Sunshine Silver Mining & Refining Company · NYSE:SSMR
Sunshine Silver Mining & Refining — BMO Global Metals & Mining Conference 2018
44 slides from Sunshine Silver Mining & Refining's conference presentation, February 2018
Slide 1: Sunshine Silver Mining & Refining
Sunshine Silver Mining & Refining The Next North American Silver Major… BMO Global Metals & Mining Conference Presentation -February 2018-
Slide 2: Building a World Class Silver Mining Company
Building a World Class Silver Mining Company: Two High Grade, Development Assets in Premier Silver Regions Los Gatos Sunshine Mine Chihuahua, Mexico Idaho, USA A Company-Maker Redevelopment of a World-Class Deposit • New greenfield district-scale silver, gold, zinc and lead • Largest and highest gra
Slide 3: Corporate Structure
Sunshine Silver Mining & Refining: Corporate Structure Management & Private Investors Directors 5% Tocqueville Asset 2% Management 3% Municipal Employees Retirement System of Michigan 18% Electrum & Affiliates 72% Shares Outstanding: 73.9 million Warrants: 0.0 million Options & DSUs: 5.8 million Ful
Slide 4: Proven Management
Sunshine Silver Mining & Refining: Proven Management President and CEO, Ventana Gold Corp (through to sale of company) Stephen Orr CEO, OceanaGold Limited; Executive Chairman & CEO Managing Director Australia & Africa Operations, Barrick Gold Corporation; 39 years experience President, Homestake Can
Slide 5: Experienced Board of Directors
Sunshine Silver Mining & Refining: Experienced Board of Directors Stephen Orr CEO of Sunshine Silver Mining & Refining Corporation Executive Chairman & CEO Retired Chairman and CEO of Anglogold North American Inc., Independence Mining Company, John Ellis Hudson Bay Mining and Smelting Corp. Formerly
Slide 6: A Proven Track Record of Creating Value
Sunshine Silver Mining & Refining: A Proven Track Record of Creating Value Through smart strategic acquisitions and exploration success, multiple milestones achieved over 11 years Ø Merger of Los Gatos into Sunshine SSMRC Corporate Sunshine Mine & Silver Mines Ø Liberty Mining & Metals acquires 15%
Slide 7: Los Gatos Silver-Zinc-Lead Project
Los Gatos Silver-Zinc-Lead Project: A New High Grade Epithermal District in Mexico’s Silver Belt 7
Slide 8: Located ~150km South of Chihuahua City, Mexico
Los Gatos Silver-Zinc-Lead Project: Located ~150km South of Chihuahua City, Mexico 8
Slide 9: New Epithermal Precious Metals District
Los Gatos Silver-Zinc-Lead Project: New Epithermal Precious Metals District • ~103,000 hectares of mineral rights in 17 contiguous concessions • No historical workings or previous exploration • Exploration began in 2006, blind discovery of Cerro Los Gatos & Esther zones in March 2009 • ~5500 hectare
Slide 10: Dowa Metals & Mining Co.
