Silvercorp Metals Inc. · TSX:SVM
Silvercorp Metals — Non-Deal Roadshow (September 2016)
35 slides from Silvercorp Metals's roadshow presentation, Sep 30, 2016
Slide 1: The Premier Silver Producer in China Corporate Presentation
OTC: SVMLF The Premier Silver Producer in China Corporate Presentation September 30, 2016 0
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 Private Securities Li
Slide 3: Overview: Strategically Focused on Silver Mining in China
Overview: Strategically Focused on Silver Mining in China Ying Mining District, Henan Province FY2017: 4.6Moz Silver XHP Project Henan Province China BYP Mine, Reserves & Silver Lead Zinc (MOz) (Kt) (Kt) Hunan Province Resources1 (On Care and Maintenance) Proven & Probable Reserves 101.0 442.5 267.5
Slide 4: Silvercorp's Strategy
Silvercorp’s Strategy Our Strategy • Grow existing assets organically through land expansion and drilling • Acquire under-explored, smaller-scale mining projects with resource growth potential • Apply leading edge mine techniques to optimize operations, reducing dilution and costs • Leverage underut
Slide 5: Financial Snapshot – Q1 FY2017 Results
Financial Snapshot – Q1 FY2017 Results Three Months Ended Three Months Ended June 30, 2016 June 30, 2015 (millions US$) (millions US$) Revenue $35.3 $32.2 Gross Profit $15.7 $11.5 Net Income $6.5 $3.8 Cash Flow from Operations $20.2 $13.3 Cash, cash equivalents and short-term investments: $73.4 Mill
Slide 6: Low Cost Silver Producer - Fiscal 2017 Q1 Results
Low Cost Silver Producer - Fiscal 2017 Q1 Results Low cost producer of silver - cash cost of $0.08** per Ag ounce for Q1 FY2017 Q1 FY2017 Sales Mix by Metal 50% 45% Gross Profit Margins* 45% Zinc, Other, 40% 0.3% 36% 8.4% 34% 35% 29% 30% 24% Lead, 25% 23% 29.7% Silver, 20% 59.1% 15% 15% 10% Gold,
Slide 7: Low All in Sustaining Cost Relative to Peers
Low All in Sustaining Cost Relative to Peers 14.92 15.00 AISCC 12.00 11.31 10.97 10.53 9.62 9.00 8.16 7.06 6.00 3.00 0.00 * Quarter ended Jun. 30, 2016. 6 6
Slide 8: Low Valuation Matrix Relative to Peers
Low Valuation Matrix Relative to Peers EV/EBITDA P/CF 15.0 20.0 16.0 10.0 12.0 8.0 5.0 4.0 0.0 0.0 SVM SVM CDE PAAS FVI EDR FR CDE SVM SVM PAAS FVI EDR FR 2016E 2017E 2016E 2017E Source: Raymond James Report September 22, 2016. 7 7
Slide 9: Ying Mining District: Silvercorp's Flagship Asset
Ying Mining District: Silvercorp’s Flagship Asset • Flagship Ying District consists of underground mines including SGX, TLP, LM, and HPG mines • Over 70km2 land package • Extensive underground drilling has maintained mine life at >10 years • Has produced over 46.6 million Oz silver since 2006 • Two
Slide 10: Enterprise Blog: A Tool to Achieve Dilution and Cost Control
Enterprise Blog: A Tool to Achieve Dilution and Cost Control The significant improvement in the head grades of silver, lead and zinc since the December quarter of 2015 can be attributed to implementation of an internal “Enterprise Blog” system in the management of Mine Production and Safety Informat
Slide 11: Enterprise Blog: A Tool to Achieve Dilution and Cost Control
Enterprise Blog: A Tool to Achieve Dilution and Cost Control Benefits of the “Enterprise Blog” • Information collection, distribution, retrieval, and monitoring has become transparent and immediate. • The information and knowledge collected by the frontline technicians or engineers freely flows thro
Slide 12: Improving Head Grades
