Corporate Presentation San Francisco Hard Assets November 2012 - PowerPoint PPT Presentation

Corporate Presentation San Francisco Hard Assets November 2012

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 Securities Litigation Reform Act of 1995. 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 New York Stock Exchange (NYSE:SVM) and the Toronto Stock Exchange (TSX: SVM). Neither the NYSE nor the TSX have 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

About Us – Strategically Focused in China Silver Lead Zinc Reserves & Resources 1 (MOz) (Mt) (Mt) Ying Mining District, Proven & Probable 97.4 458.5 277.4 Reserves Henan Province Measured & Indicated FY2013:~5.3Moz Ag 150.8 717.6 558.4 Resources Inferred Resources 95.9 401.9 464.1 China X Mine Projects, Henan Province Silvertip Project, FY2013: ~50Koz Ag British Columbia Canada BYP Project, Hunan Province FY2013:~4.7Koz Au GC Project, Guangdong Province FY2013:~170Koz Ag 1 Excludes BYP Mine Resource 2 2

Silvercorp’s Strategy Our Strategy • Acquire under-explored small-scale mining projects with resource potential • Self-fund the growth of those assets Proven Execution • Successfully acquired and developed projects • Less than $300 million in acquisition and development costs to date • Built 800,000 t/y mining + milling capacity at Ying Mining District and completing 500,000 t/y mine and mill at GC Project (expected to commence production in January 2013). • Consolidated Mine Life of > 10 Years 3 3

Corporate Snapshot Fiscal Year 2013 Q2 – 3 mos Fiscal Year 2013 Q2 – 6 mos (millions) (millions) Revenue US$45.2 US$89.8 Net Income US $9.5 US$15.6 Operating Cash Flow US$23.9 US$43.2 Cash 1 : US$136.5 Million F2013E 2 Silver Production: 5.52 million ounces F2013E 2 Gold Production: 8,300 ounces F2013E 2 Lead & Zinc Production: 85.7 million pounds Dividend: CAD$0.10 per annum ($0.025/quarter) No LT Debt; Unhedged 1 As at September 30, 2012 2 Silvercorp’s Fiscal Year ends March 31 st 4 4

A Track Record of Performance $237,962 Net Metal Sales $167,327 $108,363 $107,164 $83,523 $39,777 Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010 Fiscal 2011 Fiscal 2012 $57.94 Cash Margin per Ounce of Silver* $51.77 $33.69 $24.88 $19.98 $8.58 Fiscal 2007 Fiscal 2008 Fiscal 2009 Fiscal 2010 Fiscal 2011 Fiscal 2012 *Cash margin = Revenue (net of smelting charges) less cash portion of Cost of Sales 5 5

FQ2 Results Q2FY2013 Sales Mix by Metal  Low cost producer of silver - for Gold, 6% Lead, 24% the period ended September 30, 2012 cash cost of -$0.74 Silver, per Ag ounce 65% Zinc, 5% Gross Profit Margin* 80% 64% 56% 46% 39% 40% 22% 0% Silvercorp First Hecla Endeavour Silver Majestic Silver Standard * Quarter-ended September 30, 2012. 6 6

Consolidation of the Ying Mining District: Next Steps for Growth  Extensive development work (~110,000 m underground tunnels for fiscal 2013) to increase mining capacity from current 2000 t/d to match milling capacity of 3200 t/d (or 1.15 million t/year) in 2 years.  Extensive underground drilling (144,000 metres) to maintain mine life at ~10 years at expanded mining rate (for the last 6 years; mine life was maintained at 10 year every year).  New processing strategy to increase efficiency: centralized processing with ore blended from each mine within the District 7 7

Ying Mining District: LM & LM West – Increasing Production No.1 – 1,000 tpd Mill No. 2 – 2,200 tpd Mill • Increase the combined production capacity of the LM and LM West to 300,000 tonnes of ore per year by 2014: • LM West – developing Shaft 969 • LM West - 4,800 metre access ramp down to the 500 metre elevation at LM West in 2014 • LM – shaft in operation and tunnel development has commenced at 5 mining levels 8 8

Ying Mining District: LM & LM West 9 9

Ying Mining District: More Efficient Mining June 2012 NI 43-101 Technical Report reduced cutoff grade to 150 g/t Ag. This has enabled o us to increase mining width from ~0.5 metres to ~1.2 metres: • Lower mining cost per tonne with more ore per stope • Less tunneling required: lower development cost per stope and less pressure on mine management Current Future Resuing Method Shrinkage Method Mining Method Focus (stope width <0.7m) (stope width 0.8m ~ 3m) 40% Shrinkage 80% Shrinkage Mining Method Allocation 60% Resuing 20% Resuing Tunnel Dimensions Required Per Stope 50m x 50m x 0.5m 50m x 50m x 1.2m Ore per Stope 3,750 tonne 7,500 tonne Metres of Development Required per 1,000 metres 500 metres 10,000 Tonnes of Ore SGX Mine: 300g/t AgEq SGX Mine: 150g/t AgEq Cut-off Grade Satellite Mines: 150g/t AgEq Satellite Mines: 110g/t AgEq 10 10

11 11 Ying Mining District: More Efficient Exploration

GC Project: Progressing towards production • FY2013 mine and mill development budget: $30.3MM • Continued construction of 1,600 t/d (or 500,000 t/year) mill (Expected completion: Q4 2012) • Continued mine development to support 500,000 tonnes per annum: Office & Dormitory • 2,200 metres main access ramp down to 220 metres depth (65% completed) • 4,600 metres second ramp down to 600 metres depth (17% completed) • 618 metres vertical shaft (6 metre diameter) completed to 376 metres depth by June. • Expect to declare production in early 2013 and currently expect 12 year mine life with IRR of 33% Advancing Stage 1 Ramp 12 12

GC Project: Progressing towards production Temporary Shaft for Sinking the Main Shaft Mill Plant Concentrate Thickener Main Ramp Access 13 13

GC Project: Continuing exploration GC Cross Section on Line 24  While constructing the mine and mill at GC, exploration to further define and potentially expand resources continues.  FY2013 drilling plan: 26,400 metres ($1.9millions).  Continue exploration success- recent drilling has discovered new high grade silver veins, such as 1,684 g/t Ag over 2.12 m and 609 g/t Ag over 3.88 metres. 14 14

Near-term Organic Growth AgEq Production – Actual and Forecast 1,2 10.2E 9.7E 10.0 0.9 0.9 Others (BYP/X-Mines*) 1.4 1.5 8.0 GC Ying Mining District Million Ounces 6.1 5.9E 6.0 5.5 0.3 0.3 0.2 4.7 4.3 4.1 4.0 7.9 7.3 5.8 5.5 5.5 1.9 4.7 4.3 2.0 4.1 1.9 0.0 FY2007A FY2008A FY2009A FY2010A FY2011A FY2012A FY2013E FY2014E FY2015E 1 Gold converted to silver at a rate of 50:1; 2 Silvercorp’s fiscal year ends March 31 st * Development ores only 15 15