Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (May 2011)
36 slides from Silvercorp Metals's investor presentation, May 2, 2011
Slide 1: The Premier Primary Silver Producer in China Today… A Global Producer Tomorrow
NYSE: SVM The Premier Primary Silver Producer in China Today… A Global Producer Tomorrow. Corporate Presentation May 2, 2011
Slide 2: Cautionary Statements
NYSE: SVM Cautionary 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 Private Securiti
Slide 3: Capital Structure & Financial Highlights
NYSE: SVM Capital Structure & Financial Highlights Capital Structure Financial Highlights2 First 9 months Fiscal Year NYSE: SVM; TSX: SVM Fiscal Year 2011 2010 52-Week Hi/Low: US$16.32/$5.86 Revenue US$124.9 M US$107.2 M Shares Outstanding1: 174.6 Million Net Income US$56.3 M US$38.5 M 3-mo Avg. Dai
Slide 4: Industry Leading Profitability
NYSE: SVM Industry Leading Profitability Gross Profit Margin Cash Cost per oz Silver Quarter ended Dec/2010 adjusted for by-product credits – Quarter ended Dec/2010 Pan Silver Hecla Silvercorp American Wheaton $6.61 $6.75 $4.02 $3.25 ($0.25) ($3.75) ($0.14) ($7.25) ($7.13) Lowest cost producer of
Slide 5: Management & Board
NYSE: SVM Management & Board Management Rui Feng, Ph.D., Geology Chairman & CEO, Director Myles J. Gao, P.Geo. President & COO, Director Maria Tang, CA, CPA Dr. Feng & Yikang Liu Chief Financial Officer Lorne Waldman, MBA, LL.B. Corporate Secretary Board of Directors Shaoyang Shen, MBA, CMA Rui Feng
Slide 6: Silvercorp's Strategic Vision
NYSE: SVM Silvercorp’s Strategic Vision Silvercorp’s strategy is to focus on generating cash flows early on by developing high grade projects that may be too small for large companies and too large for junior companies: 1) Develop mine operations and generate cash flows before the project’s potentia
Slide 7: Silvercorp Operations & Development Projects
NYSE: SVM Silvercorp Operations & Development Projects Silvertip Project, British Columbia FY2014: ~1 Moz Ag BYP Project, Hunan China Province FY2012: ~26,000 oz Au Canada GC Project, Guangdong Silvercorp Head Office Province FY2013: ~1.0 Moz Ag, Ying Mining District, Henan Province FY2014: ~2.0 Moz
Slide 8: Silver Production History & Forecast
NYSE: SVM Silver Production History & Forecast 12.00 Silver and Gold (at Ag Eq) Production - Actual and Forecast1,2 Silvertip 10.6E 10.00 GC 1.00 BYP 8.3E Ounces of Silver HPG+TLP+LM 7.1E 2.00 8.00 Ying 1.00 5.3E 1.30 1.50 1.90 Millions 6.00 4.70 4.07 4.29 0.93 1.30 1.40 1.45 4.00 0.51 0.37 0.88 1.9
Slide 9: Reserve & Resource Growth
NYSE: SVM Reserve & Resource Growth History Reserve & Resources: FY2004 - FY2010 275 April 2005: Resource defined at Ying 250 P&P Reserves 245.9 May 2006: Drilling doubles Ying 225 M&I Resources resources 63.4 Inferred Resources 194.7 Ounces of Silver (Millions) September 2007: Resource expansion at
Slide 10: FY2012: Another Year of Production Growth
NYSE: SVM FY2012: Another Year of Production Growth Ores Head Grade Metal Production Processed Projects (‘000 Silver Gold Ag Eq Lead Zinc Silver Gold Lead Zinc tonne) (‘000 (‘000 (‘000 (mil (mil (g/t) (g/t) (%) (%) oz) oz) oz)* lbs) lbs) Ying 325 460 8.3 3.0 4,300 4 4,500 56 15 Ying TLP 165 145 2.8
Slide 11: FY2012: Capital Expenditure
NYSE: SVM FY2012: Capital Expenditure Mine Development Mill Construction & Exploration & Permitting Total Surface Facilities Projects Cost Tunnel * Cost Cost Drilling Cost ($million) (metre) ($million) ($million) (metre) ($million) Ying $6.8 22,830 $3.3 $4.5 85,000 $14.6 Ying TLP $2.7 11,684 $0.9 $1
Slide 12: The China Advantage
NYSE: SVM The China Advantage Low Capital & Low-cost mining equipment and Operating Costs experienced labour. Rapid Construction All supplies sourced locally and hard Times working labour force. Close to End Market Several smelters located 200 km or closer to Silvercorp’s projects. Third Largest Sil
