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Corporate PresentationMarch 27, 2017
The Premier Silver Producer in China
OTC: SVMLF
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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 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.
Forward Looking Statements
3
China’s Largest Primary Silver Producer
3
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)**
BYP Mine, Hunan Province
(On Care and Maintenance)
GC Project, Guangdong ProvinceFY2017: 0.5Moz Silver* (9 months actual: 0.5Moz Silver)**FY2017: 20.3Mlb Pb/Zn* (9 months actual: 18.2Mlbs Pb/Zn)**
China
XHP Project Henan Province
* FY2017 Production Guidance** FY2017 9 Months Actual production
1 Feb. 2017- Excludes BYP Gold Mine Resource. See appendix III-V for breakout.
2 Inclusive of Reserves 3 Excludes Gold Equivalent
Reserves & Resources1,2,3
Silver (Moz)
Lead (Kt)
Zinc (Kt)
Proven & Probable Reserves 113.5 523.1 296.0
Measured & Indicated Resources 158.3 731.5 449.7
Inferred Resources 108.7 521.9 327.1
4
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
Strong Balance Sheet
4
5
Lowest cost Highest margin Silver Producer - Fiscal 2017 Nine Months Results
5
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. 30 2016** Net of by-product credits. AISCC of $3.96 per Oz
66
Improving Head Grades
77
Consolidated net profit per tonne
88
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.
Enterprise Blog: A Productivity Tool: Reduces Dilution & Improves Safety
99
Enterprise Blog: A Productivity Tool: Reduces Dilution & Improves Safety
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.
This supporting photo posted by frontline technicians shows an inspected stope with clearly marked ore boundaries and drill hole locations.
1010
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.
Enterprise Blog: A Productivity Tool: Reduces Dilution & Controls Costs
11
Ying Mining District: Silvercorp’s Flagship Asset
Flagship Ying District consists of underground mines (SGX, TLP, LM, and HPG) –over 200 veins identified
68.74km2 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
11
1212
GC Mine in Guangdong – Our Newest Mine
Main Access Ramp
Initial production start 2014 Underground silver/zinc mine Excellent infrastructure and access Profitable operations
13
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
13
14
Silver Production – 50 Million Ounces to Date
1. FY2017E: actual production for the first nine months + guidance figures for the remaining three months.
14
FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017E -
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1.9
4.0 4.2 4.6 5.3 5.6
5.0 3.9
4.6 4.4
5.5
0.501 0.6
0.6
Ag Production – Actual and Forecast1GC
Ying Mining District
Millions of Ounces
5.05.1
6.1E
15
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.
15
16
Growth of Remaining Reserves & Resources
16
1 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 .
2005 2006 2007 2008 2009 2010 2011 2012 2014 2017 -
20
40
60
80
100
120
140
160
180
200
18.9
40.1
51.9
81.1
102.0 98.8
122.0
148.2159.4
180.5
64.459.0
98.5 102.8
115.3
Reserves & Resources: FY2005 - FY20171,2(not including 50Moz Ag production 2005-2016)
M&I P&P Reserves
Oun
ces o
f Silv
er a
nd S
ilver
Eq.
* (M
illio
ns)
1717
FY2017 Production Guidance (current fiscal year ending Mar 31, 2017)
* The first 9 months has already surpassed the annual guidance by 2% for Silver
Guidance 9 Months Actual Guidance 9 Months Actual
Ore processed (tonnes) 610,000 530,160 250,000 220,767
Silver (gram per tonne) 260 305 109 94
Lead (%) 4.1 4.7 1.3 1.5
Zinc (%) 0.8 1.0 3.0 2.9
Silver ('000 ounces) 4.6 4.7 0.5 0.5
Lead (million pounds) 50.7 49.9 6.3 6.2
Zinc (million pounds) 5.3 4.8 14.0 12.0
Head Grades
Metal Production
FY2017 Production Guidance + 9 Month Actual
ProjectYing Mining District GC Mine
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FY2017-2018 Production Guidance
FY2018 Production Guidance
ProjectYing Mining District GC Mine Grand Total
FY2017 FY2018 FY2017 FY2018 FY2017 FY2018
Ore processed (tonnes) 610,000 650,000 250,000 250,000 860,000 900,000
Head Grades
Silver (gram per tonne) 260 275 109 90 Lead (%) 4.1 4.2 1.3 1.5
Zinc (%) 0.8 0.9 3.0 2.6
Metal Production
Silver ('000 ounces) 4.6 5.3 0.5 0.4 5.1 5.7
Lead (million pounds) 50.7 56 6.3 7.1 57.0 63.1
Zinc (million pounds) 5.3 6 14.0 12.3 19.3 18.3
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* 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, 2017.
