Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (May 2024)
36 slides from Silvercorp Metals's investor presentation, May 2024
Slide 1: Profitable Silver Producer Positioned to Grow
PROFITABLE SILVER PRODUCER POSITIONED TO GROW Corporate Presentation TSX: SVM | NYSE AMERICAN: SVM May 2024 1
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS TSX: SVM | NYSE AMERICAN SVM Cautionary Note Regarding Forward-Looking Information and Forward-Looking Statements This presentation news release includes “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “f
Slide 3: Profitable Silver Producer Ready for Growth & Expansion
PROFITABLE SILVER PRODUCER READY FOR GROWTH & EXPANSION TSX: SVM | NYSE AMERICAN SVM History Market Cap Analysis • Total production: ~100 Moz silver + 1.3 B $559M lbs of lead + zinc (April 30, 2024) • Dividends received from mines: >$520M • Dividends to shareholders & share buybacks: >$200M Current
Slide 4: Growth Strategy
GROWTH STRATEGY TSX: SVM | NYSE AMERICAN SVM 1. Organic growth from existing operations • Extensive drilling and tunnelling exploration to expand resources • Mine optimization and development to expand production in progress 2. Incubation of junior exploration companies for growth • 27.4% interest i
Slide 5: Our Current Operations in China
OUR CURRENT OPERATIONS IN CHINA TSX: SVM | NYSE AMERICAN SVM China Advantages: • Close to customers (smelters) and suppliers • Stable regulations Ying Mining District, Henan Province (SGX, HPG, HZG, TLP, LME, LMW and DCG mines) • Free profit distribution • Home for 80% of global solar panel manufact
Slide 6: Ying District – Growth Through Drilling, Optimization, Expansion & Consolidation
YING DISTRICT – GROWTH THROUGH DRILLING, OPTIMIZATION, EXPANSION, & CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM Drilled ~1,300,000 m since 2020 • 255,000 m budgeted in FY2025 • Focused on definition and discovery Mine optimization for Growth ($48M) • Transition to more mechanized mining: • Increase s
Slide 7: Adventus Acquisition
ADVENTUS ACQUISITION TSX: SVM | NYSE AMERICAN SVM Strategic Rationale for Silvercorp 1. Transaction is accretive on a net asset value per share and on Mineral Reserves & Mineral Resources basis 2. The high margin, build-ready El Domo copper-gold project provides significant growth for Silvercorp: a)
Slide 8: Incubating World Class Opportunities – 27.4% New Pacific Metals Investment
INCUBATING WORLD CLASS OPPORTUNITIES – 27.4% NEW PACIFIC METALS INVESTMENT TSX: SVM | NYSE AMERICAN SVM Silver Sand Project Carangas Project Silverstrike Project A large silver deposit to be A new globally significant 200 m thick, near surface mined by open pit and Ag-Au polymetallic discovery oxidi
Slide 9: Catalysts
CATALYSTS TSX: SVM | NYSE AMERICAN SVM 1 Increased metals production in FY2025 Updated Ying NI 43-101 report including enhanced mine mechanization 2 and mill expansion (mid 2024) Additional drilling to upgrade resources to reserves and make new 3 discoveries 4 Obtain BYP gold mining permit and deter
Slide 10: Focus on Generating Free Cash Flow
FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Profit (Green Line Below) on every tonne of ore mined Silver Price (US$ per ounce) Per Tonne Value (US$) Calendar Year *Realized silver price is calculated using the Shanghai Metal Exchange price, less smelter deduction and Value Added
Slide 11: Focus on Generating Free Cash Flow
FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Adjusted Net Income (US$M) Free Cash Flow (US$M) Calendar Year Calendar Year Note: Adjusted net income = adjusted for one-time non-cash items, FX gain(loss), Note: Free cash flow = operating cash flow less capital expenditures, less cap
