Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Investor Presentation (January 2024)
37 slides from Silvercorp Metals's investor presentation, January 2024
Slide 1: Profitable Silver Producer Positioned to Grow
PROFITABLE SILVER PRODUCER POSITIONED TO GROW Corporate Presentation TSX: SVM | NYSE AMERICAN: SVM January 2024 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 $430 M* • $0 debt, no financing since 2010 • Strategy – worldwide M&A targeting >$50M annual FCF • High margin/long mine life with reasonable capital Cash expenditures and timelines $189M • Announced
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 – December 2023) Ying Mining District, Henan Province (SGX, HPG, HZG, TLP, LME, LMW and DCG mines) • Silver: >93 Moz. • Lead + Zinc: >1.3 Blbs. • Profit Distribution: >US$520M • +15
Slide 5: Management Focus on Generating Free Cash Flow
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Profit (Green Line Below) on every tonne of ore mined Silver Price (US$ per ounce) Per Tonne Value (US$) Calendar Period • Realized silver price is calculated using the Shanghai Metal Exchange price, less smelter deduction an
Slide 6: Extensive Exploration for Organic Growth
EXTENSIVE EXPLORATION FOR ORGANIC GROWTH TSX: SVM | NYSE AMERICAN SVM Silvercorp’s extensive drilling & tunnelling Ying: 2,210 km of drilling and 735 km of tunnelling since 2004 GC: 395 km of drilling and 100 km of tunnelling since 2004 KM Calendar Year Benefits of drilling: 1) Made new discoveries,
Slide 7: Margins Consistently Outperform Industry Averages
MARGINS CONSISTENTLY OUTPERFORM INDUSTRY AVERAGES TSX: SVM | NYSE AMERICAN SVM EBITDA Margin Return on Equity TTM TTM 42% 8.4% Silvercorp Silvercorp VS. VS. 22% 15% 38% -0.5% Vanguard Peer Avg. GDX Peer Avg. Industrials ETF 75 40 60 30 42.2% 45 20 8.4% 30 10 15 0 0 -10 2010 2012 2014 2016 2018 2020
Slide 8: Management Focus on Generating Free Cash Flow
MANAGEMENT FOCUS ON GENERATING FREE CASH FLOW TSX: SVM | NYSE AMERICAN SVM Adjusted Net Income (US$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 9: Attractive Valuation Versus Peers
ATTRACTIVE VALUATION VERSUS PEERS TSX: SVM | NYSE AMERICAN SVM EV / EBITDA P / Adj E P / OCF TTM TTM TTM 2.8x VS. 15.2x 12.1x VS. 84.9x 4.9x VS. 30.6x Peer Avg. Peer Avg. Peer Avg. Silvercorp Silvercorp Silvercorp Silvercorp 2.8x Silvercorp 12.1x Fortuna 4.8x Endeavour Fortuna 5.0x 35.1x Silvercorp
Slide 10: Diversification into Gold and Outside of China
DIVERSIFICATION INTO GOLD AND OUTSIDE OF CHINA TSX: SVM | NYSE AMERICAN SVM Benefits for Silvercorp shareholders: ✓ Accretive transaction on a net asset value basis ✓ Addition of a largely de-risked, low-cost gold project that has key permits in place and is on track for first gold in second half 20
Slide 11: Nyanzaga Deposit & Lake Victoria Goldfields
NYANZAGA DEPOSIT & LAKE VICTORIA GOLDFIELDS TSX: SVM | NYSE AMERICAN SVM • Located ~35 km north of Barrick’s Bulyanhulu mine and 60 km east of AngloGold Ashanti’s Geita gold mine. • In 2022, Barrick and AngloGold produced ~1,068,000 oz gold from their mines in Tanzanian. • Lake Victoria Goldfields o
Slide 12: OreCorp Transaction Details
ORECORP TRANSACTION DETAILS TSX: SVM | NYSE AMERICAN SVM ⚫ Silvercorp to acquire, by means of an off-market takeover offer, all of the OreCorp Shares not Proposed already owned by Silvercorp (~400M shares) Transaction ⚫ OreCorp Board is unanimously recommending OreCorp shareholders ACCEPT the Offer
Slide 13: Overview of the Nyanzaga Gold Project
OVERVIEW OF THE NYANZAGA GOLD PROJECT TSX: SVM | NYSE AMERICAN SVM OreCorp Definitive Feasibility Study (August 2022) Mine Life (years) 10.7 LOM Ore Mined (Mt) 42.5 Head Grade (g/t Au) 2.1 Avg. Recovery (%) 88 LOM Production (Moz Au) 2.5 Avg. Annual Production (koz Au) 234 LOM Strip Ratio (w:o) 3.7:
Slide 14: Overview of the Nyanzaga Gold Project: Mill Feed Plan
OVERVIEW OF THE NYANZAGA GOLD PROJECT TSX: SVM | NYSE AMERICAN SVM OreCorp Definitive Feasibility Study (August 2022) Mill Feed Plan 4500 3.0 Open Pit Ore Underground Ore 4000 2.5 3500 3000 2.0 Mill Feed Ore (kt) Gold Grade (g/t) 2500 1.5 2000 1500 1.0 1000 2.5 Years for 0.5 500 Construction 0 0.0 Y