IMPROVING HEAD GRADES 200,000 400 Silver Head Grades and Ore Production Monthly Data at Ying Mining District Tonnes Grades (Jan 2012 to Jun 2016) 180,000 350 160,000 300 Silver Grade Gram/tonne 140,000 250 120,000 Tonnes of Ore 100,000 200 80,000 150 60,000 100 40,000 50 20,000 0 0 1111
Slide 13: Ying Mining District: Cost Control Efforts are Working
Ying Mining District: Cost Control Efforts are Working • Cost cutting efforts have succeeded at reducing head counts and lowering general and administration costs at Ying. • An employee incentive No. 2 – 2,200 tpd Mill compensation plan is encouraging more efficient production • General and administ
Slide 14: Net profit per tonne for Ying Mining District
Net profit per tonne for Ying Mining District 13 13
Slide 15: Consolidated net profit per tonne
Consolidated net profit per tonne 14 14
Slide 16: New 43-101 Report Expected at Ying Mining District
New 43-101 Report Expected at Ying Mining District 225,000m of drilling and 128,000m of tunnelling between 2013 - 2016 • Expansion and definition of previous known Mineral Resource blocks. • New mineralization defined downdip and along strike within known vein structures. • New mineralized parallel
Slide 17: Reserve & Resource Growth
Reserve & Resource Growth Updated Ying District NI43-101 180 Reserves & Resources: FY2010 - FY2014 expected - fall 2016. 160 154.1 M&I 142.8 Ounces of Silver and Silver Eq.* (Millions)1,2 140 P&P Reserves 117.9 120 98.5 102.4 98.2 100 80 64.2 58.7 60 40 20 - 2010 2011 2012 2014 1 Excludes Lead and Z
Slide 18: GC Mine: Commercial Mining Underway
GC Mine: Commercial Mining Underway Shaft Mill Plant Concentrate Thickener 110KV Power Substation Dewatering Plant Concentrate Warehouse 17 17
Slide 19: GC Mine in Guangdong – Our Newest Mine
GC Mine in Guangdong – Our Newest Mine • Underground silver/zinc mine • Excellent infrastructure and access • Construction completed and permits obtained • Commercial production underway • Producing zinc-silver, lead-silver, and pyrite concentrates • Produced 0.15 million Oz Ag and 5.27 million lbs.
Slide 20: GC Mine: Commercial Production is Underway
GC Mine: Commercial Production is Underway • Sold 149,000 Oz Ag and 5.3 million lbs. Pb/Zn during Q1 FY2017. • Contributed $4.6 million in revenue. • Ongoing efforts being made to lower production costs and fine tune milling and mining operations. Flotation Mill Testing • FY2017 capital ex budget of
Slide 21: BYP Gold Mine – a non-core asset
BYP Gold Mine – a non-core asset Status: • suspended mining operations in August 2014 • Currently the Company is evaluating to re-start the operation or other options. 500 tpd Mill at the BYP Mine 20 20
Slide 22: FY2017 Production Guidance
FY2017 Production Guidance Project Ying Mining District GC Mine Grand Total Ore processed (tonnes) 610,000 250,000 860,000 Head Grades Silver (gram per tonne) 260 109 Lead (%) 4.1 1.3 Zinc (%) 0.8 3.0 Metal Production Silver ('000 ounces) 4.6 0.5 5.1 Lead (million pounds) 50.7 6.3 57.0 Zinc (million
Slide 23: Silver Production – Over 46 Million Ounces to Date
Silver Production – Over 46 Million Ounces to Date 6.0 AgEq Production – Actual and Forecast1,2 M 5.1 5.1E i 5.0 GC Ying Mining 5.0 0.5 0.5 l 0.6 l District i o 4.0 n s 3.0 5.8 o 5.5 f 5.2 4.7 4.6 4.6 O 4.3 4.4 2.0 4.1 3.9 u n c e 1.0 1.9 s - 1. Gold converted to silver at a rate of 50:1; Silvercorp
Slide 24: FY2017 Capital Expenditure Guidance
