-Cu Veins, Wide Ag-Pb-Cu Zone
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 29: 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 February 14, 2023: Silver=4.910 RMB/gram, lead=15,125 RMB/tonne, Zinc=23,110 RMB/tonne, all including 13% VAT. Conve
Slide 30: 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 31: BYP Gold Mine
BYP GOLD MINE TSX: SVM | NYSE AMERICAN SVM Preparing for production: • Lead-Zinc mine suspended August 2014 • 2019 NI 43-101 gold resource identified 421,000 oz M&I and 110,000 oz inferred • Applied for a new gold mining permit 500 tpd Mill at the BYP Mine 31
Slide 32: Lead & Zinc Production
LEAD & ZINC PRODUCTION > 1 Billion Pounds of Lead and Zinc Over 15 Years TSX: SVM | NYSE AMERICAN SVM Fiscal Year Silvercorp’s fiscal year is April 1-March 31 * Consolidated Fiscal 2023 lead & zinc production based on nine-month output (Apr. 1 to Dec. 31, 2022) plus expected Fiscal Q4 production **
Slide 33: 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 34: Management Focus on Generating Free Cash Flow
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 Period • Realized silver price is calculated using the Shanghai Metal Exchange price, less smelter deduction an
Slide 35: 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 36: 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 37: 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 38: 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
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