Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (June 2024)
42 slides from Silvercorp Metals's investor presentation, Jun 3, 2024
Slide 1: Profitable Silver Producer Positioned to Grow
NYSE-A | TSX: SVM Profitable Silver Producer Positioned to Grow Corporate Presentation June 2024
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 lbs of $689M (June 3, 2024) lead + zinc • Profit received from mines: >$520M • Dividends to shareholders & share buybacks: >$200M Cash • MSCI E
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 in progress to expand production 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: 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 8: Adventus Acquisition: El Domo Cu-Au Project Ready to Be Built
ADVENTUS ACQUISITION TSX: SVM | NYSE AMERICAN SVM A. El Domo Cu-Au project in Ecuador ready to be Built (2021 Feasibility Study Highlight) a) Investment Protection Agreement signed with Open Pit Mine Life (years) 10 Ecuador Government (kt Cu) 11 b) Community Agreement (koz Au) 26 signed Average Annu
Slide 9: El Domo – Revenue by Metal vs. Feed Head Grade
ADVENTUS ACQUISITION TSX: SVM | NYSE AMERICAN SVM El Domo – Revenue by Metal vs. Feed Head Grade 2021 Feasibility Study for Open Pit Operation 2022 PEA for Underground Development Plan 9 Prices: $3.50/lb Cu, $1.20/lb Zn, $1,700/oz Au, $23/oz Ag, $0.95/lb Pb
Slide 10: Adventus Acquisition: El Domo Underground and Condor Gold Project
ADVENTUS ACQUISITION TSX: SVM | NYSE AMERICAN SVM B. El Domo Underground Resource supports mine life expansion to 14 years C. 98.7% interest in Condor Gold project to provide further growth 2021 PEA for Condor North: ➢ Gold & silver resources: Indicated: 2.3 Moz Au & 12.8 Moz Ag, plus Inferred: 4.3
Slide 11: Adventus Acquisition – Accretive to Metal Reserves & Resources
ADVENTUS ACQUISITION – ACCRETIVE TO METAL RESERVES & RESOURCES TSX: SVM | NYSE AMERICAN SVM Accretive transaction results in +118% precious metals & +85% base metals in M&I resources TOTAL AG EQ. M&I RESOURCES (AG & AU)(1,2) – 100% BASIS TOTAL CU EQ. M&I RESOURCES (CU, PB & ZN) (1,2) – 100% BASIS 47
Slide 12: Adventus Acquisition – Accretive to Net Asset Value
ADVENTUS ACQUISITION – ACCRETIVE TO NET ASSET VALUE TSX: SVM | NYSE AMERICAN SVM El Domo provides significant near-term growth at an improved cost profile SILVERCORP STANDALONE REVENUE PROFILE (US$M)(1) SILVERCORP PRO FORMA REVENUE PROFILE (US$M)(1,3) Silver Revenue Lead Revenue Zinc Revenue Gold Re
Slide 13: Strong Corporate Culture of Responsible Mining
STRONG CORPORATE CULTURE OF RESPONSIBLE MINING TSX: SVM | NYSE AMERICAN SVM Highlights of Our Sustainable Practices for All Stakeholders ENVIRONMENT ✓ EMS ISO 14001 certification and investments in environmental protection ✓ Recycled 84.9% of the 4,719,415 m³ of water used in our processing plants l
Slide 14: We Construct Green Mines That Generate Sustainable Value
WE CONSTRUCT GREEN MINES THAT GENERATE SUSTAINABLE VALUE TSX: SVM | NYSE AMERICAN SVM TAILINGS DRY STACKING TAILINGS BACK FILL FACILITY GC MINE GC MINE Industry best practice Further waste reduction SGX MINE WASTE WATER TREATMENT SYSTEM 1M T/Y WASTE ROCK AGGREGATE PLANT YING MINES YING MINES Increas
