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A New Company Built For GrowthAUGUST 2012TSX:USA
Forward Looking Statement – Safe Harbour
Certain information in this presentation may contain forward-looking statements. This information is based on current expectations that are subject to significant risks, assumptions and uncertainties that are difficult to predict and the risk that regulatory approvals may not be obtained or that conditions of closing will not be satisfied or waved within the timeframe contemplated. Additional potential risks include: that U.S. Silver & Gold may not achieve anticipated synergies; loss of key personnel; reduction in the anticipated cash levels; and, not achieving production goals stated. Actual results might differ materially from results suggested in any forward-looking statements. All statements, other than statements of historical fact, included in the presentation, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of U.S. Silver & Gold, are forward-looking statements. Words such as “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “intend”, “believe” and other similar expressions are forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather reflect our current views with respect to future events and are subject to risks, uncertainties, assumptions and other factors, and actual results and future events could differ materially from those anticipated in such statements. There can be no assurance that such forward-looking statements will prove to be accurate. U.S. Silver & Gold assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the U.S. Silver & Gold. Additional information identifying risks and uncertainties is contained in filings by U.S. Silver & Gold with the Canadian securities regulators, which filings are available at www.sedar.com.
An additional Cautionary Note to Investors – In the event that we use certain terms in this presentation, such as “resource”, “measured resource”, “indicated resource” and “inferred resource”. U.S .investors are cautioned that, while such terms are recognized and required by Canadian Securities Laws, the United States Securities and Exchange Commission does not recognize them. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination has been made. U.S. investors should not assume that all or any part of measured or indicated resources will ever be converted into reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Accordingly, information concerning descriptions of mineralization in this presentation may not be comparable to information made public by companies that are subject to the SEC’s Industry Guide 7.
Mr. Jim Atkinson, Vice President, Exploration and a Qualified Person under Canadian Securities Administrators guidelines has approved the applicable contents of this presentation.
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USA – Today
5M oz Ag by 2014
2.7Moz Ag
Established Operating Assets
Strong Operating Cash Flow
Focused on Organic and Brownfield Expansion
Dominant Land Position in the Silver Valley
Favourable Environment for Accretive Acquisitions
Proven Management & Board
25,000oz Au
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Darren BlasuttiPresident and CEO, Director
• Former SVP Corporate Development and Investor Relations for Barrick Gold, reported to President and CEO• Led Barrick's strategic development for over 13 years executing over 25 gold mining transactions including Sutton Resources,
Homestake Mining, Placer Dome, consolidation of the Cortez property from Rio Tinto. Responsible for creation of Barrick Energyto hedge Barrick’s exposure to energy prices
Robert TaylorCOO
• Over 35 years of experience in operations, management, engineering, and exploration for underground and open-pit mines • Most recently VP and President North American Operations for Kinross Gold where he was responsible for all operations
and exploration• Former VP, Mine Operations at Stillwater Mining in Montana
Warren VargaCFO
• Over 15 years of progressive financial leadership experience and brings extensive senior management expertise • Most recently Senior Director, Corporate Development at Barrick Gold Corporation• Member of the Canadian Institute of Chartered Accountants and a member of the Chartered Financial Analyst Institute
Steve LongSVP, Operations
• Over 33 years experience in mine engineering and management• Senior manager for underground mining operations for Newmont Mining Corporation, Barrick Gold, Echo Bay and
Homestake Mining
Jim AtkinsonVP, Exploration
• Licensed Professional Geologist, over 40 years of experience in exploration geology• Completed more than a dozen exploration programs across North America
Peter McRaeVP, General Counsel
• Most recently at Weil, Gotshal & Manges LLP, a major international law firm based in NY • Focused on private equity funds, public and private companies acquisitions and divestitures
Management Team Overview
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Board of Directors Overview
Gordon PridhamChairman
• Over 30 years of experience as a global finance executive• Extensive special committee and public board experience with a track record of creating value for shareholders• Serves on the public company boards of Newalta Corporation and Titanium Corporation, where he is Chairman of the Board
Lorie WaisbergDirector
• Former Senior Partner at Goodmans LLP, and EVP of Finance and Administration of Co-Steel Inc.• Accredited with Institute of Corporate Directors and sits on Boards of Tembec and Chemtrade Logistics Inc
Hugh AgroDirector
• Former EVP Strategic Development at Kinross Gold, where he oversaw corporate development and exploration until hisretirement in 2009
• Held senior positions with Placer Dome Canada and Deustche Bank
John BrockDirector
• Geologist with over 40 years experience as an executive for 20 public, junior exploration companies• Participated in 12 major mineral deposit discoveries in north and western Canada, Nevada, Mexico, and Ecuador• Currently CEO of Pacific Ridge Exploration and an advisor to the Manex Resources Group
Alex DavidsonDirector
• Retired in 2009 as EVP Exploration and Corporate Development at Barrick Gold • 2005 AO Dufresue Award to recognize exceptional achievement and distinguished contribution to mining exploration in Canada• In 2003 was named Prospector of the Year by PDAC for discovery of Alto Chicama in Peru
Louis DionneDirector
• Former Senior Vice President Underground Operations at Barrick Gold • Currently a director of Detour Gold Corporation and Aurizon Mining Ltd.