Los Gatos Silver-Zinc-Lead Project: Dowa Metals & Mining Co. • Founded in 1884, Dowa has been developing mineral resources in order to secure stable, long- term sources of raw materials for its Akita Zinc / Kosaka Smelting & Refining complex and its Onahama Smelting & Refining complex, both in Japan
Slide 11: Dowa Metals & Mining Joint Venture
Los Gatos Silver-Zinc-Lead Project: Dowa Metals & Mining Joint Venture • In December 2014 Dowa Metals & Mining Co., Ltd. (Dowa) agreed to purchase 30% of the Los Gatos Project, forming the Los Gatos Joint Venture, by paying US$50 million over two years • The Los Gatos Joint Venture agreement guarant
Slide 12: Cerro Los Gatos Zone Resource Growth
Los Gatos Silver-Zinc-Lead Project: Cerro Los Gatos Zone Resource Growth Silver (OzsMillions) Zinc (Lbs Millions) Aug-14 4 25 23 Aug-14 66 402 674 M&I Resource Increased +196% M&I Resource Increased +151% & Total Resource Increased+90% & Total Resource Increased +31% Dec-16 35 51 13 Dec-16 407 767 3
Slide 13: Cerro Los Gatos Zone Resources and Reserves
Los Gatos Silver-Zinc-Lead Project: Cerro Los Gatos Zone 500 metres Looking Southwest Ore Grade Contained Metal Tonnes Ag Au Cu Pb Zn Ag Eq Ag Au Cu Pb Zn Ag Eq (Mt) (g/t) (g/t) (%) (%) (%) (Moz) (koz) (Mlbs) (Mlbs) (Mlbs) (Moz) 2P Reserves 9.81 247 0.30 0.10 % 2.28 % 4.75 % 604 7 8 .0 94.6 2 1 .6 4
Slide 14: Over 2.1 Kilometers of Development Completed
Los Gatos Silver-Zinc-Lead Project: Over 2.1 Kilometers of Development Completed NW Zone Decline 4.2 m 48 LEVEL 1370 Advance in the NW OW-15-02 Zone Central Zone Location of Trial Mining OW-15-03 VE N OW-15-01 Decline Portal T GAGT-14 RAI SE 1 74. 20 m LEVEL 1390 WEATHER STATION GAGT-06 LEVEL 1370 G
Slide 15: Decline from Surface Intersected Vein
Los Gatos Silver-Zinc-Lead Project: Decline from Surface Intersected Vein on Sept. 14, 2016 Looking Southwest ~2.5km Location of Decline-Vein Intersection NW Zone Central Zone Looking Northeast SE Zone 15
Slide 16: Trial Mining & Bulk Sample
Los Gatos Silver-Zinc-Lead Project: Trial Mining & Bulk Sample Results Meaningfully Higher! 6 Resource model predicted that the 5 trial mining area would average 307 g/t silver, 1.8% lead and 3.3% zinc Explosive 4 Round Ag g/t Pb % Zn % 1 Round 1 1082.9 10.97 11.82 Round 2 739.3 11.4 11.22 Round 4 5
Slide 17: Feasibility Study Mine Plan
Los Gatos Silver-Zinc-Lead Project: Feasibility Study Mine Plan 2016 Feasibility Study Mine Plan Drift and Fill Ore tonnes 6,735,233 Total diluted and Recovered Ore tonnes 9,808,433 Transverse Ore Tonnes 1,574,123 Diluted NSR $ Value/t 186.48 Longitudinal Ore Tonnes 1,499,076 Diluted AgEq g/t 501.18
Slide 18: Feasibility Study Metallurgy
Cerro Los Gatos Project: Feasibility Study Metallurgy • Primary Crusher → 2-Stage Grinding → Conventional Flotation to produce a Lead (high silver) concentrate & a Zinc concentrate • The samples have A×b values of 45-77 and SCSE values of 7.66-9.56 kWh/t, categorizing the samples as softer per JKTec
Slide 19: NI 43-101 Feasibility Study Results
Los Gatos Silver-Zinc-Lead Project: NI 43-101 Feasibility Study Results Cerro Los Gatos Feasibility Study Summary (100% Basis) Proven & Probable Reserve (including dilution): Tonnes 9.8 million Silver Grade 247 g/t Zinc Grade 4.8% Lead Grade 2.3% Gold Grade 0.3 g/t Initial Mine Life (based on curren
Slide 20: NI 43-101 Feasibility Study NPV Sensitivity
Los Gatos Silver-Zinc-Lead Project: NI 43-101 Feasibility Study NPV Sensitivity Project Sensitivity to Silver Price $700 $600 After-Tax NPV(5%) ($M) $500 $400 Every $5.00 increase in the silver $300 price adds ≈$125 million to the NPV $200 $100 $0 $15.00 $17.50 $20.00 $22.50 $25.00 $27.50 $30.00 $32