Slide 13: Ying Mining Camp: Exploration to Grow Resources and Reserve
NYSE: SVM Milling Capacity: 2,500 tpd YING MINING CAMP: Exploration Mining Capacity: ~2,000 tpd to Grow Resources and Reserve Goal at the Ying Mining Camp is New 1,500 tpd Mill 1,000 tpd Mill to extend the current mine life of 10 years and to expand the mining capacity from current 2,000 tonnes pe
Slide 14: GC Development Project: 2nd Base for Growth in China
NYSE: SVM GC Development Project: 2nd Base for Growth in China Construction of 1,500 tonne per day mine and mill has commenced FY2012 capital expenditure: $22.5 MM Initial 700 tonnes per day production by end of FY2012 to produce 1 Moz Silver Ying Mining District At full mining capacity of 1
Slide 15: GC Development Project: Resource Growth Potential
NYSE: SVM GC Development Project: Resource Growth Potential Drill Program 14
Slide 16: BYP Project: 3rd Production Base in China
NYSE: SVM BYP Project: 3rd Production Base in China for Growth and Diversification Acquired 70% interest by paying US$24 million cash and contributing US$9 million to the JV company. 3.67 km2 mining permit, safety production permit 400 tpd Mill and 400 tonne per day floatation mill built in 2006
Slide 17: BYP Project: Exploration to Grow Resources and Reserve
NYSE: SVM BYP Project: Exploration to Grow Resources and Reserve Non NI 43-101 historic resource of 482,000 oz of Gold, plus 3.1 MM tonnes of 2.45% Lead and 5.26% Zinc* Complete a NI 43-101 report 50,000m surface and underground drilling program to upgrade/expand current resource ($3MM) in FY2012
Slide 18: BYP Project: Exploration to Grow Resources and Reserve
NYSE: SVM BYP Project: Exploration to Grow Resources and Reserve The 50,000m drilling program will target: To upgrade the main, #3 gold mineralization zone To extend along the strike and down dip of the F5 fault, where #XII lead-zinc- gold mineralization and #1 gold mineralization zones occur; and
Slide 19: BYP Project: Exploration to Grow Resources and Reserve
NYSE: SVM BYP Project: Exploration to Grow Resources and Reserve To extend along the strike and down dip of the F5 fault, where #XII lead-zinc-gold mineralization and #1 gold mineralization zones occur 18
Slide 20: Silvertip Project: Upcoming High-Grade Silver Mine in BC
NYSE: SVM Silvertip Project: Upcoming High-Grade Silver Mine in BC >$40 million spent on exploration including 2.4 km of tunnel and 71,472 m of surface/underground drilling in 491 holes before year 2000. 30 million oz silver resource includes High-grade starter pockets (>1,000 grams per tonne Si
Slide 21: Silvertip: Positive Preliminary Economic Assessment
NYSE: SVM Silvertip: Positive Preliminary Economic Assessment PA Study Highlight 500 t/d seasonal operation or 72,000 t/year For the upside case (prices: Ag=$25/oz; Pb=$1/lb; and Zn=$1/lb), the undiscounted pretax NPV is $311-million, with a pretax IRR of 49%. Capital cost: $49 MM with sustain
Slide 22: Strong Resource Growth Potential at Silvertip
Strong Resource Growth Potential at Silvertip NYSE: SVM 21
Slide 23: Summary of Reserves/Resources
NYSE: SVM Summary of Reserves/Resources Resource Contained Metal Reserves RESERVE CATEGORY (Tonnes) Ag (oz) Pb (t) Zn (t) Ag Equiv.* (oz) Proven 1,322,201 17,182,882 101,532 30,093 32,347,159 Probable 4,820,408 46,171,138 283,305 87,466 89,224,423 Total 6,142,609 63,354,020 384,837 117,559 121,571,5
Slide 24: Contact Information
NYSE: SVM Contact Information 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 Email: info@silvercorp.ca Website: www.silvercorpmetals.com INVESTOR RELATIONS: investor@silvercorp.ca China Offices Silvercorp’s
Slide 25: Ying Mining District: Summary of Mines
NYSE: SVM Ying Mining District: Summary of Mines • 90% of total production & profits in FY2010 • Produced 4.16Moz Ag, 54.5Mlb Pb & 14.1Mlb Zn in FY2010 Ying • Head grades of 465 gram per tonne Ag, 8.5% Pb & 3.1% Zn in FY2010 Mine • Cash cost of -$6.66 in FY2010 • 77.5% JV with Henan Geological Burea
