NYSE MKT: SVM. The Premier Silver Producer in China. Corporate Presentation

Transcription

1 NYSE MKT: SVM The Premier Silver Producer in China Corporate Presentation May 10,

2 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 Litigation Reform Act of Such forward-looking statements, including but not limited to those with respect to the price of silver, lead and zinc, the possibility, timing and amount of estimated future production, costs of production, reserve determination and reserve conversion rates involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of Silvercorp to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks related to international operations, risks related to Chinese government issuance of mining and related development permits, risks related to joint venture operations, the actual results of current exploration activities, conclusions of economic evaluations, changes in project parameters as plans continue to be refined, future prices of silver, lead and zinc, as well as other Risk Factors. Although Silvercorp has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The shares of Silvercorp Metals Inc. trade on the Toronto Stock Exchange (TSX: SVM). The TSX has not approved or disapproved the form or content of this presentation. Cautionary Note To U.S. Investors Concerning Estimates Of Measured, Indicated And Inferred Resources This presentation uses the terms Measured, Indicated and Inferred Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize them. Inferred Resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Resources may not form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that all or any part of Measured or Indicated Resources will ever be converted into reserves. U.S. investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. 1 1

3 China s Largest Primary Silver Producer Ying Mining District, Henan Province FY2017: 4.6Moz Silver* (9 months actual: 4.7Moz Silver)** FY2017: 56Mlbs Pb/Zn* (9 months actual: 54.7Mlbs Pb/Zn)** XHP Project Henan Province BYP Mine, Hunan Province (On Care and Maintenance) China Reserves & Resources 1,2,3 Silver (Moz) Lead (Kt) Zinc (Kt) Proven & Probable Reserves GC Project, Guangdong Province FY2017: 0.5Moz Silver* (9 months actual: 0.5Moz Silver)** FY2017: 20.3Mlb Pb/Zn* (9 months actual: 18.2Mlbs Pb/Zn)** Measured & Indicated Resources Inferred Resources Feb Excludes BYP Gold Mine Resource. See appendix III-V for breakout. 2 Inclusive of Reserves 3 Excludes Gold Equivalent * FY2017 Production Guidance ** FY Months Actual production 2 2

4 Strong Balance Sheet 9 Months Ended December 31, 2016 (millions US$) 9 Months Ended December 31, 2015 (millions US$) Revenue $129.4 $88.5 Gross Profit $70.3 $29.8 Net Income $30.2 $7.9 Cash Flow from Operations $75.6 $27.5 Cash, equivalents & short-term investments: $97.4 Million, up $5.3 million from last quarter. Reinstatement of dividend $0.02/year No Receivables (Smelters pay for concentrate in advance) No Long-term Debt 3 3

5 Lowest cost Highest margin Silver Producer - Fiscal 2017 Nine Months Results Low cost producer of silver - cash cost of negative $2.88** per Ag ounce for 9 months of FY2017* 9 Months of FY2017 Sales Mix by Metal * Nine months ended Dec. 31, 2016 * Peers- Nine months ended Sept ** Net of by-product credits. AISCC of $3.96 per Oz 4 4

6 Lowest All in Sustaining Costs 2016 Three Quarters* 2016 Last Quarter * SVM Three Quarters ended Dec. 31, 2016 * Peers- Three Quarters ended Sept

7 Improving Head Grades 6 6

8 Millions US$ Change of Share Outstanding Comparing with Change of Net Earning Change of Shares Outstanding Change of Net Earning Silvercorp s numbers are Fiscal numbers, starting FY

9 Consolidated net profit per tonne US$ 8 8

10 Enterprise Blog: A Productivity Tool: Reduces Dilution & Improves Safety Improvement in the head grades of metals can be attributed in part to an internal Enterprise Blog (EB) system in the management of Mine Production and Safety Information. EB system is an internet social media system that makes the collection, distribution and flow of the work related knowledge and information easy and transparent for parties at different locations. Each of the mining stopes, development faces, or equipment is assigned a blog name. Daily onsite inspection results of different workplaces listed in check list tables contain structured data with supporting photos which are posted on different blogs. Different levels of the management team can access to the daily blogs for each workplace instantly once posted. Records of a management person s access to the blogs will make related parties accountable. 9 9

11 Enterprise Blog: A Productivity Tool: Reduces Dilution & Improves Safety This supporting photo posted by frontline technicians shows an inspected stope with clearly marked ore boundaries and drill hole locations. This supporting photo posted by an onsite technician clearly shows the CO reading for the stope is less that 24 ppm as required by the government

