Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (March 2022)
42 slides from Silvercorp Metals's investor presentation, March 2022
Slide 1: Stable & Profitable Silver Producer Positioned to Grow
STABLE & PROFITABLE SILVER PRODUCER POSITIONED TO GROW Corporate Presentation March 2022 TSX: SVM 1 NYSE AMERICAN: SVM
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: Historical Production
STABLE & PROFITABLE SILVER PRODUCER POSITIONED TO GROW TSX: SVM | NYSE AMERICAN SVM Historical Production (April 2006 – December 2021) Ying Mining District, Henan Province (SGX, HPG, HZG, TLP, LME, LMW and DCG mines) • Silver: 81 Moz. • Lead + Zinc: 1.1 Blbs. • Profit Distribution: US$498M • 15+ yea
Slide 4: Stable & Profitable Silver Producer Positioned to Grow
STABLE & PROFITABLE SILVER PRODUCER POSITIONED TO GROW TSX: SVM | NYSE AMERICAN SVM 1) Management focus on generating free cash flow from long life mines • US$498M profits distributed from our mines net of spending >$300 million on capital + sustaining capital expenditures • Cash position: US$212 mi
Slide 5: Management Focus on Generating Free Cash Flow
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Steady mine profits financed Capital Expenditures, Investments in Equities, Dividends, and Cash increase Market Capitalization = $670 M Avg. Analyst Mining Asset NAV = $640 M Cash = $212 M Market Value of Equity Investments =
Slide 6: Profit on Every Tonne of Ore Mined
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Profit (Green Line Below) on every tonne of ore mined Silver Price (US$ per ounce) Per Tonne Value (US$) Calendar Year • Realized silver price is calculated using the Shanghai Metal Exchange price, less smelter deduction and
Slide 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: Management Focus on Generating Free Cash Flow
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Fiscal Year * Mid-Point of guidance used ** Expected 2023 Ying production includes silver equivalent from gold production at a ratio of 65 to 1 8
Slide 9: Lower Cost Higher Margin Compared to Peers
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Lower Cost Higher Margin Compared to Peers (1) (2) (3) (3) (3) (4) 1) Indicated in calendar quarters 2) Net of by-product credits 3) Changed reporting basis to AgEq 4) Only reflects silver segment • EBITDA Margin Data Source:
Slide 10: Providing Value for Investors
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Providing Value for Investors 140 85 151 • Stock prices as of February 17, 2022; LTM results are most recent reported. P/E, EV/EBITDA Data Source: Capital IQ 10
Slide 11: The Strategy of Organic Growth Through Extensive Drilling
ORGANIC GROWTH THROUGH EXTENSIVE DRILLING AND CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM The strategy of organic growth through extensive drilling 1) Drill above or 2) Drill for veins in 3) Drill the newly 4) Step-out drilling beneath stopes that the resource area at discovered gold from the resourc
Slide 12: Silvercorp's Extensive Drilling & Tunnelling for Growth
ORGANIC GROWTH THROUGH EXTENSIVE DRILLING AND CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM Silvercorp’s extensive drilling & tunnelling for growth 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
Slide 13: Making New Discoveries - Finding Gold Deposits in Silver Mines
ORGANIC GROWTH THROUGH EXTENSIVE DRILLING AND CONSOLIDATION 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: The breccia dyke (extending along a northwest trend for two
Slide 14: LMW Mine: Low Angle Veins of Au or Au-Cu Discovered
ORGANIC GROWTH THROUGH EXTENSIVE DRILLING AND CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM LMW Mine: Low angle Veins of Au or Au-Cu and Wide Ag-Pb-Cu Zone 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 Hole ZKX0
Slide 15: Extensive Drilling Grows Silver Reserves & Resources