Slide 26: FY2012 Ying Mining Camp: Capital Expenditure
NYSE: SVM FY2012 Ying Mining Camp: Capital Expenditure Mine Development and Mill Construction Ying TLP HPG&LM Total metre $million metre $million metre $million metre $million Horizontal Tunnels 20,000 $3.3m 10,000 $1.7m 10,000 $2.0m 40,000 $7.0m Shafts, Raises & Declines 2,830 $3.5m 1,684 $1.0m 2,8
Slide 27: Aggressive Exploration and Drilling to Grow Resources and Reserve
NYSE: SVM Aggressive Exploration and Drilling to Grow Resources and Reserve FY2012 Exploration Expenditures Projects Drilling Cost (metre) ($ million) U/G drilling 75,000 $3.3 Ying Surface drilling 10,000 $1.2 Ying TLP U/G drilling 36,000 $1.7 Mining Camp HPG U/G drilling 15,000 $0.7 LM U/G drilling
Slide 28: Ying Mine: Exploration to Grow Resources and Reserve
NYSE: SVM YING MINE: Exploration to Grow Resources and Reserve Ying Mine Drilling Program 75,000m of underground drilling to define down dip and strike extension. S2 and S7-1 will be drilled laterally, while S16, S14, S8, S7 and S5 veins will drilled in depth 10,000m of surface drilling to test se
Slide 29: TLP & LM Mines: Exploration to Grow Resources and Reserve
NYSE: SVM TLP & LM MINES: Exploration to Grow Resources and Reserve TLP Mine FY2012 Drilling Program 36,000m of underground drilling to explore (1) up dip of the I, II, III veins which were the main focus of historical mining, and (2) IW, VI, T16, T22, T31 and other veins that are narrow but higher
Slide 30: HPG Mine: Exploration to Grow Resources and Reserve
NYSE: SVM HPG MINE: Exploration to Grow Resources and Reserve HPG Mine FY2012 drilling program 15,000m underground drilling program to define down dip and strike extension of the H15W, H17, H15, H5 and H16 veins 29 29 29
Slide 31: FY2012 GC Project: Mill & Mine Development Capital Expenditures
NYSE: SVM FY2012 GC Project: Mill & Mine Development Capital Expenditures Quantities Budget ($million) Mine Development: Shaft Depth (5 m in diameter) 500 m $1.5 Ramp (4m x 4m)* 1,500 m $1.2 1,500t/d Mill Construction, Tailing Dam $12 Land-usage Rights $5.0 Surface facilities $2.8 Total $22.5** * To
Slide 32: GC Project: Exploration to Grow Resources and Reserve
NYSE: SVM GC Project: Exploration to Grow Resources and Reserve GC Project FY2012 drilling program 20,000m surface drilling program to target V4 Vein, which has a surface outcrop over 1,500m, as defined by trenches and geochemical anomalies but only drilled by 4 holes Several silver-lead geochemic
Slide 33: BYP Project: Exploration to Grow Resources and Reserve
NYSE: SVM BYP Project: Exploration to Grow Resources and Reserve Gold Mineralization seems to be strata-bound and also controlled by F5 Fault, and is related to fine quartz veining and disseminated pyrite developed along joints and fractures in sandstones Lead-Zinc-Gold Mineralization also seems t
Slide 34: FY2012 BYP Project: Mill & Mine Development Capital Expenditures
NYSE: SVM FY2012 BYP Project: Mill & Mine Development Capital Expenditures Quantities Budget ($million) Upgrade existing 400 t/d mill $1.5 A cement back-filling facility $1.5 Mine development tunnels 7,000 metres $1.5 Land usage rights, surface facilities $2.5 Ramp (4m x 4m) 1,500 metres $2 Mill Exp
Slide 35: Silvertip Project: Exploration to Grow Resources and Reserve
NYSE: SVM Silvertip Project: Exploration to Grow Resources and Reserve Donegal Mountain – Silvertip Project Similar type of the Ag-Pb-Zn mineralization to the Silvertip deposit, which occurs along the contact of the limestone and sandstone, was identified at Donegal Mountain, about 8 km south of th
Slide 36: Silvertip Project: Exploration to Grow Resources and Reserve
NYSE: SVM Silvertip Project: Exploration to Grow Resources and Reserve Donegal Mountain – Silvertip Project Projected mineralization zone along the contact of the limestone and sandstone and two proposed drill holes 35 35 35