Slide 1: The Premier Silver Producer in China
The Premier Silver Producer in China Corporate Presentation August 26, 2016 0
Slide 2: Forward Looking Statements
Forward Looking Statements Safe Harbor Statement under the United States Private Securities Litigation Reform Act of 1995: Except for the statements of historical fact contained herein, the information presented constitutes "forward-looking statements" within the meaning of the Private Securities Li
Slide 3: Overview: Strategically Focused on Silver Mining in China
Overview: Strategically Focused on Silver Mining in China Ying Mining District, Henan Province FY2017: 4.6Moz Silver China BYP Mine, Reserves & Silver Lead Zinc (MOz) (Kt) (Kt) Hunan Province Resources1 (On Care and Maintenance) Proven & Probable Reserves 101.0 442.5 267.5 Measured & Indicated GC Pr
Slide 4: Silvercorp's Strategy
Silvercorp’s Strategy Our Strategy • Acquire under-explored small-scale mining projects with resource potential • Grow these assets organically • Focus on mine optimization to reduce dilution and costs • Opportunity to leverage underutilized milling capacity as commodity prices improve Proven Execut
Slide 5: Financial Snapshot – Q1FY2017 Results
Financial Snapshot – Q1FY2017 Results Three Months Ended Three Months Ended June 30, 2016 June 30, 2015 (millions) (millions) Revenue US$35.3 US$32.2 Gross Profit US$15.7 US$11.5 Net Income US$6.5 US$3.8 Cash Flow from Operations US$20.2 US$13.3 Cash, cash equivalents and short-term investments: US$
Slide 6: Fiscal 2017 Q1 Results
Fiscal 2017 Q1 Results Low cost producer of silver - cash cost of $0.08** per Ag ounce for Q1 FY2017 Q1 FY2017 Sales Mix by Metal 50% Gross Profit Margins* 45% 45% 45% Zinc, Other, 40% 36% 8.4% 0.3% 34% 35% 29% 30% Lead, 24% 23% 25% 29.7% Silver, 59.1% 20% 15% 15% 10% Gold, 2.5% 5% 0% * Quarter en
Slide 7: Low Valuation Matrix Relative to Peers
Low Valuation Matrix Relative to Peers EV/EBITDA 14.0 12.0 P/NAV 10.0 3.0 8.0 6.0 2.5 4.0 2.0 2.0 0.0 SVM SVM FVI CDE PAAS EDR FR 2016E 2017E 1.5 P/CF 1.0 16.0 0.5 12.0 0.0 8.0 CDE SVM SVM FVI PAA EDR FR 4.0 Source: Raymond James Report May 30, 2016. 0.0 CDE SVM SVM FVI PAAS EDR FR 2016E 2017E 6 6
Slide 8: Ying Mining District: Silvercorp's Flagship Asset
Ying Mining District: Silvercorp’s Flagship Asset • Flagship Ying District consists of underground mines including SGX, TLP, LM, and HPG mines • Over 70km2 land package • Extensive underground drilling has maintained mine life at ~10 years • Has mined over 46.6 million Oz silver since 2006 • Two cen
Slide 9: Ying Mining District: Focus on Cost Control
Ying Mining District: Focus on Cost Control • As a result of the lower commodity price environment Silvercorp’s primary focus is on reducing costs • Key areas include: (i) dilution control; and, (ii) labor force reduction • Management has implemented stringent dilution control measures Drawing Red L
Slide 10: Dilution Controls at the Ying Mines
Dilution Controls at the Ying Mines Stopes where mining procedures are strictly followed yield better CM102-S16W-534-N7 stope - mine tech CM105-S2#-S6-340-S1 stope: mine tech grades. is checking angle of blast holes is checking angle of blast holes Silver grades of ore milled in Q1 FY2017 increased
Slide 11: Improving Head Grades
IMPROVING HEAD GRADES 200,000 400 Silver Head Grades and Ore Production Monthly Data at Ying Mining District Tonnes Grades (Jan 2012 to Jun 2016) 180,000 350 160,000 300 Silver Grade Gram/tonne 140,000 250 120,000 Tonnes of Ore 100,000 200 80,000 150 60,000 100 40,000 50 20,000 0 0 1010
