Rui Feng Chairman and CEO - Amazon S3 · 2018. 4. 13. · SVM:TSX/NYSE AMERICAN 7 *Realized silver...

European Gold Forum 2018

April 17-19, 2018

SVM:TSX/NYSE AMERICAN

Rui Feng

Chairman and CEO

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 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) and NYSE American (NYSE American: SVM). The TSX and NYSE have 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.

2 SVM:TSX/NYSE AMERICAN

SVM:TSX/NYSE AMERICAN 3

Ying Mining District, Henan Province

GC Project, Guangdong Province

CHINA’S PREMIER SILVER PRODUCER

BYP Mine,

Hunan Province (On Care and Maintenance)

* Profit distribution from Ying Mining District

Historical Production

(April 2006 - December 2017)

Silver: 56 Million Ounces

Lead+Zinc: 818 Million lbs

Profit Distribution*: US$380 million

>15 year mine life remaining

56 MILLION OUNCES SILVER PRODUCED OVER 11 YEARS


*Silvercorp’s fiscal year is ended on March 31

**F2018E equals actual production from April – December 2017 plus production guidance from January – March 2018

(5.1) (5.7) (6.0)

818 MILLION POUNDS LEAD AND ZINC PRODUCED OVER 11 YEARS


*Silvercorp’s fiscal year is ended on March 31

**F2018E equals actual production from April – December 2017 plus production guidance from January – March 2018

(76.3) (81.4) (83.4)

IMPROVED AND STEADY HEAD GRADES AT YING MINING DISTRICT


Dilution Control Improvement

FINANCIAL PERFORMANCE (VALUE & PROFIT OF PER TONNE ORE MINED)


*Realized silver price is calculated using Shanghai Metal Exchange price, less smelter charges, recovery, and 17% of value added tax.

▸ Cash + short-term

investments:

US$113.3 M (as at

Dec. 31, 2017)

▸ Dividend

US$0.02/year

▸ No Receivables

▸ No Debt

▸ Invested US$23M in

New Pacific Metals

▸ Spent ~US$6M on

share buyback

▸ Paid US$3.6M

dividend

REVENUE PERCENTAGE BY METALS


▸ GC Project

contributed

increased revenue

for Lead and Zinc

since Q3 2014

▸ Lead and Zinc price

increases and

lagging silver price

boosted Lead and

Zinc revenue

percentage

QUARTERLY FREE CASH FLOW


QUARTERLY ADJUSTED NET INCOME (LOSS)


STEADY & REDUCED SHARES OUTSTANDING


COMPARISON WITH PEERS: FREE CASH FLOW PER SHARE AND MULTIPLES


COMPARISON WITH PEERS: ALL- IN SUSTAINING COST


* All-in sustaining cost per ounce of silver, net of by-product credits.

COMPARISON WITH PEERS: RETURN ON EQUITY


GROWTH： GROW SHARES OUTSTANDING OR FREE CASH FLOW?


* Free cash flow=operating cash flow-capital expenditures-capital lease payment

• Silvercorp announced a Normal Course Issuer Bid to acquire up to 8,409,712, common shares, representing approximately 5% the

168,194,254 common shares issued and outstanding as of November 16, 2017. The buyback program will run from November 27,

2017 to November 26, 2018.

• Silvercorp bought back 1,717,100 common shares of the Company as at February 26, 2018.

GROWING RESERVES & RESOURCES-SILVER


2 Excludes Lead and Zinc. Gold was converted to Silver equivalent at a rate of 65:1.

1 Measured & Indicated Resources Inclusive of Reserves. See Appendix III, IV and V for breakout of Measured, Indicated and Inferred, Proven and Probable categories.

GROWING RESERVES & RESOURCES-LEAD & ZINC


1 Measured & Indicated Resources Inclusive of Reserves. See Appendix III, IV and V for breakout of Measured, Indicated and Inferred, Proven and Probable categories.

STEADY PRODUCTION AND COST CONTROL TO SUPPORT “QUALITY GROWTH”

Current Production:

▸ Maintain steady production, with stable or reduced cost

Growth:

▸ Grow existing assets organically through drilling

▸ Bring BYP back to production

▸ Acquired ~29.9% equity interest in New Pacific Metals Corp. (TSX-V:NUAG; OTCQX:NUPMF)

▸ Acquire high grade exploration project with resource defined that can quickly be brought

into profitable operation with reasonable capital expenditures


ADOPT NEW INFORMATION TOOL “ENTERPRISE BLOG” IN OPERATION

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” 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.


