Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (June 2019)
33 slides from Silvercorp Metals's investor presentation, Jun 26, 2019
Slide 1: Corporate Presentation
SVM:TSX/NYSE AMERICAN Corporate Presentation June 26, 2019
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 United States Private
Slide 3: China's Premier Silver Producer
CHINA’S PREMIER SILVER PRODUCER Historical Production (April 2006 – March 2019) ▸ Silver: 64M ounces ▸ Lead+Zinc: 921M lbs Ying Mining District, Henan Province ▸ Profit Distribution*: US$434M 15+ year mine life remaining BYP Mine, Hunan Province (Care and Maintenance) * Ying Mining District GC Mine,
Slide 4: 64 Million Ounces of Silver Produced Over 12 Years
64 MILLION OUNCES OF SILVER PRODUCED OVER 12 YEARS (5.7) (6.0) (6.1) * Silvercorp’s fiscal year is April 1-March 31 * Red numbers in brackets are fiscal year’s guidance SVM:TSX/NYSE AMERICAN 4
Slide 5: 921 Million Pounds of Lead & Zinc Produced Over 12 Years
921 MILLION POUNDS OF LEAD & ZINC PRODUCED OVER 12 YEARS (76.3) (81.4) (86.9) * Silvercorp’s fiscal year is April 1-March 31 * Red numbers in brackets are fiscal year’s guidance SVM:TSX/NYSE AMERICAN 5
Slide 6: Improved and Steady Head Grades at Ying Mining District
IMPROVED AND STEADY HEAD GRADES AT YING MINING DISTRICT Dilution Control Improvement Adopted Enterprise Blog (EB) * Per Technical Reports for Ying Mine dated December 31, 2016 & December 31, 2013 - LOM production plans, as revised. SVM:TSX/NYSE AMERICAN 6
Slide 7: Innovation to Reduce Dilution, Improve Safety and Increase Production Efficiency
INNOVATION TO REDUCE DILUTION, IMPROVE SAFETY AND INCREASE PRODUCTION EFFICIENCY “Enterprise Blog” (EB) - an internet social media system that collects and distributes work- related information more effectively between parties and locations across the organization. Time & date stamp Posted Posted Us
Slide 8: Financial Performance (Value & Profit per Tonne Ore Mined)
FINANCIAL PERFORMANCE (VALUE & PROFIT PER TONNE ORE MINED) Profit per tonne of ore was US$30 for Q4 FY2019 Silver Price (US$ per ounce) Per Tonne Value (US$) * Realized silver price is calculated using Shanghai Metal Exchange price, less smelter deduction and Value Added Tax (reduced from 16% to 13%
Slide 9: Metal Prices
METAL PRICES Silver Lead Zinc US$ Per Ounce US$ Per Pound US$ Per Pound Shanghai Metal Exchange quoted prices on May 30, 2019: Silver=3.475 RMB/gram, lead=16,200 RMB/tonne, Zinc=20,970 RMB/tonne, all including 13% value added tax (VAT). Conversion to net realized selling prices as follows: Silver in
Slide 10: Revenue Percentage by Metal
REVENUE PERCENTAGE BY METAL Lead and Zinc price increases boosted Lead and Zinc revenue percentage * Revenue percentage is indicated in calendar quarters SVM:TSX/NYSE AMERICAN 10
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS ▸ Cash + short term investments: US$115.3M (Mar.31, 2019) ▸ Annual dividend of US$0.025/share ▸ No Receivables ▸ Invested US$27 million in New Pacific since 2017 ▸ Bought back 14 million shares since 2005 for approx. US$56 million ▸ Total dividends paid to shareholders of approx
Slide 12: Quarterly Adjusted Net Income & Free Cash Flow
QUARTERLY ADJUSTED NET INCOME & FREE CASH FLOW Adjusted net income = adjusted from one time non-cash items Free cash flow = operating cash flow less capital expenditures less capital lease payments * Adjusted net income and free cash flow are indicated in calendar quarters SVM:TSX/NYSE AMERICAN 12
Slide 13: Steady Shares Outstanding
STEADY SHARES OUTSTANDING * Shares outstanding indicated in calendar quarters SVM:TSX/NYSE AMERICAN 13
Slide 14: Peer Comparison: Operating Performance
PEER COMPARISON: OPERATING PERFORMANCE * Comparison with peers in calendar quarters * All-In Sustaining Cost—net of by-products credits * EBITDA Margin Data Source: Capital IQ SVM:TSX/NYSE AMERICAN 14
Slide 15: Comparison with Peers: Key Valuation Ratios
COMPARISON WITH PEERS: KEY VALUATION RATIOS * Stock prices as of June 7, 2019 SVM:TSX/NYSE AMERICAN 15
Slide 16: Growth: Grow Shares Outstanding or Free Cash Flow?