Slide 15: Overview of the Nyanzaga Gold Project: Gold Production Plan
OVERVIEW OF THE NYANZAGA GOLD PROJECT TSX: SVM | NYSE AMERICAN SVM OreCorp Definitive Feasibility Study (August 2022) Gold Production Plan Gold Production Gold Grade 350 3 300 2.5 250 Gold Production (koz) Gold Grade (g/t) 2 200 1.5 150 1 100 2.5 Years for 50 Construction 0.5 0 Y-3 Y-2 Y-1 Y1 Y2 Y3
Slide 16: Nyanzaga Project Development Improvement: Capital Cost Estimate Summary
NYANZAGA PROJECT DEVELOPMENT IMPROVEMENT PROJECT CAPITAL COST ESTIMATE SUMMARY TSX: SVM | NYSE AMERICAN SVM OreCorp 2022 DFS SVM Improvement SVM proposed improvement in US$M development plan to reduce pre- Pre-production Capital Estimate production capital Treatment Plant 89.2 Smaller plant a) Initi
Slide 17: 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 Globally significant Ag-Au 200 m thick near surface mined by open pit & tank polymetallic discovery oxidized
Slide 18: 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 2023 • Focused on vein extensions and discovery Mine optimization in progress • Increase mine mechanization with increased shr
Slide 19: 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 20: 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 21: 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) Ying Mine optimization and mechanization programs, new TSF, and mill expansion 4) Advance Kuanping to construction status with update
Slide 22: 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 23: 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 24: Ownership & Coverage
OWNERSHIP & COVERAGE TSX: SVM | NYSE AMERICAN SVM Top 10 Institutional Investors % O/S Analyst Coverage 1 Van Eck Associates 4.76 2 Renaissance Technologies 2.98 3 ETF Managers Group 2.85 4 Global X Management 2.47 5 Connor Clark & Lunn 2.31 6 Stabilitas GmbH 1.30 7 DZ Privatbank S.A. 1.30 8 Acadian
Slide 25: Jan-24 Dec-23 Nov-23
TSX:SVM $7 >425,000 HEAD OFFICE 30-Day Avg Daily Volume Suite 1750–1066 West Tel: 604-669-9397 Hastings St. Vancouver, BC Investor@silvercorp.ca $6 Canada V6E 3X1 www.silvercorpmetals.com NYSE American:SVM >1,300,000 30-Day Avg Daily Volume $5 $4 $3 $2 FOLLOW US ON $1 Jan-24 Jan-22 Jan-23 Feb-22 Sep
Slide 26: Appendices
APPENDICES TSX: SVM 26 NYSE AMERICAN: SVM
Slide 27: Leadership: A Solid History of Value Creation
LEADERSHIP: A SOLID HISTORY OF VALUE CREATION TSX: SVM | NYSE AMERICAN SVM Management Board of Directors Rui Feng, Ph.D., Geology Rui Feng, Ph.D., Geology Chairman and CEO Derek Liu, MBA, CGA, CPA Yikang Liu, Former Dep. Gen. Sec. of the Chief Financial Officer China Mining Assoc.; over 40 years geo
Slide 28: YTD Fiscal 2024 Production and Capital Expenditure Versus Guidance
YTD FISCAL 2024 PRODUCTION AND CAPITAL EXPENDITURE VERSUS GUIDANCE TSX: SVM | NYSE AMERICAN SVM FY2024 Production Head grades Metal production Production costs Ore processed Gold Silver Lead Zinc Gold Silver Lead Zinc Cash cost AISC (tonnes) (g/t) (g/t) (%) (%) (oz) (Koz) (Klbs) (Klbs) ($/t) ($/t) S
Slide 29: Ying Mining District, Henan
YING MINING DISTRICT, HENAN TSX: SVM | NYSE AMERICAN SVM • SGX, TLP, LME, LMW, HPG, HZG and DCG underground mines have Ying Mining District: 4 mining permits 68.59km² identified over 300 veins • 2 mills of 2,500 tpd capacity produce silver-lead and zinc concentrates • 6 smelters within 200 km ² ¹ ¹
Slide 30: Revenue Percentage by Metal
REVENUE PERCENTAGE BY METAL TSX: SVM | NYSE AMERICAN SVM Base Metals: 34% Gold: 8% Silver: 58% Calendar Quarters 30
Slide 31: Realized Metal Price Examples
REALIZED METAL PRICE EXAMPLES TSX: SVM | NYSE AMERICAN SVM Silver Lead Zinc US$ 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 32: 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 33: 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 36 and 40 for notes and a detailed breakdown of BYP’s
Slide 34: 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 35: 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 36: 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 37: 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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