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.

YING MINING DISTRICT IN HENAN: SILVERCORP’S FLAGSHIP ASSET


▸ SGX, TLP, LME, LMW, HPG and HZG

underground mines working over 200

veins within 68.74km² mining permits

▸ Two centralized mills of 3,200 t/d

capacity to produce silver-lead and zinc

concentrates

▸ 6 smelters within 200km

▸ Produced 53.5 million oz silver plus

744 million lbs of lead+zinc since 2006

▸ Over 1.4 million metres of drilling yields

>15 years remaining mine life after 11

years’ production

▸ Opportunity for further acquisitions in

local area

* The Ying Mining District mines are held by Henan Found Mining Ltd., owned 77.5% by Silvercorp

SGX

TLP

HZG

HPG

LME

LMW

GC MINE IN GUANGDONG: THE SECOND MINE

Our Newest Mine

▸ Commercial production commenced in 2014

▸ Underground silver/zinc mine

▸ Excellent infrastructure and access

▸ Profitable operations


Main Access Ramp

BYP GOLD MINE : PREPARING FOR PRODUCTION

Status:

▸ Suspended mining operations in

August 2014

▸ Capital requirements for

upgrades to sustain ongoing

production are being considered

▸ Continuing to review alternatives

for this project

▸ To bring it back to production

may cost US$10 million


500 tpd Mill at the BYP Mine

FY2019 PRODUCTION GUIDANCE


*Estimated as per metal balance sheet

F2019

Guidance

F2018

Guidance

F2018 YTD

Actual +

Q4 Expected

F2019

Guidance

F2018

Guidance

F2018 YTD

Actual +

Q4 Expected

F2019

Guidance

F2018

Guidance

F2018 YTD

Actual +

Q4 Expected

Ore (000' tonne) 630 650 622 250 250 261 880 900 883

Silver (gram/tonne) 285 275 301 98 90 98

Lead (%) 4.3 4.2 4.4 1.6 1.5 1.5

Zinc (%) 0.9 0.9 0.9 3.0 2.6 2.8

Silver (million ounces) 5.4 5.3 5.6 0.6 0.4 0.6 6.0 5.7 6.2

Lead ( million pounds) 56.1 56.0 57.5 7.5 7.1 7.2 63.6 63.1 64.6

Zinc (million pound) 6.2 6.0 6.3 13.6 12.3 13.0 19.8 18.3 19.2

Cash production costs 75.4 66.8 74.9 57.2 46.1 54.7 70.2 61.0 68.9

123.7 114.0 123.9 75.5 58.6 73.7 122.2 109.0 121.5

Metal Production*

Costs ($/tonne of ore)

AISC production costs

Ying Mining District GC Mine Consolidated

Production and

cash costs

Head Grades

Fiscal Year is ended on March 31

FY2019 CAPITAL EXPENDITURE GUIDANCE


* For FY2019, 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.

* For FY2019, total tunneling at GC is budgeted at 16,000 meters, of which 1,000 meters will be capitalized and 15,000 meters will be expensed.

Mine Development and Facilities

Work

(meters)

Amount

(US$ million)

Work

(meters)

Amount

(US$ million)

Work

(meters)

Amount

(US$ million)

Tunneling* 66,000 18.8 1,000 0.6 67,000 19.4

Ramp development (4.2x3.8 meter in dimension) 4,000 4.4 1,000 0.8 5,000 5.2

Facilities and equipment - 8.6 - 1.3 - 9.9

Total Capital Expenditures 70,000 31.8 2,000 2.7 72,000 34.5

Tunneling* 17,000 3.9 15,000 3.8 32,000 7.7

Drilling 75,000 1.7 30,000 1.0 105,000 2.7

Ying Mining District GC Mine Consolidated

Mine Development and Capitalized Amount

Expensed Tunneling and Drilling

METAL PRICES


Silver Price

US$ Per Ounce

Lead Price

US$ Per Pound

Zinc Price

US$ Per Pound

* Current price & Silvercorp Net Realized Selling Price as of April 11, 2018

* Realized selling prices are calculated using Shanghai Metal Exchange price, less smelter charges, recovery, and 17% of value added tax.