12 Enterprise Blog: A Productivity Tool: Reduces Dilution & Controls Costs Benefits of the Enterprise Blog Information collection, distribution, retrieval, and site monitoring becomes instantly transparent. Information and data from frontline technicians or engineers freely flows throughout layers of the management structure. Structured data format provides statistics for key management info. Management has the directive, pressure, and tools to make prompt and more accurate decisions. The system will also record if a management person has accessed the blog to read or comment. Collaboration becomes easy, KPI assessments are fair and timely, and each person is accountable for his work

13 Ying Mining District: Silvercorp s Flagship Asset Flagship Ying District consists of underground mines (SGX, TLP, LM, and HPG) over 200 veins identified 68.74km 2 land package Extensive underground drilling has increased mine life to 20 years Has produced over 48.2 million Oz silver plus >700 million lbs of Lead+Zinc since 2006 Two centralized mills with 3,200 t/d capacity Producing silver-lead and zinc concentrates 6 smelters within 200km of the district Opportunity for further acquisitions in local area 12 12

14 GC Mine in Guangdong Our Newest Mine Initial production start 2014 Underground silver/zinc mine Excellent infrastructure and access Profitable operations Main Access Ramp 13 13

15 BYP Gold Mine a non-core asset Status: Suspended mining operations in August 2014 Currently it working to re-start the operation or other strategic options. 500 tpd Mill at the BYP Mine 14 14

16 Silver Production 50 Million Ounces to Date 7.0 GC Ag Production Actual and Forecast 1 6.1E M i l l i o n s Ying Mining District o f O u n c e s FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017E 1. FY2017E: actual production for the first nine months + guidance figures for the remaining three months

17 Lead+Zinc Production Over 736 Million Pounds to Date 1. FY2017E: actual production for the first nine months + guidance figures for the remaining three months

18 Ounces of Silver and Silver Eq.* (Millions) Growth of Remaining Reserves & Resources 200 Reserves & Resources: FY FY2017 1,2 (not including 50Moz Ag production ) M&I P&P Reserves Excludes Lead and Zinc. Gold was converted to Silver equivalent at a rate of 65:1. 2 Measured & Indicated Resources Inclusive of Reserves. See Appendix III, IV and V for breakout of Measured, Indicated and Inferred, Proven and Probable categories

19 FY2017 Production Guidance (current fiscal year ending Mar 31, 2017) Project FY2017 Production Guidance + 9 Month Actual Ying Mining District GC Mine Guidance 9 Months Actual Guidance 9 Months Actual Ore processed (tonnes) 610, , , ,767 Silver (gram per tonne) 260 Head Grades Lead (%) Zinc (%) Metal Production Silver (million ounces) Lead (million pounds) Zinc (million pounds) * The first 9 months has already surpassed the annual guidance by 2% for Silver 18 18

20 FY Production Guidance FY2018 Production Guidance Project Ying Mining District GC Mine Grand Total FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 Ore processed (tonnes) 610, , , , , ,000 Head Grades Silver (gram per tonne) Lead (%) Zinc (%) Metal Production Silver (million ounces) Lead (million pounds) Zinc (million pounds)

21 FY Capital Expenditure Guidance (current fiscal year ending Mar. 31, 2017)* Mines/ Projects Mine Development and Tunneling** Amount (US$million) work (meters) Facilities/ Land Usage/ Equipment*** Amount (US$million) Total US$million FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 Ying Mining District ,000 66, GC Mine , Total Budget ,100 66, * Includes sustaining capital ** For FY2018, total tunneling at Ying Mining District is budgeted at 83,000 meters, of which 66,000 meters will be capitalized and 17,000 meters will be expensed. Total tunneling at GC mine is budgeted at 10,000 meters, of which 300 meters will be capitalized and 9,700 meters will be expensed. *** For FY2018, total drilling at Ying Mining District and GC mine is budgeted at 76,000 meters and 17,000 meters. All of the drilling will be expensed. FY 2018 guidance as of Feb. 2,

22 Appendices 21 21

23 Appendix I: Ownership and Coverage Top 10 Institutional Investors % O/S 1 Van Eck Associates Corporation Rafferty Asset Management LLC Global X Management Company LLC AMG Fondsverwaltung AG Old Mutual Global Investors (UK) Norges Bank Investment Management (NBIM) ETF Managers Group, LLC 0.67 Chris Thompson Retail 65.1% Analyst Coverage Raymond James Institutional 32.3% 8 Renaissance Technologies LLC Stabilitas GmbH Esposito Partners, LLC 0.54 Insiders 2.7% Source: Thomson One March 2017 Data 22 22

24 Appendix II: Management & Board Management Rui Feng, Ph.D., Geology Chairman and CEO, Director Derek Liu, CGA, CPA Chief Financial Officer Luke Liu, M. Eng. PhD (Mining Eng.) Vice President China Operations Lorne Waldman, MBA, LL.B. Senior Vice President Alex Zhang, M. Eng., M.Sci., P. Geo. Vice President, Exploration Gordon Neal, Vice President, Corporate Development Rui Feng Yikang Liu David Kong Board of Directors Malcolm Swallow Paul Simpson 23 23

