Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (August 2023)
36 slides from Silvercorp Metals's investor presentation, August 2023
Slide 1: Profitable Silver Producer Positioned to Grow
PROFITABLE SILVER PRODUCER POSITIONED TO GROW Corporate Presentation TSX: SVM | NYSE AMERICAN: SVM August 2023 1
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: Compelling Value for Profitable and Growing Silver Producer
COMPELLING VALUE FOR PROFITABLE AND GROWING SILVER PRODUCER TSX: SVM | NYSE AMERICAN SVM Market Cap $451M* • $0 debt, no financing since 2010 • Strategy – worldwide M&A targeting >$50M annual FCF • High margin/long mine life with reasonable capital expenditures and timelines Cash • Announced a bindi
Slide 4: Stable & Profitable Silver Producer Positioned to Grow
STABLE & PROFITABLE SILVER PRODUCER POSITIONED TO GROW TSX: SVM | NYSE AMERICAN SVM Historical Production (April 2006 – June 2023) Ying Mining District, Henan Province (SGX, HPG, HZG, TLP, LME, LMW and DCG mines) • Silver: >90 Moz. • Lead + Zinc: >1.3 Blbs. • Profit Distribution: >US$520M • +15 year
Slide 5: Margins Consistently Outperform Industry Averages
MARGINS CONSISTENTLY OUTPERFORM INDUSTRY AVERAGES TSX: SVM | NYSE AMERICAN SVM EBITDA Margin Return on Equity TTM TTM 40% 7.6% Silvercorp Silvercorp VS. VS. 20% 15% 38% -1.5% Vanguard Peer Avg. GDX Peer Avg. Industrials ETF 75 40 60 30 40.4% 45 20 7.6% 30 10 15 0 0 -10 2010 2012 2014 2016 2018 2020
Slide 6: Management Focus on Generating Free Cash Flow
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Adjusted Net Income (US$M) Free Cash Flow (US$M) Calendar Year Calendar Year Adjusted net income = adjusted for one-time non-cash items, FX gain(loss), Free cash flow = operating cash flow less capital expenditures, less capi
Slide 7: Attractive Valuation Versus Peers
ATTRACTIVE VALUATION VERSUS PEERS TSX: SVM | NYSE AMERICAN SVM EV / EBITDA P / Adj E P / OCF TTM TTM TTM 3.2x VS. 17.2x 12.7x VS. 87.9x 6.1x VS. 31.0x Peer Avg. Peer Avg. Peer Avg. Silvercorp Silvercorp Silvercorp Silvercorp 3.2x Silvercorp 12.7x Fortuna 4.3x Fortuna 5.0x Fortuna 33.2x Silvercorp 6.
Slide 8: OreCorp Transaction Rationale
ORECORP TRANSACTION RATIONALE TSX: SVM | NYSE AMERICAN SVM Adds Nyanzaga, a robust growth project well suited to Silvercorp’s technical expertise Immediate precious metals diversification in a highly prospective jurisdiction Enables shareholders to participate in a larger company with greater
Slide 9: OreCorp Transaction Details
ORECORP TRANSACTION DETAILS TSX: SVM | NYSE AMERICAN SVM Proposed ⚫ Silvercorp to acquire 100% of the shares of OreCorp by way of a Scheme of Arrangement (the Transaction “Scheme”) under the Australian Corporations Act 2001 (Cth) ⚫ For each OreCorp Share held, OreCorp shareholders to receive A$0.15
Slide 10: Overview of Tanzania & Lake Victoria Goldfields
OVERVIEW OF TANZANIA & LAKE VICTORIA GOLDFIELDS TSX: SVM | NYSE AMERICAN SVM Tanzania Overview Lake Victoria Goldfields • Tanzania has seen major recent investment by majors including: Barrick, BHP, AngloGold Ashanti, TotalEnergies and Shell Plc • Hydro power will deliver >70% of Tanzania’s electric
Slide 11: Overview of the Nyanzaga Gold Project
OVERVIEW OF THE NYANZAGA GOLD PROJECT TSX: SVM | NYSE AMERICAN SVM Asset Snapshot Definitive Feasibility Study (August 2022)1 Description • Open pit and underground Au mine Mine Life (years) 10.7 • 84% owned by OreCorp • Government of Tanzania has a 16% free carried LOM Ore Mined (Mt) 42.5 Ownership