Slide 12: Ying Mining District: Cost Control Efforts are Working
Ying Mining District: Cost Control Efforts are Working • Cost cutting efforts have succeeded at reducing head counts and lowering general and administration costs at Ying. • An employee incentive No. 2 – 2,200 tpd Mill compensation plan is encouraging more efficient production • General and administ
Slide 13: Exploration Program at the Ying Mining District
Exploration Program at the Ying Mining District Increasing Underground Definition Drilling is Improving Grade Control, and Lowering Exploration Drilling Capital Expenditures 2015 Resource Expansion At SGX (See press release of Nov. 16, 2015): • 25,623m of diamond drilling in 97 holes thru Sept. 2015
Slide 14: New 43-101 Report Expected at Ying Mining District
New 43-101 Report Expected at Ying Mining District 225,000m of drilling and 128,000m of tunnelling between 2013 - 2016 • Expansion and definition of previous known Mineral Resource blocks. • New mineralization defined downdip and along strike within known vein structures. • New mineralized parallel
Slide 15: Reserve & Resource Growth
Reserve & Resource Growth Updated Ying District NI43-101 180 Reserves & Resources: FY2010 - FY2014 expected - fall 2016. 160 154.1 M&I 142.8 Ounces of Silver and Silver Eq.* (Millions)1,2 140 P&P Reserves 117.9 120 98.5 102.4 98.2 100 80 64.2 58.7 60 40 20 - 2010 2011 2012 2014 1 Excludes Lead and Z
Slide 16: GC Mine: Commercial Mining Underway
GC Mine: Commercial Mining Underway Shaft Mill Plant Concentrate Thickener 110KV Power Substation Dewatering Plant Concentrate Warehouse 15 15
Slide 17: GC Mine in Guangdong – Our Newest Mine
GC Mine in Guangdong – Our Newest Mine • Underground silver/zinc mine • Excellent infrastructure and access • Construction completed and permits obtained • Commercial production underway • Producing zinc-silver, lead-silver, and pyrite concentrates • Produced 0.15 million Oz Ag and 5.27 million lbs.
Slide 18: GC Mine: Commercial Production is Underway
GC Mine: Commercial Production is Underway • Sold 149,000 Oz Ag and 5.3 million lbs. Pb/Zn during Q1 FY2017. • Contributed $4.6 million in revenue. • Ongoing efforts being made to lower production costs and fine tune milling and mining operations. Flotation Mill Testing • FY2017 capital ex budget of
Slide 19: BYP Gold Mine – a non-core asset
BYP Gold Mine – a non-core asset Status: • To avoid capital upgrades needed to sustain operations, in August 2014, the company suspended mining operations. • Company is evaluating various strategic and operational options for the property. • Viewed as a non-core asset and accordingly may sell at the
Slide 20: FY2017 Production Guidance
FY2017 Production Guidance Project Ying Mining District GC Mine Grand Total Ore processed (tonnes) 610,000 250,000 860,000 Head Grades Silver (gram per tonne) 260 109 Lead (%) 4.1 1.3 Zinc (%) 0.8 3.0 Metal Production Silver ('000 ounces) 4.6 0.5 5.1 Lead (million pounds) 50.7 6.3 57.0 Zinc (million
Slide 21: Silver Production – Over 45 Million Ounces to Date
Silver Production – Over 45 Million Ounces to Date 6.0 Ag Production – Actual and Forecast1,2 5.1 5.0 5.1E M 5.0 GC i 0.5 0.6 0.5 l Ying Mining District l i 4.0 o n s 3.0 o 5.8 5.5 f 5.2 4.7 4.6 4.4 4.6 O 4.3 2.0 4.1 3.9 u n c e 1.0 1.9 s - FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2
Slide 22: FY2017 Capital Expenditure Guidance