25 Appendix III: Summary of Silver Reserves 1 Project Reserve Category Tonnes (Million) Head Grades Contained Metal Reserves Ag (g/t) Pb (%) Zn (%) Ag (Moz) Pb (t) Zn (t) Ying Mining District GC Project Proven ,950 72,240 Probable ,010 83,450 Proven ,200 14,800 Probable , ,500 Proven ,150 87,040 Consolidated Probable , ,950 Total , , Table excludes HPG mine Proven reserves of 16,430 oz Au (470,000 tonnes grading 1.10 g/t Au) and HPG mine Probable reserves of 10,840 oz Au (290,000 tonnes grading 1.15 g/t Au) 24 24

26 Appendix IV: Summary of Silver Resources 1 Project Ying Mining District GC Project Consolidated Reserve Category Tonnes (Million) Head Grades Contained Metal Reserves (Inclusive of Reserves) Ag (g/t) Pb (%) Zn (%) Ag (Moz) Pb (t) Zn (t) Measured ,600 96,690 Indicated , ,660 Inferred , ,220 Measured ,400 19,800 Indicated , ,500 Inferred , ,900 Measured , ,490 Indicated , ,160 Inferred , , Table excludes HPG mine Measured resources of 24,000 oz Au (690,000 tonnes grading 1.10 g/t Au), Indicated resources of 22,000 oz Au (630,000 tonnes grading 1.10 g/t Au), Inferred resources of 39,000 oz Au (1,010,000 tonnes grading 1.21 g/t Au). Table also excludes BYP Au-Pb-Zn project resources (BYP resources summarized on Slide 28)

27 Appendix V: BYP Mine Resource Mineral Resources for Gold Zones as of December 31, 2011: CLASS Cut-off Grades (g/t) Resource Grades Contained Metal Resources (tonne) Au (g/t) Au (oz) Indicated 1.0 3,510, ,000 Inferred 1.0 2,470, ,000 Mineral Resources for Lead and Zinc Zones as of December 31, 2011: CLASS Cut-off Grades (g/t) Resource Grades Contained Metal Resources (tonne) Pb(%) Zn(%) Pb (Tonnes) Zn (Tonnes) Indicated 2.0 Pb+Zn 7,330, , ,700 Inferred 2.0 Pb+Zn 7,550, , ,600 Notes to Resource Tables: 1. CIM definitions apply 2. Mined tonnages deducted 3. Resources are rounded to nearest 10,000 tonnes 4. Cut-off grades are based on mining, processing and G & A costs of $38/t 5. Technical report filed on August 16, 2012 at

28 Key Growth Catalysts Ying Mining District : GC Project: 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 Commercial production underway Fine tuning operations to improve efficiencies and lower costs Continue exploration to expand resources Growth: Grow existing assets organically through land expansion and drilling Acquire under-explored, smaller-scale mining projects, ideally in Asia, with resource growth potential BYP 27 27

29 Endnotes and Cautionary Statements Alex Zhang, P. Geo., Vice President of Exploration, is the Qualified Person within the meaning of National Instrument Standards Of Disclosure for Mineral Projects ( NI ) who supervised the preparation of the scientific and technical information of Silvercorp included in this presentation. For more information on Silvercorp s projects, readers should refer to Silvercorp s Annual Information Form, dated June 16, 2016, and its technical reports, each of which is available on SEDAR at The scientific and technical information related to Silvercorp s projects included in this investor presentation are derived from the technical reports entitled: - NI Technical Report for Ying Gold-Silver-Lead-Zinc Property, Henan Province, China, prepared July 29, 2014 by P R Stephenson, P. Geo., H A Smith, P.Eng., A Riles, MAIG, M Molavi, P.Eng - NI Technical Report on the BYP Gold-Lead-Zinc Property, Hunan Province, China, dated June 30, 2012, prepared by P R Stephenson, P. Geo., H A Smith, P.Eng., A Riles, MAIG, M Molavi, P.Eng, D. Nussipakynova, P.Geo., A. Ross, P.Geo. - NI Technical Report on the GC Ag-Zn-Pb Project in Guangdong Province, People s Republic of China, dated January 23, 2012, prepared by Brian O Connor, P. Geo, Peter Mokos, MAusIMM (CP), Alan Riles, MAIG, Owen Watson, MAusIMM (CP), Mo Molavi, P. Eng, Patrick Stephenson, P. Geo, AMC Mining Consultants (Canada) Ltd

30 Contact Information Head Office Suite # Granville St., Vancouver, BC, Canada V6C 1S4 Tel: Fax: Toll-Free: Website: Silvercorp s disclosure documents are available from the System for Electronic Document Analysis and Retrieval (SEDAR) at