Slide 12: Nyanzaga Development Plan
NYANZAGA DEVELOPMENT PLAN TSX: SVM | NYSE AMERICAN SVM Silvercorp has identified a number of opportunities in the Nyanzaga Development Plan that have potential to enhance the operation Resettlement Increased mineral Initial capex & LOM action plan reserve profile G&A reduction • The A$28M placement
Slide 13: Incubating World Class Opportunities – 28.2% New Pacific Metals Investment
INCUBATING WORLD CLASS OPPORTUNITIES – 28.2% NEW PACIFIC METALS INVESTMENT TSX: SVM | NYSE AMERICAN SVM Silver Sand Project Carangas Project Silverstrike Project A large silver deposit to be An extensive silver horizon 200 m thick near surface mined by open pit & tank above a thick gold deposit oxid
Slide 14: Ying District – Growth Through Drilling, Optimization, Expansion & Consolidation
YING DISTRICT – GROWTH THROUGH DRILLING, OPTIMIZATION, EXPANSION, & CONSOLIDATION TSX: SVM | NYSE AMERICAN SVM Drilled ~1,000,000 m in 2020-2022 • 270,000+ metres planned in FY2024 • Resource expansion and gold discovery Mine optimization in progress • Improve mine planning and head grades • Enhance
Slide 15: Building Silver Inventory While Growing Low Cost Production
BUILDING SILVER INVENTORY WHILE GROWING LOW COST PRODUCTION TSX: SVM | NYSE AMERICAN SVM P&P Reserves M&I Resources (not in P&P) Inferred Resources Ag & AgEq. Ounces (M) 1 152 155 126 121 108 115 102 102 102 141 86 86 121 120 96 97 95 119 65 62 75 50 50 57 57 57 77 34 63 57 102 99 99 103 103 103 115
Slide 16: Catalysts
CATALYSTS TSX: SVM | NYSE AMERICAN SVM 1) Increased production forecast for FY2024 2) Additional drilling to upgrade resources to reserves and make new discoveries 3) Mine optimization programs, new TSF and mill at Ying 4) Advance Kuanping to construction status with updated plan and cost estimates
Slide 17: 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 83.5% of the 4,486,404 m³ of water used in our processing plants l
Slide 18: 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 ➢ The most favorable method ➢ Further waste reduction SGX MINE WASTE WATER TREATMENT SYSTEM 1M T/Y WASTE ROCK AGGREGATE PLANT YING MINES YING MINES
Slide 19: Ownership & Coverage
OWNERSHIP & COVERAGE TSX: SVM | NYSE AMERICAN SVM Top 10 Institutional Investors % O/S Analyst Coverage 1 Van Eck Associates 4.77 Canada Felix Shafigullin Eight Capital 2 ETF Managers Group 2.87 Justin Stevens PI Financial 3 Renaissance Technologies 2.67 Dalton Baretto Canaccord Genuity 4 Global X M
Slide 20: TSX:SVM NYSE American:SVM
$7 HEAD OFFICE TSX:SVM Suite 1750–1066 West Tel: 604-669-9397 >430,000 Hastings St. Vancouver, BC Investor@silvercorp.ca 30-Day Avg Daily Volume $6 Canada V6E 3X1 www.silvercorpmetals.com $5 $4 $3 $2 NYSE American:SVM >1,100,000 FOLLOW US ON 30-Day Avg Daily Volume $1
Slide 21: Appendices
TSX: SVM NYSE AMERICAN: SVM APPENDICES
Slide 22: Leadership: A Solid History of Value Creation
LEADERSHIP: A SOLID HISTORY OF VALUE CREATION TSX: SVM | NYSE AMERICAN SVM Management Board of Directors Rui Feng, Ph.D., Geology Rui Feng, Ph.D., Geology Chairman and CEO Derek Liu, MBA, CGA, CPA David Kong, CA, CPA, Former Ernst & Chief Financial Officer Young LLP Partner; over 30 years PubCo. exp
Slide 23: Fiscal 2023A Production and Capex