FY2017 Capital Expenditure Guidance Facilities/ Mine Development* Land Usage/ Drilling/Tunnelling Total Equipment** Exploration*** $million Mines/ Projects Cost Work Cost Cost Drilling ($million) (meters) ($million) ($million) (meters) Ying Mining District 2.1 6,743 13.5 14.6 48,375 30.2 GC Mine 0.5
Slide 23: Recent Achievements
Recent Achievements • Focus on improved monitoring resulting in continuous operating improvements • Strengthened management with new mine managers and the return of Silvercorp’s founder, Rui Feng as CEO • Addressed and improved relationships with contractors • Mining costs are under control • Head g
Slide 24: Investment Highlights
Investment Highlights • Strong Financial Position - $73.4 million cash on hand. No LT. debt • Low cost silver producer in a mining friendly jurisdiction • Long life silver asset with a track record of resource growth • Generated $20.2 million in cash flow from operations in Q1 FY2017 despite lower s
Slide 25: Appendices
Appendices 24 24
Slide 26: Appendix I: Ownership and Coverage
Appendix I: Ownership and Coverage Top 10 Institutional Investors – Analyst Coverage % O/S Firms and Funds 1 Van Eck Associates Corporation 10.34 Chris Thompson Raymond James 2 Global X Management Company 1.38 LLC 3 AMG Fondsverwaltung AG 0.90 4 Norges Bank Investment 0.79 Management (NBIM) 5 Renais
Slide 27: Appendix II: Management & Board
Appendix II: Management & Board Management Board of Directors Rui Feng, Ph.D., Geology Rui Feng Malcolm Swallow Chairman and CEO, Director Yikang Liu Paul Simpson Derek Liu, CGA, CPA Chief Financial Officer David Kong Luke Liu, M. Eng. PhD (Mining Eng.) Vice President China Operations Lorne Waldman,
Slide 28: Appendix III: Summary of Silver Reserves
Appendix III: Summary of Silver Reserves1,2,3,4 Tonnes Head Grades Contained Metal Reserves Reserve Project (Million) Category Ag (g/t) Pb (%) Zn (%) Ag (Moz) Pb (t) Zn (t) Proven 5.24 207 3.56 1.34 34.81 186,700 70,200 Ying Mining District Probable 7.40 200 2.62 0.77 47.71 193,700 57,000 Proven 0.4
Slide 29: Appendix IV: Summary of Silver Resources
Appendix IV: Summary of Silver Resources1,2,3,4 Tonnes Contained Metal Resources Reserve Head Grades Project (Million) (Inclusive of Reserves) Category Ag (g/t) Pb (%) Zn (%) Ag (Moz) Pb (t) Zn (t) Measured 5.56 253 4.53 1.67 45.81 253,400 94,600 Ying Mining Indicated 8.45 226 3.05 0.92 61.49 258,80
Slide 30: Appendix V: BYP Mine Resource
Appendix V: BYP Mine Resource Mineral Resources for Gold Zones as of December 31, 2011: Contained Metal Cut-off Resource Grades CLASS Resources Grades (g/t) (tonne) Au (g/t) Au (oz) Indicated 1.0 3,510,000 2.59 292,000 Inferred 1.0 2,470,000 1.84 146,000 Mineral Resources for Lead and Zinc Zones as
Slide 31: Key Growth Catalysts
Key Growth Catalysts Ying Mining District : • More efficient and lower cost mining • Reduced management overhead and greater incentives • Longer term opportunity to increase mining capacity to match milling capacity GC Project: • Commercial production underway • Fine tuning operations to improve
Slide 32: Endnotes and Cautionary Statements
Endnotes and Cautionary Statements Luke Liu, M. Eng. PhD Vice President China Operations is the 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
Slide 33: Contact Information
Contact Information Head Office Suite #1378 - 200 Granville St., Vancouver, BC, Canada V6C 1S4 Tel: 604-669-9397 | Fax: 604-669-9387 | Toll-Free: 1-888-224-1881 Email: investor@silvercorp.ca Website: www.silvercorp.ca Silvercorp’s disclosure documents are available from the System for Electronic Doc