GROWTH: GROW SHARES OUTSTANDING OR FREE CASH FLOW? 169.8M Silvercorp bought back 5,754,552 common shares of the Company since 2015 Free cash flow=operating cash flow less capital expenditures less capital lease payments * Comparison with peers on calendar quarters SVM:TSX/NYSE AMERICAN 16
Slide 17: Growing Reserves & Resources - Silver
GROWING RESERVES & RESOURCES - SILVER 1. Measured & Indicated Resources inclusive of Reserves. See Appendix III, IV and V for breakout of Measured, Indicated and Inferred, Proven and Probable categories. 2. Excludes Lead and Zinc. Gold was converted to Silver equivalent at a rate of 65:1. SVM:TSX/NY
Slide 18: Growing Reserves & Resources - Lead & Zinc
GROWING RESERVES & RESOURCES - LEAD & ZINC 1. Measured & Indicated Resources inclusive of Reserves. See Appendix III, IV and V for breakout of Measured, Indicated and Inferred, Proven and Probable categories. SVM:TSX/NYSE AMERICAN 18
Slide 19: Our Strategy to Support Quality Growth
OUR STRATEGY TO SUPPORT QUALITY GROWTH Maintain steady production with a focus on cost control Pursue growth opportunities capitalizing on corporate strengths: ▸ Grow existing assets organically through drilling ▸ Bring BYP back into production; targeting approx. 30,000 oz. gold/year ▸ New Pacific M
Slide 20: New Pacific Metals' Silver Sand Project
NEW PACIFIC METALS’ SILVER SAND PROJECT SVM:TSX/NYSE AMERICAN 20
Slide 21: Ownership and Coverage
OWNERSHIP AND COVERAGE Top 10 Institutional Investors % O/S Analyst Coverage 1 Van Eck Associates Corporation 6.57 Canada 2 Merian Global Investors (UK), LTD 3.12 Ryan Thompson BMO Capital Markets Craig Stanley Eight Capital 3 Renaissance Technologies, LLC 1.73 US 4 Global X Management Company, LLC
Slide 22: Ying Mining District in Henan: Silvercorp's Flagship Asset
YING MINING DISTRICT IN HENAN: SILVERCORP’S FLAGSHIP ASSET ▸ SGX, TLP, LME, LMW, HPG and HZG underground mines working over 200 veins within 68.74km²mining permits HPG ▸ Two centralized mills of 3,200 tpd capacity to produce silver-lead and zinc concentrates SGX ▸ 6 smelters within 200km ▸ Produced
Slide 23: GC Mine in Guangdong: The Second Mine
GC MINE IN GUANGDONG: THE SECOND MINE Our Newest Mine ▸ Commercial production commenced in 2014 ▸ Underground silver/zinc mine ▸ Excellent infrastructure and access ▸ Profitable operations Main Access Ramp SVM:TSX/NYSE AMERICAN 23
Slide 24: BYP Gold Mine: Preparing for Production
BYP GOLD MINE: PREPARING FOR PRODUCTION Status: ▸ Lead-Zinc mine suspended operations in August 2014 ▸ Continuing to review alternatives for this project, including capital requirements for upgrades to sustain ongoing production ▸ 2019 NI 43-101 gold resource identified 421,000 ounces measured and i
Slide 25: Production Guidance
PRODUCTION GUIDANCE Ying Mining District GC Mine Consolidated Production and cash F2019 F2019 F2020 F2019 F2019 F2020 F2019 F2019 F2020 costs Actual Guidance Guidance Actual Guidance Guidance Actual Guidance Guidance Ore (000' tonne) 620 630 630 289 250 270 909 880 900 Head Grades Silver (gram/tonne
Slide 26: FY2020 Expenditure Guidance
FY2020 EXPENDITURE GUIDANCE Ying Mining District GC Mine Consolidated Work Amount Work Amount Work Amount Mine Development and Facilities (meters) (US$ million) (meters) (US$ million) (meters) (US$ million) Mine Development and Capitalized Amount Tunneling* 60,205 20.0 715 0.9 60,920 20.9 Ramp devel
Slide 27: Head Office
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 investor@silvercorp.ca www.silvercorp.ca SVM:TSX/NYSE AMERICAN Silvercorp’s disclosure documents are available from the System for Electronic Document Analysis and
Slide 28: Appendices
APPENDICES SVM:TSX/NYSE AMERICAN 28
Slide 29: Appendix II Management & Board
APPENDIX II MANAGEMENT & BOARD 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 (ILLINOIS), Former Ernst & Young LLP Partner; over 30 years PubCo. Chief Financial Officer experience Yong-Jae Kim, L
Slide 30: Appendix III: Summary of Reserves
APPENDIX III: SUMMARY OF RESERVES1 Average Grades Contained Metal Reserves Reserve Tonnes Project Category (Million) Silver Lead Gold Zinc Silver Silver²Eq. Lead Zinc (g/t) (%) (g/t) (%) (Moz) (Moz) (t) (t) Proven 4.67 252 4.15 0.11 1.55 37.85 1.07 193,950 72,240 Ying Mining District Probable 7.63 2
Slide 31: Appendix IV: Summary of Resources
APPENDIX IV: SUMMARY OF RESOURCES1 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 5.91 266 0.13 4.36 1.64 50.55 1.56 257,600 96,690 Ying Mi
Slide 32: Appendix IV: Summary of Resources - BYP Mine
APPENDIX IV: SUMMARY OF RESOURCES - BYP MINE 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 - - 149 - - Gold area Measured & 4.3 3.1 - - 418 - - Indicated Inferred 1.3 2.5 - - 109 - - Lead and Zinc In
Slide 33: Endnotes and Cautionary Statements
ENDNOTES AND CAUTIONARY STATEMENTS 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 Silvercorp included in this prese
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