FY2017 Capital Expenditure Guidance Facilities/ Mine Development* Land Usage/ Drilling/Tunnelling Total Equipment** Exploration*** US$ Mines/ million Projects Cost Work Cost Cost Drilling ($million) (meters) ($million) ($million) (meters) Ying Mining District 2.1 6,743 13.5 14.6 48,375 30.2 GC Mine
Slide 25: Recent Achievements
Recent Achievements • Focus on improved monitoring resulting in continuous operating improvements • Strengthened management with new mine managers, & return of Silvercorp’s founder, Rui Feng as CEO • Addressed and improved relationships with contractors • Head grade improvements achieved thru diluti
Slide 26: Investment Highlights
Investment Highlights • Strong Financial Position - $73.4 million cash on hand. No LT. debt • Low cost silver producer in a mining friendly jurisdiction • Long life silver asset with a track record of resource growth • Generated $20.2 million in cash flow from operations in Q1 FY2017 despite lower s
Slide 27: Appendices
Appendices 26 26
Slide 28: Appendix I: Ownership and Coverage
Appendix I: Ownership and Coverage Top 10 Institutional Investors – Analyst Coverage % O/S Firms and Funds 1 Van Eck Associates Corporation 10.34 Chris Thompson Raymond James 2 Rafferty Asset Management LLC 4.15 3 Global X Management Company 1.38 LLC 4 Esposito Partners, LLC 0.95 5 Norges Bank Inves
Slide 29: Appendix II: Management & Board
Appendix II: Management & Board Management Board of Directors Rui Feng, Ph.D., Geology Rui Feng Malcolm Swallow Chairman and CEO, Director Yikang Liu Paul Simpson Derek Liu, CGA, CPA Chief Financial Officer David Kong Luke Liu, M. Eng. PhD (Mining Eng.) Vice President China Operations Lorne Waldman,
Slide 30: Appendix III: Summary of Silver Reserves
Appendix III: Summary of Silver Reserves1,2,3,4 Tonnes Head Grades Contained Metal Reserves Reserve Project (Million) Category Ag (g/t) Pb (%) Zn (%) Ag (Moz) Pb (t) Zn (t) Proven 5.24 207 3.56 1.34 34.81 186,700 70,200 Ying Mining District Probable 7.40 200 2.62 0.77 47.71 193,700 57,000 Proven 0.4
Slide 31: Appendix IV: Summary of Silver Resources
Appendix IV: Summary of Silver Resources1,2,3,4 Tonnes Contained Metal Resources Reserve Head Grades Project (Million) (Inclusive of Reserves) Category Ag (g/t) Pb (%) Zn (%) Ag (Moz) Pb (t) Zn (t) Measured 5.56 253 4.53 1.67 45.81 253,400 94,600 Ying Mining Indicated 8.45 226 3.05 0.92 61.49 258,80
Slide 32: Appendix V: BYP Mine Resource
Appendix V: BYP Mine Resource Mineral Resources for Gold Zones as of December 31, 2011: Contained Metal Cut-off Resource Grades CLASS Resources Grades (g/t) (tonne) Au (g/t) Au (oz) Indicated 1.0 3,510,000 2.59 292,000 Inferred 1.0 2,470,000 1.84 146,000 Mineral Resources for Lead and Zinc Zones as
Slide 33: Key Growth Catalysts
Key Growth Catalysts Ying Mining District : • More efficient and lower cost mining • Reduced management overhead and greater incentives • Longer term opportunity to increase mining capacity to match milling capacity • Further near district acquisitions GC Project: • Commercial production underwa
Slide 34: Endnotes and Cautionary Statements
Endnotes and Cautionary Statements Luke Liu, M. Eng. PhD Vice President China Operations is the 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
Slide 35: Contact Information
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: investor@silvercorp.ca Website: www.silvercorp.ca Silvercorp’s disclosure documents are available from the System for Electronic Doc
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