FISCAL 2023A PRODUCTION AND CAPEX TSX: SVM | NYSE AMERICAN SVM FY2023A Production Head grades Metal production Production costs Ore processed Gold Silver Lead Zinc Gold Silver Lead Zinc* Cash cost AISC (tonnes) (g/t) (g/t) (%) (%) (Koz) (Koz) (Klbs) (Klbs) ($/t) ($/t) Fiscal 2023 Ying Mining Distric
Slide 24: YTD Fiscal 2024 Production and Capital Expenditure Versus Guidance
YTD FISCAL 2024 PRODUCTION AND CAPITAL EXPENDITURE VERSUS GUIDANCE TSX: SVM | NYSE AMERICAN SVM FY2024 Production Head grades Metal production Production costs Ore processed Gold Silver Lead Zinc Gold Silver Lead Zinc Cash cost AISC (tonnes) (g/t) (g/t) (%) (%) (oz) (Koz) (Klbs) (Klbs) ($/t) ($/t) Q
Slide 25: Ying Mining District, Henan
YING MINING DISTRICT, HENAN TSX: SVM | NYSE AMERICAN SVM • SGX, TLP, LME, LMW, HPG, HZG and DCG underground mines have Ying Mining District: 4 mining permits 68.59km² identified over 300 veins • 2 mills of 3,200 tpd capacity produce silver-lead and zinc concentrates • 6 smelters within 200 km ² • Pr
Slide 26: Extensive Exploration for Organic Growth
EXTENSIVE EXPLORATION FOR ORGANIC GROWTH TSX: SVM | NYSE AMERICAN SVM Silvercorp’s extensive drilling & tunnelling Ying: 2,210 km of drilling and 735 km of tunnelling since 2004 GC: 395 km of drilling and 100 km of tunnelling since 2004 KM Calendar Year Benefits of drilling: 1) Made new discoveries,
Slide 27: Revenue Percentage by Metal
REVENUE PERCENTAGE BY METAL TSX: SVM | NYSE AMERICAN SVM Base Metals: 37% Gold: 4% Silver: 59% Calendar Quarters 27
Slide 28: Realized Metal Price Examples
REALIZED METAL PRICE EXAMPLES TSX: SVM | NYSE AMERICAN SVM Silver Lead Zinc US$ Per Ounce US$ Per Pound US$ Per Pound * Net of value added tax Shanghai Metal Exchange quoted prices on February 14, 2023: Silver=4.910 RMB/gram, lead=15,125 RMB/tonne, Zinc=23,110 RMB/tonne, all including 13% VAT. Conve
Slide 29: 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 30: 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 34 and 35 for notes and a detailed breakdown of BYP’s
Slide 31: Building Lead & Zinc Inventory While Growing Production
BUILDING LEAD & ZINC INVENTORY WHILE GROWING PRODUCTION TSX: SVM | NYSE AMERICAN SVM P&P Reserves M&I Resources (not in P&P) Inferred Resources Pb + Zn Pounds (M) 2,738 2,818 2,471 2,381 2,313 2,367 1,894 1,894 2,020 2,020 2,020 2,885 2,420 2,209 1,393 1,340 1,172 1,471 1,527 2,191 1,133 1,133 1,281
Slide 32: Management Focus on Generating Free Cash Flow
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 Period • Realized silver price is calculated using the Shanghai Metal Exchange price, less smelter deduction an
Slide 33: China Investment Considerations
CHINA INVESTMENT CONSIDERATIONS TSX: SVM | NYSE AMERICAN SVM 1) Silvercorp operations are held through Chinese entities • Significant employers, taxpayers and contributors to the local economies • We supply necessary raw materials for manufacturing exporters 2) Many companies depend on China for man
Slide 34: 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 35: 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 36: Endnotes
ENDNOTES TSX: SVM | NYSE AMERICAN SVM Qualified Persons The scientific and technical information contained herein has been reviewed and approved by Guoliang Ma, P. Geo., who is a Qualified Person (“QP”) within the meaning of National Instrument 43-101 – Standards Of Disclosure for Mineral Projects (
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