ORGANIC GROWTH THROUGH EXTENSIVE DRILLING AND CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM Extensive Drilling & Tunnelling Grows Silver Reserves & Resources Net of Depletion (Remaining Mining Life >15 Years) Historical Production Silver: 81 Moz. Lead + Zinc: 1.1 Blbs. Calendar Year • See Appendix III,
Slide 16: Development System & 3D Models at Ying
ORGANIC GROWTH THROUGH EXTENSIVE DRILLING AND CONSOLIDATION 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 16
Slide 17: Kuanping (KP)
ORGANIC GROWTH THROUGH EXTENSIVE DRILLING AND CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM Kuanping (KP) • 12.39 km2 ~33 km north of Ying • Acquired for US$13.5M • Previous exploration defined six silver- lead-zinc vein structures and one gold- silver vein structure • Exploration rights are currently
Slide 18: Equity Investment & Incubating World Class Opportunities
EQUITY INVESTMENT & INCUBATING WORLD CLASS OPPORTUNITIES TSX: SVM | NYSE AMERICAN SVM 1) Invested a total of US$39 million between 2017 and 2020 in New Pacific Metals (TSX: NUAG, NYSE/AMEX: NEWP): 28.3% interest 2) Provided technical and management support, that quickly advanced the discovery into a
Slide 19: New Pacific Metals Silver Sand Project
EQUITY INVESTMENT & INCUBATING WORLD CLASS OPPORTUNITIES TSX: SVM | NYSE AMERICAN SVM New Pacific Metals Silver Sand Project: Open-Pittable and Heap Leachable 19
Slide 20: Ongoing Merger & Acquisition Effort to Create Value
ONGOING MERGER & ACQUISITION EFFORT 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 c
Slide 21: Catalysts
CATALYSTS TSX: SVM | NYSE AMERICAN SVM 1) Increased production expected for F2023 per guidance 2) Further 300,000+ metres of drilling planned for FY2023 to upgrade resources to extend mine life, and to make new discoveries 3) Apply for a mining permit for the newly-acquired Kuanping gold-silver proj
Slide 22: 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 23: 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) Tailings Back Fill Facility at GC Mine Tailings Storage Facility at Ying 1 M t/y waste rock aggregate plant 23 at Ying
Slide 24: Recycle Waste Water; Environment Management Certificates
LONG-TERM COMMITMENT TO RESPONSIBLE MINING & ESG TSX: SVM | NYSE AMERICAN SVM Recycle treated waste water to mills for milling Environment Management Certificates Waste water treatment system at SGX Mine 24 Tailings dry stacking at GC Mine to prevent waste water discharge
Slide 25: F2021 Sustainability Report
F2021 SUSTAINABILITY REPORT TSX: SVM | NYSE AMERICAN SVM Highlights of Our Responsible Performance & Accomplishments HEALTH & SAFETY ENVIRONMENT SOCIAL GOVERNANCE • Zero Covid-19 • Zero material • Zero grievances • Formed cases & epidemic incidents • USD$1.2M Sustainability control community • “Nati
Slide 26: Ownership & Coverage
OWNERSHIP & COVERAGE TSX: SVM | NYSE AMERICAN SVM Top 10 Institutional Investors % O/S Analyst Coverage 1 Van Eck Associates 10.56 Canada Ryan Thompson BMO Capital Markets 2 Renaissance Technologies 2.67 Akin Akinwale Eight Capital 3 ETF Managers Group 2.66 Justin Stevens PI Financial 4 Global X Man
Slide 27: Leadership: A Solid History of Value Creation
LEADERSHIP: A SOLID HISTORY OF VALUE CREATION TSX: SVM | NYSE AMERICAN SVM Management Board of Directors Rui Feng, Ph.D., Geology Rui Feng, Ph.D., Geology Chairman and CEO, Director Derek Liu, MBA, CGA, CPA David Kong, CA, CPA, Former Ernst & Chief Financial Officer Young LLP Partner; over 30 years
Slide 28: Fiscal 2023 Production Guidance
FISCAL 2023 PRODUCTION GUIDANCE TSX: SVM | NYSE AMERICAN SVM Ore Head grades Metal production Production costs processed Gold Silver Lead Zinc Gold Silver Lead Zinc Cash cost AISC (k/tonnes) (g/t) (g/t) (%) (%) (koz) (Moz) (Mlbs) (Mlbs) ($/t) ($/t) Fiscal 2023 Guidance Gold ore 30 - 43 3.9 60 0.5 -
Slide 29: Fiscal 2023 Capital Expenditure Guidance