Slide 12: Margins Outperform Industry Averages
MARGINS OUTPERFORM INDUSTRY AVERAGES TSX: SVM | NYSE AMERICAN SVM EBITDA Margin Return on Equity TTM TTM 43% 8.1% Silvercorp Silvercorp VS. VS. 19% 15% 39% -0.5% Vanguard Peer Avg. GDX Peer Avg. Industrials ETF 75 40 60 30 43.1% 45 20 8.1% 30 10 15 0 0 -10 2010 2012 2014 2016 2018 2020 2022 2010 201
Slide 13: Extensive Exploration for Organic Growth
EXTENSIVE EXPLORATION FOR ORGANIC GROWTH TSX: SVM | NYSE AMERICAN SVM Silvercorp’s extensive drilling & tunnelling Ying: 2,425 km of drilling and 798 km of tunnelling since 2004 GC: 467 km of drilling and 111 km of tunnelling since 2004 Kilometer Calendar Year Benefits of drilling 1) Made new discov
Slide 14: Building Metals Inventory
BUILDING METALS INVENTORY TSX: SVM | NYSE AMERICAN SVM P&P Reserves M&I Resources (not in P&P) Inferred Resources Silver1 Million Ounces 152 155 126 121 108 115 102 102 102 141 86 86 121 120 96 97 95 119 65 62 75 50 50 57 57 57 77 34 63 57 115 114 115 115 102 99 99 103 103 103 108 109 25 81 64 59 40
Slide 15: Growing Low Cost Production
GROWING LOW COST PRODUCTION TSX: SVM | NYSE AMERICAN SVM 1 2 Consolidated Production Silver Price AISC 8 Silver 3 Ag Ounces (M) 7.0 6.5 6.4 6.3 6.6 6.0 6.3 6.1 6.2 6 5.3 5.6 5.0 5.1 5.0 4.6 4.0 4.2 3.9 4 1.9 $15.95 2 $11.33 $10.20 $8.77 $9.73 $6.86 $7.49 $3.82 $3.27 $3.52 - 120 Lead & Zinc 3 96 95 1
Slide 16: Undervalued Relative to Peers
UNDERVALUED RELATIVE TO PEERS TSX: SVM | NYSE AMERICAN SVM EV / EBITDA P / Adj E P / OCF TTM TTM TTM 4.0x VS. 31.2x 14.0x VS. 107.2x 6.5x VS. 30.0x Peer Avg. Peer Avg. Peer Avg. Silvercorp Silvercorp Silvercorp Silvercorp 4.0x SilverCrest 10.4x Fortuna 4.7x Fortuna 4.9x Silvercorp 14.0x Silvercorp 6
Slide 17: Adventus Transaction Details
ADVENTUS TRANSACTION DETAILS TSX: SVM | NYSE AMERICAN SVM Transaction ✓ Silvercorp to acquire all outstanding common shares of Adventus by Plan of Arrangement ✓ Adventus shareholders to receive 0.1015 of a Silvercorp share for each Adventus share; implies C$0.50 per Adventus share based on Silvercor
Slide 18: Ecuador Overview
ECUADOR OVERVIEW TSX: SVM | NYSE AMERICAN SVM Mining’s Role in Ecuadorian Economy MINING PROJECTS IN ECUADOR ✓ Ecuador shares excellent mineral resources with its neighboring countries Peru, Columbia and Chile, and is only beginning to establish its own modern mining sector COLOMBIA ◼ Under-explored
Slide 19: El Domo Project Overview
EL DOMO PROJECT OVERVIEW TSX: SVM | NYSE AMERICAN SVM ASSET SNAPSHOT 2021 FEASIBILITY STUDY HIGHLIGHTS Description ⚫ Open pit copper project(1) Mine Life (open pit) (years) 10 ⚫ 75% owned by Adventus(2) (kt Cu) 11 Ownership ⚫ 25% owned by Salazar Resources (TSX-V: SRL) (“Salazar”) (koz Au) 26 ⚫ ~150
Slide 20: Silvercorp Well Positioned to Develop El Domo
SILVERCORP WELL POSITIONED TO DEVELOP EL DOMO TSX: SVM | NYSE AMERICAN SVM SILVERCORP FINANCING ABILITY SNAPSHOT (US$M) $361 Remaining Wheaton Precious Metals Stream Deposit $162 $248 Silvercorp’s Current Cash Balance(1) $248 $198 Pro Forma Silvercorp Funding Ability El Domo Initial Capex (2021 Feas
Slide 21: Condor Project Overview
CONDOR PROJECT OVERVIEW TSX: SVM | NYSE AMERICAN SVM ASSET SNAPSHOT CONDOR NORTH - PEA 2021 Ownership ⚫ Concessions vary between 98.7% - 100% owned by Adventus Mine Life (years) 12 LOM Gold Grade (g/t) 0.72 ⚫ Located in the Province of Zamora Chinchipe, near the Ecuador – Peru border and the souther
Slide 22: Ownership & Coverage
OWNERSHIP & COVERAGE TSX: SVM | NYSE AMERICAN SVM Top 10 Investors % O/S Analyst Coverage 1 Van Eck Associates 4.93 2 Rui Feng 3.52 3 Tidal Investments 2.87 4 Renaissance Technologies 2.85 5 Connor Clark & Lunn 2.66 6 Global X Management 2.52 7 Stabilitas GmbH 1.30 8 DZ Privatbank S.A. 1.30 9 BlackR