FY2017-2018 Capital Expenditure Guidance (current fiscal year ending Mar. 31, 2017)
Mines/ Projects
Mine Development and Tunneling*Facilities/ Land Usage/ Equipment**
Total US$million
Amount (US$million)
work (meters)
Amount (US$million)
FY2017 FY2018 FY2017 FY2018 FY2017 FY2018 FY2017 FY2018
Ying Mining District 16.7 17.5 55,000 66,000 13.5 4.0 30.2 21.5
GC Mine 0.5 0.5 1,100 300 0.5 0.5 1.0 1.0
Total Budget 17.2 18.0 56,100 66,300 14.0 4.5 31.2 22.5
2020
Appendices
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Top 10 Institutional Investors % O/S1 Van Eck Associates Corporation 16.672 Rafferty Asset Management LLC 7.293 Global X Management Company LLC 1.204 AMG Fondsverwaltung AG 0.845 Old Mutual Global Investors (UK) 0.776 Norges Bank Investment Management
(NBIM)0.73
7 ETF Managers Group, LLC 0.67
8 Renaissance Technologies LLC 0.65
9 Stabilitas GmbH 0.60
10 Esposito Partners, LLC 0.54
Analyst Coverage
Chris Thompson Raymond James
Source: Thomson One February 2017 Data
Appendix I: Ownership and Coverage
institutional 32.3%
Insiders2.7%
Retail65.1%
2222
Board of Directors
Rui Feng Malcolm Swallow
Yikang Liu Paul Simpson
David Kong
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
Appendix II: Management & Board
2323
Appendix III: Summary of Silver Reserves1
1. 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)
Project Reserve Category
Tonnes (Million)
Head Grades Contained Metal Reserves
Ag (g/t) Pb (%) Zn (%) Ag (Moz) Pb (t) Zn (t)
Ying Mining District
Proven 4.67 252 4.15 1.55 37.85 193,950 72,240
Probable 7.63 233 3.50 1.09 57.16 267,010 83,450
GC ProjectProven 0.46 199 1.12 3.18 3.00 5,200 14,800
Probable 4.29 113 1.33 2.93 15.50 56,900 125,500
Consolidated
Proven 5.13 40.85 199,150 87,040
Probable 11.92 72.66 323,910 208,950
Total 17.05 113.51 523,060 295,990
2424
1. 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).
Appendix IV: Summary of Silver Resources1
Project Reserve Category
Tonnes (Million)
Head Grades Contained Metal Reserves (Inclusive of Reserves)
Ag (g/t) Pb (%) Zn (%) Ag (Moz) Pb (t) Zn (t)
Ying Mining District
Measured 5.91 266 4.36 1.64 50.55 257,600 96,690
Indicated 10.40 233 3.59 1.13 77.76 373,000 117,660
Inferred 10.47 230 3.91 1.10 77.25 409,400 115,220
GC Project
Measured 0.59 230 1.41 3.33 4.40 8,400 19,800
Indicated 7.04 113 1.31 3.06 25.60 92,500 215,500
Inferred 7.96 123 1.41 2.66 31.40 112,500 211,900
Consolidated
Measured 6.50 54.95 266,000 116,490
Indicated 17.44 103.36 465,500 333,160
Inferred 18.43 108.65 521,900 327,120
2525
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 2.59 292,000
Inferred 1.0 2,470,000 1.84 146,000
Mineral Resources for Lead and Zinc Zones as of December 31, 2011:
CLASSCut-off Grades
(g/t)
Resource Grades Contained Metal Resources
(tonne) Pb(%) Zn(%) Pb (Tonnes) Zn (Tonnes)
Indicated 2.0 Pb+Zn 7,330,000 1.16 2.52 85,000 184,700
Inferred 2.0 Pb+Zn 7,550,000 0.85 2.75 64,200 207,600
Notes to Resource Tables:1. CIM definitions apply 2. Mined tonnages deducted3. Resources are rounded to nearest 10,000 tonnes 4. Cut-off grades are based on mining, processing and G & A costs of $38/t5. Technical report filed on August 16, 2012 at www.sedar.com
Appendix V: BYP Mine Resource
2626
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 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
2727
Alex Zhang, P. Geo., Vice President of Exploration, 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 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 www.sedar.com.
The scientific and technical information related to Silvercorp’s projects included in this investor presentation are derived from the technical reports entitled:- NI 43-101 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 43-101 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 43-101 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.
Endnotes and Cautionary Statements
2828
Suite #1378 - 200 Granville St., Vancouver, BC, Canada V6C 1S4Tel: 604-669-9397 | Fax: 604-669-9387 | Toll-Free: 1-888-224-1881 Email: [email protected] Website: www.silvercorp.ca
Head Office
Silvercorp’s disclosure documents are available from the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com
Contact Information