Slide 21: Cerro Los Gatos Financing Package
Los Gatos Silver-Zinc-Lead Project: Cerro Los Gatos Financing Package Cerro Los Gatos Project Financing (Millions): Debt Equity Total Facility Financing SSMRC (70%) $147M $74M $221M Dowa Metals & Mining (30%) $63M $32M $95M Los Gatos Preproduction CAPEX $210M $106M $316M 21
Slide 22: $210M Project Finance Facility Approved
Los Gatos Silver-Zinc-Lead Project: $210M Project Finance Facility Approved Issue • $210 million term loan Use of Proceeds • To fund ≈ 67% of Los Gatos Mine $316M initial construction cost • All project assets including share pledge from the JV sponsors Security (Sunshine & Dowa) Tenor • 10.5 years
Slide 23: Equity Financing
Los Gatos Silver-Zinc-Lead Project: Equity Financing Los Gatos Project Equity Contribution $106 million SSMRC 70% $74 million Dowa 30% $32 million • SSMRC completed a $36.5 million rights offering in November 2017 with $28 million contributed to the Los Gatos Project. • SSMRC has $46 million of equi
Slide 24: The Los Gatos Project Timeline
Sunshine Silver Mining & Refining Mining & Refining: The Los Gatos Project Timeline The SSMRC & Dowa Los Gatos Joint Venture will continually Add Value through Resource Expansion & Mine Construction Planned Drilling to increase the Cerro Los Gatos Reserves & Resources Construction of Cerro Los Gatos
Slide 25: Additional District Exploration Targets
Los Gatos Silver-Zinc-Lead Project: Additional District Exploration Targets Other Preliminary Resource Estimates: • Esther: 1.75MT at 129.7 gAg/t, 1.8% Pb, 3.7% Zn • Amapola: 1.46MT at 174.1 gAg/t, 0.2%Pb, 0.5%Zn Other Ore Grade Intercepts: • Cieneguita: 1.3m at 62.4g Ag/t, 5.4% Pb, 0.9% Zn • San Lu
Slide 26: The Sunshine Mine
The Sunshine Mine: Repositioning America’s Greatest Silver Mine for the Future 26
Slide 27: The District's Centroid of Silver Endowment
Sunshine Silver Mine: The District’s Centroid of Silver Endowment Bunker Hill The highest-grade tetrahedrite-dominant mine 226 g/t Ag1 in the Silver Valley M&I N/A Inf. N/A Lucky Friday 273 g/t Ag M&I 211M oz. Ag Inf. 34M oz. Ag Galena Sunshine 300 g/t Ag 827 g/t Ag M&I 42M oz. Ag Inf. 16M oz. Ag M&
Slide 28: Sunshine Mine Location and Infrastructure
3 Sunshine Sunshine Sunshine MineMine Location 2 Mine Location and Infrastructure: Location History and Existing Infrastructure and Infrastructure: and Infrastructure: • The Sunshine Mine was first discovered in 1884Tailings Storage Tailings Storage • The mine began production in 1914 and closed in
Slide 29: A Focus on Shallow Targets
Sunshine Silver Mine: A Focus on Shallow Targets • Numerous unexplored target areas identified for systematic exploration • New veins & extensions of known veins discovered in the upper areas of the deposit • Deposit also open at depth • Additional high potential zones near previously mined areas Us
Slide 30: Sunshine Mine Current Resources by Vein Set
Sunshine Mine Current Resources by Vein Set: Major Past Silver Producer with Extensive Remaining Endowment Sunshine & Related Split Veins M&I = 35Moz Ag 0 Level Crescent (UMG) U.S. Silver Inferred = 82Moz Ag Sunshine Sunshine Yankee Girl M&I = 5Moz Ag West Chance Inferred = 23Moz Ag Chester & 10 Vei
Slide 31: M&I Conversion and Discovery Expectation