Slide 23: Strong Corporate Culture of Responsible Mining
STRONG CORPORATE CULTURE OF RESPONSIBLE MINING TSX: SVM | NYSE AMERICAN SVM Highlights of Our Sustainable Practices for All Stakeholders ENVIRONMENT ✓ EMS ISO 14001 certification and investments in environmental protection ✓ Recycled 84.9% of the 4,719,415 m³ of water used in our processing plants l
Slide 24: We Construct Green Mines That Generate Sustainable Value
WE CONSTRUCT GREEN MINES THAT GENERATE SUSTAINABLE VALUE TSX: SVM | NYSE AMERICAN SVM TAILINGS DRY STACKING TAILINGS BACK FILL FACILITY GC MINE GC MINE Industry best practice Further waste reduction SGX MINE WASTE WATER TREATMENT SYSTEM 1M T/Y WASTE ROCK AGGREGATE PLANT YING MINES YING MINES Increas
Slide 25: TSX:SVM NYSE American:SVM
TSX:SVM >1,000,000 $7 HEAD OFFICE 30-Day Avg Daily Volume Suite 1750–1066 West Tel: 604-669-9397 Hastings St. Vancouver, BC Investor@silvercorp.ca NYSE American:SVM $6 Canada V6E 3X1 www.silvercorpmetals.com >2,600,000 30-Day Avg Daily Volume $5 $4 $3 $2 FOLLOW US ON $1
Slide 26: Appendices
APPENDICES TSX: SVM NYSE AMERICAN: SVM
Slide 27: Leadership: A Solid History of Value Creation
LEADERSHIP: A SOLID HISTORY OF VALUE CREATION TSX: SVM | NYSE AMERICAN SVM Management Board of Directors Rui Feng, Ph.D., Geology Rui Feng, Ph.D., Geology Chairman and CEO Derek Liu, MBA, CGA, CPA Yikang Liu, Former Dep. Gen. Sec. of the Chief Financial Officer China Mining Assoc.; over 40 years geo
Slide 28: FY2025 Production and Capital Expenditure Guidance versus FY2024 Actual
FY2025 PRODUCTION AND CAPITAL EXPENDITURE GUIDANCE VERSUS FY2024 ACTUAL TSX: SVM | NYSE AMERICAN SVM Production Head Grade Metal Productions Production Costs1 Ore processed Gold Silver Lead Zinc Gold Silver Lead Zinc Cash Cost AISC Fiscal 2025 Guidance (tonne) (g/t) (g/t) (%) (%) (Koz) (Koz) (Klb) (
Slide 29: Ying Mining District, Henan
YING MINING DISTRICT, HENAN TSX: SVM | NYSE AMERICAN SVM • Produced ~90 Moz of silver & ~1.2 Blbs of lead & zinc since 2006 Ying Mining District: 4 mining permits 68.59km² • 6 smelters within 200 km • SGX, TLP, LME, LMW, HPG, HZG and DCG underground mines have identified over 300 veins ² ¹ ¹ • >2.2
Slide 30: Revenue Percentage by Metal
REVENUE PERCENTAGE BY METAL TSX: SVM | NYSE AMERICAN SVM Base Metals: 37% Gold: 4% Silver: 59% Calendar Year 30
Slide 31: Realized Metal Price Examples
REALIZED METAL PRICE EXAMPLES TSX: SVM | NYSE AMERICAN SVM Silver Lead Zinc US$ Per Ounce US$ Per Pound US$ Per Pound *Net of value added tax Shanghai Metal Exchange quoted prices on April 17, 2024: Silver=6.588 RMB/gram, lead=16,935 RMB/tonne, Zinc=22,665 RMB/tonne, all including 13% VAT. Conversio
Slide 32: GC Mine
GC MINE TSX: SVM | NYSE AMERICAN SVM GC Underground Mine • 330,000 tonne ore per year to produce silver-lead, zinc, and minor tin concentrates since 2014 • XRT ore sorting system in commercial production • Tailings are de-watered, then back- filled underground or dry-stacked Updated MRE NI 43-101 (M
Slide 33: 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 See Appendix pages 35 and 36 for notes and a detailed breakdown of BYP’s
Slide 34: 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 35: 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 36: Cautionary Statements
CAUTIONARY STATEMENTS TSX: SVM | NYSE AMERICAN SVM Qualified Persons (Silvercorp) The scientific and technical information related to Silvercorp’s projects contained herein has been reviewed and approved by Guoliang Ma, P. Geo., who is a Qualified Person (“QP”) within the meaning of National Instrum