Slide 15: Ownership & Coverage
OWNERSHIP & COVERAGE TSX: SVM | NYSE AMERICAN SVM Top 10 Investors % O/S Analyst Coverage 1 Van Eck Associates 4.93 2 Rui Feng 3.52 3 Tidal Investments 3.05 4 Connor Clark & Lunn 2.68 5 Renaissance Technologies 2.55 6 Global X Management 2.52 7 DZ Privatbank S.A. 1.58 8 Stabilitas GmbH 1.30 9 BlackR
Slide 16: Undervalued Relative to Peers
UNDERVALUED RELATIVE TO PEERS TSX: SVM | NYSE AMERICAN SVM EV / EBITDA P / Adj E P / OCF TTM TTM TTM 5.4x VS. 52.2x 17.2x VS. 126.0x 7.5x VS. 48.2x Peer Avg. Peer Avg. Peer Avg. Silvercorp Silvercorp Silvercorp Fortuna 5.9x SilverCrest 10.9x Fortuna 6.2x Silvercorp 5.4x Silvercorp 17.2x Silvercorp 7
Slide 17: Focus on Generating Free Cash Flow
FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Profit (Green Line Below) on every tonne of ore mined Silver Price (US$ per ounce) Per Tonne Value (US$) Calendar Year *Realized silver price is calculated using the Shanghai Metal Exchange price, less smelter deduction and Value Added
Slide 18: Margins Outperform Industry Averages
MARGINS OUTPERFORM INDUSTRY AVERAGES TSX: SVM | NYSE AMERICAN SVM EBITDA Margin Return on Equity TTM TTM 43% 7.9% Silvercorp Silvercorp VS. VS. 20% 16% 40% -0.6% Vanguard Peer Avg. GDX Peer Avg. Industrials ETF 75 40 60 30 42.7% 45 20 7.9% 30 10 15 0 0 -10 2010 2012 2014 2016 2018 2020 2022 2024 201
Slide 19: Focus on Generating Free Cash Flow
FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Adjusted Net Income (US$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 20: 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 21: 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 22: Growing Low Cost Production
GROWING LOW COST PRODUCTION TSX: SVM | NYSE AMERICAN SVM 1 2 Consolidated Production Silver Price AISC 8 3 Silver 6.5 6.4 6.3 6.6 7.0 6.3 6.1 6.2 Ag Ounces (M) 6.0 6 5.6 5.3 5.1 5.0 5.0 4.6 4.0 4.2 3.9 4 1.9 $15.95 2 $11.33 $10.20 $11.38 $8.77 $9.73 $6.86 $7.49 $3.82 $3.27 $3.52 - 2006 2008 2010 201
Slide 23: Appendices
APPENDICES TSX: SVM NYSE AMERICAN: SVM
Slide 24: TSX:SVM NYSE American:SVM
TSX:SVM $7 >1,100,000 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 >1,900,000 30-Day Avg Daily Volume $5 $4 $3 $2 FOLLOW US ON $1
Slide 25: Leadership: A Solid History of Value Creation
LEADERSHIP: A SOLID HISTORY OF VALUE CREATION TSX: SVM | NYSE AMERICAN SVM Management Board of Directors Rui Feng, Ph.D., Geology Rui Feng, Ph.D., Geology Chairman and CEO Derek Liu, MBA, CGA, CPA Yikang Liu, Former Dep. Gen. Sec. of the Chief Financial Officer China Mining Assoc.; over 40 years geo
Slide 26: FY2024 Production and Capital Expenditure
FY2024 PRODUCTION AND CAPITAL EXPENDITURE TSX: SVM | NYSE AMERICAN SVM Production Head grades Metal production Production cost 1 Ore processed Gold Silver Lead Zinc Gold Silver Lead Zinc Cash cost AISC (tonnes) (g/t) (g/t) (%) (%) (oz) (Koz) (Klbs) (Klbs) ($/t) ($/t) Fiscal 2024 Ying Mining District
Slide 27: FY2025 Production and Capital Expenditure Guidance