FISCAL 2023 CAPITAL EXPENDITURE GUIDANCE TSX: SVM | NYSE AMERICAN SVM Capitalized Development Work and Expenditures Expensed Exploration and Equipment, Mining Ramp Development Capitalized Mill and Preparation Underground Development Tunnels Drilling TSF Total Tunnnels driling (Km) ($M) (Km) ($M) (Km
Slide 30: Head Office
HEAD OFFICE Suite #1750 1066 West Hastings St. Vancouver, BC, Canada V6E 3X1 Tel: 604-669-9397 Fax: 604-669-9387 Toll-Free: 1-888-224-1881 Investor@silvercorp.ca www.silvercorp.ca Watch The Most Recent Interview Silvercorp’s disclosure documents are available from the System for Electronic Document
Slide 31: Appendices
APPENDICES TSX: SVM 31 NYSE AMERICAN: SVM
Slide 32: Ying Mining District, Henan
YING MINING DISTRICT, HENAN TSX: SVM | NYSE AMERICAN SVM • SGX, TLP, LME, LMW, HPG, HZG and DCG underground mines have Ying Mining District: 4 mining permits 68.59km² identified 311 veins • 2 mills of 3,200 tpd capacity produce silver-lead and zinc concentrates ² • 6 smelters within 200 km ¹ • Produ
Slide 33: GC Mine
GC MINE TSX: SVM | NYSE AMERICAN SVM Updated MRE NI 43-101 March 2021; • P&P Reserves up 8% from the last Resource Estimate Report, despite 2 years mine production depletion • Measured and indicated resources up 11% and inferred resource up 17% • Projected LOM has the potential to go beyond 2034 GC
Slide 34: BYP Gold Mine
BYP GOLD MINE TSX: SVM | NYSE AMERICAN SVM Preparing for production: • 2019 NI 43-101 gold resource identified 421,000 oz M&I and 110,000 oz inferred • Lead-Zinc mine suspended August 2014 • Actively re-applying for a new mining permit with gold; approval is pending a provincial wide rezoning of env
Slide 35: Revenue Percentage by Metal
REVENUE PERCENTAGE BY METAL TSX: SVM | NYSE AMERICAN SVM 75% 73% 69% 63% 64% 65% 62% 62% 60% 58% 59% 61% 60% 58% 59% 56% 56% 56% 60% 56% 58% 59% 53% 53% 54% 55% 58% 50% 49% 51%52% 55% 50% 45% 46% 45% 35% 25% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 36: Realized Metal Price Examples
REALIZED METAL PRICE EXAMPLES TSX: SVM | NYSE AMERICAN SVM Silver Lead Zinc US$ 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 37: Lead & Zinc Production
LEAD & ZINC PRODUCTION > 1 Billion Pounds of Lead and Zinc Over 15 Years TSX: SVM | NYSE AMERICAN SVM 110 GC Mine 101 100 Ying Mining District 97 95 89 91 88 90 82 33 80 20 32 29 Million Pounds (Mlb) 70 25 29 67 20 70 60 14 21 50 85 87 40 77 66 66 66 69 66 68 61 63 62 65 30 53 46 49 20 33 10 0 F2007
Slide 38: Growing Reserves & Resources - Lead & Zinc
GROWING RESERVES & RESOURCES - LEAD & ZINC FY2005 – FY20211 (After > 1 Blbs Lead & Zinc Produced) 2 TSX: SVM | NYSE AMERICAN SVM Fiscal Year 1. Measured & Indicated Resources inclusive of Reserves. See Appendix III, IV and V for breakout of Measured, Indicated and Inferred, Proven and Probable categ
Slide 39: Summary of Reserves
SUMMARY OF RESERVES1 TSX: SVM | NYSE AMERICAN SVM Average Grades Contained Metal Reserves Reserve Tonnes Project Category (Million) Silver Gold Lead Zinc Silver Silver Eq². Lead Zinc (g/t) (g/t) (%) (%) (Moz) (Moz) (t) (t) Proven 5.29 276 0.09 4.33 1.59 46.99 1.04 228,900 84,000 Ying Mining District
Slide 40: Summary of Resources
SUMMARY OF RESOURCES1 TSX: SVM | NYSE AMERICAN SVM Contained Metal Resources (Inclusive of Average Grades Resource Tonnes Reserves) Project Category (Million) Silver Gold Lead Zinc Silver Silver Eq.² Lead Zinc (g/t) (g/t) (%) (%) (Moz) (Moz) (t) (t) Measured 8.41 264 0.12 4.28 1.53 71.29 2.16 360,20
Slide 41: Summary of Resources: BYP Mine
SUMMARY OF RESOURCES: BYP MINE TSX: SVM | NYSE AMERICAN SVM Au Pb Zn Au Pb Zn Quantity Domain Categories Grade Grade Grade Metal Metal Metal Mt g/t % % koz kt kt Measured 2.8 3 - - 269 - - Indicated 1.5 3.1 - - 152 - - Gold area Measured & 4.3 3.1 - - 421 - - Indicated Inferred 1.3 2.5 - - 110 - - L
Slide 42: 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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