Alan EdwardsDirector
• Board of directors for AuRico Gold Inc., Entrée Gold Inc., Copper One Inc., Oracle Mining Corp. and AQM Copper Inc. (Chairman)• Senior management positions with Frontera Copper, Apex Silver Mines, Kinross, Cyprus Amax and Phelps Dodge
Tom RyleyDirector
• Board of directors for Newalta Corporation, Tribute Resources and Benefuel Inc., where he is Chairman of the Board• Former Executive Vice President of Suncor Energy, where he worked for 25 years in a variety of roles
Darren BlasuttiDirector
• President and CEO 5
Asset Overview
Asset Overview
7Geographic Concentration Of Assets
Galena Mine Complex – 100%•High grade Cu-Ag and Pb-Ag
•Galena operating mine
•Coeur mine under re-development with initial production in Q4 2012
•Caladay Lead Zone provides significant brownfield expansion opportunity
•Excess hoisting and milling capacity
Drumlummon Mine – 100%•High grade Au and AgExtensive infrastructure
•Recently acquired adjacent Belmont mine
•Focus on resource expansion
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Galena Mine Complex
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Galena Mine
•Over 200 M ounces of Au produced to date
•Reserves - 23.2 M oz Ag @ 14.30 oz/t
•M&I Resources - 11.9 M oz Ag @ 13.7 oz/t
• First half 2012 production - 1.08 M oz Ag @ $20.20/ounce from 25 production stopes
•Two operating mills Galena and Coeur
•1,400 tons/day capacity currently at 65%
•Consistent mill recovery rates of 96% for silver-copper and 92% for silver-lead ores
•Continued exploration success and mine life extension on 2400, 4300 and 5200 levels
•1,434 oz/t silver over 1.6’ and 112.1 oz/t silver over 2.8’ extending silver vein down dip
•110 oz/t silver extension of 350 vein
•Resource development in lead zone at 4900 level
•Continue to increase reserves and extend mine life
Large Reserve and Resource
2ndlargestPrimary silver producer in the U.S.
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Galena Mine Complex
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500,000oz Ag Targeted production
Initial Production Q4 2012
Coeur Mine•Historical production of 39 million ounces of Au
•3.3 million oz of M&I Ag resources at average grades of16.6 oz/t Ag and 0.72% Cu
•Targeting 6.0 M oz Ag Resource from 2012 and 2013 drill program
•Drilling commenced; 2,500 feet of 17,000 foot program completed
•Re-development started February 2012
•Estimated development costs of $5 million
•First production expected in Q4, 2012 with full production estimate of 500,000 oz Ag per year by end of 2013
•Increased production
•Will reduce fixed cost base immediately
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Galena Mine Complex
Bulk Mining Opportunity
Caladay Lead Zone
•Initial joint venture between Callahan Mining, ASARCO and Day Mines sank a 5,100 foot shaft in the 1960’s
•Drilling in the 1980’s by Coeur d’Alene Mines located a silver-lead deposit
•Re-habilitation completed and drilling commenced in the 3rd quarter
•Appears to contain a mineable resource between the 4900 and 5500levels, readily accessible from existing workings
•Mineralization comprises broad areas of Au and Pb mineralization often associated with high grade veins
•Zones appear much wider (up to 25 to 30 feet) with grades in the range of 7 to 9 oz Ag and 7% to 10% Pb
•Area supports lower cost bulk mining methods
•Update expected by year-end on economic potential of mineralized area
Significant Brownfield Expansion
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Galena Mine Complex Exploration Upside
CDA “GAP”
Western Coeur Mine
ArgentineVein
DeepCoeur Mine
DeepSilverVein
Calady MineLead-Silver
Exploration budget of 93,700 feet has been approved for 201211
Drumlummon Mine
12Potential synergies through excess milling capacity at Galena
Historical production of 1 million ounces of gold and 12 million ounces of silver
All required permits in place under small miners exemption
2012 Plan estimates 110,000 tons of ore at 0.25/t Au and 4 oz/t Ag
First half 2012 production of 12,100 oz Au and 216,200 oz Ag
First half 2012 mill recoveries averaged 91% for Au and 84% for Ag