FY2025 PRODUCTION AND CAPITAL EXPENDITURE GUIDANCE TSX: SVM | NYSE AMERICAN SVM 1 Production Head Grade Metal Productions Production Costs Ore processed Gold Silver Lead Zinc Gold Silver Lead Zinc Cash Cost AISC Fiscal 2025 Guidance (tonne) (g/t) (g/t) (%) (%) (Koz) (Koz) (Klb) (Klb) ($/t) (S/t) Gol
Slide 28: 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 29: El Domo Overview: Mining Title and Interest
EL DOMO OVERVIEW: MINING TITLE AND INTEREST TSX: SVM | NYSE AMERICAN SVM 1. Medium scale mining concession title for 25 years granted for Las Naves Concession containing the El Domo Project 2. Located 20 km from Pan-American highway and 3-hour drive from Guayaquil 3. Surface rights acquired for appr
Slide 30: El Domo Overview: Resource and Reserve Statement
EL DOMO OVERVIEW: RESOURCE AND RESERVE STATEMENT TSX: SVM | NYSE AMERICAN SVM 30 Source: Adventus Mining Corp. filings
Slide 31: El Domo Overview: Site Layout
EL DOMO OVERVIEW: SITE LAYOUT TSX: SVM | NYSE AMERICAN SVM 31 Source: Adventus Mining Corp. filings
Slide 32: El Domo Overview: Development Timeline
EL DOMO OVERVIEW: DEVELOPMENT TIMELINE TSX: SVM | NYSE AMERICAN SVM 1. Construction decision expected in Q2 2024 2. Production expected by Q1 2026 3. 10 year open-pit strip ratio of 7:1, to be followed by 4 year underground 4. Tailings storage design sufficient to fit open pit & underground developm
Slide 33: Condor Project Overview
CONDOR PROJECT OVERVIEW TSX: SVM | NYSE AMERICAN SVM a) 55 km south of Tongling’s Mirador Cu-Au mine b) 33 km south of Lundin Gold’s Fruta del Norte c) >150,000 m of drilling, ~US$40M spent from 1993 to 2016 & US$43M after 2016 d) PEA released in 2021 e) Adventus ownership on the Condor varies betwe
Slide 34: Condor Project Overview
CONDOR PROJECT OVERVIEW TSX: SVM | NYSE AMERICAN SVM ASSET SNAPSHOT CONDOR NORTH - PEA 2021 Ownership ⚫ Concessions vary between 98.7% - 100% owned by Adventus Mine Life (years) 12 LOM Gold Grade (g/t) 0.72 ⚫ Located in the Province of Zamora Chinchipe, near the Ecuador – Peru border and the souther
Slide 35: Ying Mining District, Henan
YING MINING DISTRICT, HENAN TSX: SVM | NYSE AMERICAN SVM • Produced ~90 Moz of silver & ~1.2 Blbs of lead & zinc since 2006 Ying Mining District: 4 mining permits 68.59km² • 6 smelters within 200 km • SGX, TLP, LME, LMW, HPG, HZG and DCG underground mines have identified over 300 veins ² ¹ ¹ • >2.2
Slide 36: Revenue Percentage by Metal
REVENUE PERCENTAGE BY METAL TSX: SVM | NYSE AMERICAN SVM Base Metals: 36% Gold: 9% Silver: 55% Calendar Year 36
Slide 37: Realized Metal Price Examples
REALIZED METAL PRICE EXAMPLES TSX: SVM | NYSE AMERICAN SVM Silver Lead Zinc US$ Per Ounce US$ Per Pound US$ Per Pound *Net of value added tax Shanghai Metal Exchange quoted prices on May 30, 2024: Silver=8.348 RMB/gram, lead=18,600 RMB/tonne, Zinc=24,980 RMB/tonne, all including 13% VAT. Conversion
Slide 38: 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 39: 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 40: 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 41: 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 42: 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
Silvercorp Metals — Investor Presentation (June 2024) on 6ix