M&I Conversion and Discovery Expectation: Modern Exploration Expected to Yield Meaningful Endowment Upgrades Sunshine Vein S Yankee Boy Split Vein New M&I = 10Moz Ag New M&I = 15Moz Ag West Chance Link Vein 10 Vein New M&I = 20Moz Ag New M&I = 30Moz Ag 0 Level Crescent (UMG) Future U.S. Silver Sunsh
Slide 32: Sunshine Silver Mine:
1600 Y 1800 Y 2000 Y 2200 Y 2600 Y 2800 Y 3000 Y 3200 Y 2400 Y DRILL STATION C DRILL STATION D 00 00 0 0 0 0 0 0 0 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 50 10010 010 0 10 0 10 0 100 6890 100 100 100 100 15 0 15 100 100 0 100 100 15 0 100 100 100 100 100 15 0 100 15 100 0 150 15
Slide 33: Recent Exploration Results - Station D
Sunshine Silver Mine: Recent Exploration Results Sterling Tunnel Station D Vertical Section 3200 Y A focus on shallow targets: Sunshine Vein Extension 3000 Y Discovery South Yankee Boy SplitVein Sunshine Vein Sunshine Vein 2800 Y 6725 Bulk SampleStope Intercept Length Ag DDH ID Cu (%) Pb (%) (m) (gr
Slide 34: Recent Exploration Results - Station C
Sunshine Silver Mine: Recent Exploration Results Sterling Tunnel Station C Vertical Section A focus on shallow targets: 3000 Y 10 Vein Discovery South Yankee Boy SplitVein 2800 Y 6725 Bulk 10 Vein SampleStope Intercept Length Ag 6725_asbuild st_tunnel_level 7490_asbuild DDH ID Cu (%) Pb(%) st_tunnel
Slide 35: New Discovery South Yankee Boy Split Vein
New Discovery South Yankee Boy Split Vein: Trial Mining Conducted • 0.3 Meter Wide Vein • Grading 3,869 g/t Ag, 2.05% Cu, 0% Pb • 1.68 Meter Wtd. Avg. Mining Width • Grading 1,322 g/t Ag, 0.65% Cu, 0.12% Pb • 1.1 Meter Wide Vein • Grading 2,152 g/t Ag, 1.02% Cu, 2.43% Pb • 2.2 Meter Wtd. Avg. Mining
Slide 36: 2014 NI 43-101 Compliant Resource Estimate & PEA
Sunshine Silver Mine: 2014 NI 43-101 Compliant Resource Estimate & PEA Ore Grade Contained Metal Tonnes Ag Cu Pb Zn Ag Eq Ag Cu Pb Zn Ag Eq (Mt) (g/t) (%) (%) (%) (g/t) (Moz) (Mlbs) (Mlbs) (Mlbs) (Moz) Measured 1.12 843 843 30.3 0.0 0.0 0.0 30.3 Indicated 1.87 752 752 45.2 0.0 0.0 0.0 45.2 Total Mea
Slide 37: Largest Mineral Rights Holder in Idaho's Silver Valley
Sunshine Silver Mine: Largest Mineral Rights Holder in Idaho’s Silver Valley Sunshine seized the opportunity during the sector downturn to become the largest mineral rights owner in Idaho’s Silver Valley, one of the world’s most prolific silver districts Sunshine Mine First Target: 400 MM OZ Silver
Slide 38: Purchased Sunshine Refinery in 2013
Sunshine Silver Mine: Purchased Sunshine Refinery in 2013 • A unique opportunity to be the only vertically integrated silver mining operation in the United States, having acquired the Sunshine Refinery in October 2013, and changed its name to Sunshine Mining & Refining Corporation The Refinery makes
Slide 39: Global Silver Project Comparison
In-Situ Mineral Resource Grades: Global Silver Project Comparison 1000 900 855 827 AgEq Gra de (g/t) 800 Ag Gra de (g/t) Average = 206 g/t Ag Average = 340 g/t Ag Eq 700 671 600 Grade (g/t) 500 400 300 248 200 100 0 SSMRC SSO FR SVM FVI MAG FRES-LN PAAS EDR CDE MND THO Note: Grades include all Measu
Slide 40: Cerro Los Gatos Project Construction Photo Gallery
-Cerro Los Gatos Project- Construction Photo Gallery 40
Slide 41: Project Overview
Project Overview: New Access Road New Water Clarification Pond 41
Slide 42: Underground Mine Surface Infrastructure Construction
Underground Mine Surface Infrastructure Construction: 42
Slide 43: Permanent Residential Camp Construction
Permanent Residential Camp Construction: 43
Slide 44: Initial Earthworks for the Processing Facilities
Initial Earthworks for the Processing Facilities: 44
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