Continued resource expansion and mine life extension success at Drumlummon and the recently acquired Belmont mine
•$5.5 million exploration budget approved for 2012
•106,000 feet of drilling to date
•Exploration success at the Frankie Vein, Sampson area of the Drumlummon Vein and the New Years Vein, discovered in the foot wall of the Charly Vein
•Discovery of high grade silver veins in the Neenan area near Bald Butte moly project
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Drumlummon Mine – Underground Long Section
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DDH12-567 : 0.973 oz/t Au over 4’
1.116 oz/t Au over 1’
DDH12-569 : 0.416 oz/t Au over 2’
0.319 oz/t Au over 14’
DDH12-601 : 0.504 oz/t Au over 6’
Resource Expansion and Mine Life Extension Success13
Drumlummon Mine – Claims and Property Boundaries
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Near Term Operating Goals
15Unlocking value of existing operating assets
5.0Moz Ag by 2014
Maximize operating synergies of ~$6-7 million and corporate synergies of ~$3-4 million per year
Deliver Coeur re-development on-time and on-budget in Q4, 2012
Prepare preliminary analysis of the Caladay lead/silver zone for future bulk mining development
Assess the Belmont property for mid to late 2013 development
Build and communicate to the investment community the 1-year, 3-year and Life of Mine operating plan
USA -Tomorrow
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Pro-Forma U.S. Silver & Gold
Symbol/Exchange USA-T
Market Cap (CDN$ MM) – close August 21, 2012 123.0
Shares Basic (MM) 59.4
ITM Options & Warrants (MM) 8.5
OTM Options & Warrants (MM) 3.5
Shares FD ITM (MM) 67.9
Cash (US$ MM)* $ 21.1
Working Capital (US$ MM)* $ 33.0
Debt (US$ MM)* $ 8.2
First half Production oz (Ag) 1,295,300
First half cash costs per oz (Ag) $ 20.36
First half Production oz (Au) 12,100
Recoveries (Ag) 90.0%
Recoveries (Au) 91.0%
Capital Structure and Key Metrics
16* As at June 30, 2012
Strategic Objectives
Strategic Objectives
18Experience with more than 100 transactions
Exceed
5.0Moz Ag by 2014
Ensure an effective and efficient integration of the two organizations
Assess exploration, milling and capital synergies with geographically focused assets
Growth through exploration and accretive acquisitions in North America
Secure line of credit to support future growth initiatives
Increase visibility within the investment community
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3
4
5
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Average: $2.95
EV / M&I Resources
Legend: HL – Hecla Mining Co., EDR – Endeavour Silver Corp., SVM – Silvercorp Metals Inc., FVI – Fortuna Silver Mines Inc., SPM – Scorpio Mining Corp., RVM – Revett Minerals Inc
EV / 2013E EBITDA
Average: 3.37x
Junior Silver Producer Multiples
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Re-Rating Potential
$0
$300
$600
$900
$1,200
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
En
terp
rise
Va
lue
(US$
MM
)
2012 Production Guidance (MM oz Ag Eq.)
Mid-Tier Silver Producers
EDR
SVM
FVI
U.S. Silver & Gold
Companies Included: FVI – Fortuna Silver Mines Inc.; SVM – Silvercorp Metals Corp.; EDR – Endeavour Silver Corp.1Enterprise Value is calculated on a fully-diluted ITM basis2Silver equivalent based on Cormark research 2012 metal prices of US$1,800/oz Au, US$32.50/oz Ag, US$0.90/lb Pb, US$0.89/lb Zn and US$3.71/lb Cu3U.S. Silver & Gold production guidance is sum of RX Gold Q1 results annualized and latest U.S. Silver production guidance
Attractively Positioned Among Peers
U.S. Silver & Gold will be attractively positioned amongst its mid-tier silver producer peers and could potentially experience a s ignificant re-rating
Why USA?
We’re built for growth
2nd largest primary silver producer in the U.S.
Strong operating and market fundamentals
Executing on brownfield expansion opportunities
Large land package with significant exploration upside
Experienced management team
Disciplined strategy for targeted acquisitions
Catalysts in place for improved valuation
Focused on Execution21