COMPARISON WITH PEERS: KEY VALUATION RATIOS


* Stock prices were quoted as of December 31, 2017

COMPARISON WITH PEERS: KEY VALUATION RATIOS


* Stock prices were quoted as of December 31, 2017


Suite #1378 - 200 Granville St., Vancouver, BC, Canada V6C 1S4

Tel: 604-669-9397

Fax: 604-669-9387

Toll-Free: 1-888-224-1881

HEAD OFFICE

Silvercorp’s disclosure documents are available from the System for Electronic Document

Analysis and Retrieval (SEDAR) at www.sedar.com

SVM:TSX/NYSE AMERICAN

[email protected]

www.silvercorp.ca

APPENDICES


APPENDIX I:


OWNERSHIP AND COVERAGE

Ownership

Top 10 Institutional Investors % O/S

1 Van Eck Associates Corporation 7.79

2 Old Mutual Global Investors (UK), LTD 3.04

3 Morgan Stanley Canada, Ltd 1.83

4 Global X Management Company, 1.31

5 Stabilitas GmbH 1.19

6 DZ Privatbank S.A. 1.17

7 AMG Fondsverwaltung AG 0.83

8 RBC Global Asset Management, Inc. 0.72

9 BMO Asset Management, Inc 0.67

10 Marshall Wace North America, L.P. 0.63

Source: BD Corporate April 2018 Data

Joe Reagor Roth Capital

Bhakti Pavani Euro Pacific

Analyst Coverage

Under Review Raymond James

APPENDIX II


MANAGEMENT & BOARD

Management

Rui Feng, Ph.D., Geology

Chairman and CEO, Director

Derek Liu, MBA, CGA, CPA

Chief Financial Officer

Luke Liu, M. Eng. PhD (Mining Eng.)

Vice President China Operations

Lorne Waldman, MBA, LL.B.

Senior Vice President

Board of Directors

Rui Feng Marina Katusa

Yikang Liu Paul Simpson

David Kong

APPENDIX III:


SUMMARY OF RESERVES1

Project Reserve

Category

Tonnes

(Million)

Average Grades Contained Metal Reserves

Silver (g/t) Lead (%) Zinc (%) Silver (Moz) Lead (t) Zinc (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 Project

Proven 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

1. Table excludes HPG mine Proven reserves of 16,430 oz Gold (470,000 tonnes grading 1.10 g/t Gold) and HPG mine Probable reserves of 10,840 oz Gold (290,000 tonnes grading 1.15 g/t Gold)

APPENDIX IV:


SUMMARY OF RESOURCES1

Project Resource

Category

Tonnes

(Million)

Average Grades Contained Metal Resources

(Inclusive of Reserves)

Silver (g/t) Lead (%) Zinc (%) Silver (Moz) Lead (t) Zinc (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

1. Table excludes HPG mine Measured resources of 24,000 oz Gold (690,000 tonnes grading 1.10 g/t Gold), Indicated resources of 22,000 oz Gold (630,000 tonnes grading 1.10

g/t Gold), Inferred resources of 39,000 oz Gold (1,010,000 tonnes grading 1.21 g/t Gold). Table also excludes BYP Gold-Lead-Zinc project resources

APPENDIX V:


BYP MINE RESOURCE

CLASS Cut-off Grades

(g/t)

Resource Grades Contained Metal

Resources

Tonnes

(Million) Gold (g/t) Gold (oz)

Indicated 1.0 3.51 2.59 292,000

Inferred 1.0 2.47 1.84 146,000

Mineral Resources for Gold Zones:

CLASS Cut-off Grades

(%)

Resource Grades Contained Metal

Resources

Tonnes

(Million) Lead (%) Zinc (%)

Lead

(Tonnes)

Zinc

(Tonnes)

Indicated 2.0

Lead+Zinc 7.33 1.16 2.52 85,000 184,700

Inferred 2.0

Lead+Zinc 7.55 0.85 2.75 64,200 207,600

Mineral Resources for Lead and Zinc Zones:

Notes to Resource Tables:

1. Resources as of December 31, 2011

2. Technical report filed on August 16, 2012 at www.sedar.com

ENDNOTES AND CAUTIONARY STATEMENTS

Alex Zhang, P. Geo., 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, 2017, 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, effective date

31 December, 2016 by P R Stephenson, P. Geo., H A Smith, P.Eng., A Ross, P. Geo, H Muller, Beng,

MAusIMM, CP

- Technical Report for BYP Gold-Lead-Zinc Property, Hunan Province, China, effective date 30 June, 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, effective date 23 January, 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.


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Rui Feng Chairman and CEO - Amazon S3 · 2018. 4. 13. · SVM:TSX/NYSE AMERICAN 7 *Realized silver...

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