us silver corporate presentation feb. 2012
TRANSCRIPT
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U.S. Silver Corporation February 2012
TSX : USA US OTC Markets : USSID DB Frankfurt : QE2
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Forward Looking Statements
Certain statements contained in or incorporated by reference into this presentation constitute forward-looking statements. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to U.S. Silver or its management, are intended to identify forward-looking statements, however, other information may also constitute forward-looking statements. Such statements reflect the current views of U.S. Silver with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of U.S. Silver that may be expressed or implied by such forward-looking statements to vary from those described herein should one or more of these risks or uncertainties materialize. U.S. Silver does not intend, and does not assume any obligation, to update these forward-looking statements.
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US Silver - Summary
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• Annual silver production of 2.4 million ounces • in production for 60 years • excess hoisting and milling capacity
• 85% of revenue from silver – pure play • Located in Silver Valley, Northern Idaho
• most prolific in the US, safe, mining friendly • 14,000 acre, dominant under explored land position in the Silver Valley
• significant increase in exploration program • Cash of approximately $30 million • Market Cap $150 million • TSX – USA
• trades actively
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Strong Silver Market Trends
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Million oz Ag Annual production 85% of revenue from silver
Company Overview
2.4
Established producer in prolific Silver Valley in Northern Idaho
Low cost incremental growth potential (excess mill capacity)
2011 revenue approximately $95 million
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Located in Historic Silver Valley
Montana
Oregon
Washington
British Columbia
Spokane
Alberta
Missoula
Boise
Idaho
Over 1 billion ounces produced
Modern and ample infrastructure in place
Safe and friendly jurisdiction
Region of increasing interest
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Company Overview • 100% interest in the producing Galena silver-copper-lead mine
– High grade narrow vein mining operation, opened in 1953
• 100% interest in the Coeur Silver mine – Redevelopment plans underway
• 2 mills (Galena and Coeur) – Both operating, excess capacity available
• Dominant land position in the Silver Valley – Large under explored property
• No historic environmental liability with EPA – Settled in 2001
• Fully un-hedged on silver and base metals
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Million oz. Ag
Proven & Probable Reserves
21.9
86 Million lbs. lead
11 Million lbs. copper
Reserves provides a 7 year mine life
Exploration consistently exceeds annual production
The Galena Mine has produced for almost 60 years & ore continues to be found
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Recent Results
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Q3 2011 YTD Q3 2011 Q2 2011 Q1 2011 2010 2009
Revenue 78.2 28.3 30.8 19.1 62.4 45.9 Gross profit 31.7 11.2 12.3 8.2 10.4 3.0 Pre tax income 23.1 7.6 9.4 6.2 4.9 2.0 Cash from Ops 24.8 5.3 12.3 7.2 15.0 8.3
Silver production 1,788,228 645,543 648,322 494,363 2,275,817 2,427,156 Lead production 4,911,214 1,916,795 1,717,218 1,277,201 5,613,689 6,446,656 Copper production 898,252 317,127 321,724 259,401 1,000,319 1,075,307 Cash cost / ounce Ag 16.89 17.57 15.39 17.97 13.50 11.67
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Million
Market Data
$130
Current Market Cap (February 2012)
$2.10 per share
52 week high $4.15 – Low $1.95
Graduated to TSX on Oct 3, 2011
61.8 million shares outstanding
68.2 million fully diluted
TSX and OTCQX combined average daily volume 291 Thousand (post-consolidation)
Undervalued vs. peers on key metrics
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Galena Mine
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Galena Mine – an impressive history
High grade, narrow vein, copper-silver & lead-silver mine
Short term variability in operating results, long term proven producer
No historic environmental liability
2nd largest
Primary silver producer in the U.S.
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Galena – Past & Present
Focusing on higher grade zones to increase head grade Examining production expansion options with high prices Continued exploration success and mine life extension
182 million
Ounces produced
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Mining Operations
No.
3 S
haft
Gal
ena
Shaf
t
Cal
aday
Sha
ft
Coe
ur S
haft
2400
Sea Level
3700
5500
Cal
laha
n Sh
aft
4900
483 356 400
Coeur 3700
2800 3000
3400
1200
Silver Vein 117-215
72
Ag - Pb Veins Ag - Cu Veins
5200
4600 4300 4000
LEGEND
175
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-‐
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Forecast 2012 Forecast
Silver ounces produced
Galena Performance
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2.4 million oz forecast
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Milling Operations Capacity Galena Mill 900 tons/day Coeur Mill 500 tons/day Currently operating at 65% capacity Ores 2 ore types (silver-copper and silver-lead) have separate crushing, milling and flotation circuits
Recoveries Consistent mill recovery rates of 96% for silver-copper and 92% for silver-lead ores
Smelters Silver-copper concentrates railed to Quebec and silver-lead cons trucked to Trail, BC
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Reserves Detail
• Current 43-101 based mine life of approximately 7 years
• U.S. Silver continues to cost effectively add reserves well in excess of its production, continually extending mine life
• Reserves increased by 115% since 2006
Tons Ag (oz/t) (MM oz) (MM lb) (MM lb)
Proven & Probable Reserves 1,615,700 13.6 21.9 85.6 11.1
Measured & Indicated Resources 560,600 15.6 8.7 14.4 4.8
Inferred Resource 1,026,300 13.4 13.7 103.3 5.4
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Coeur Redevelopment
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Restarting The Coeur Mine
• No permitting or acquisition costs
• Existing excess mill capacity
• Re-development started February 2012
• First production expected by end of 2012
• Full production rates of 500,000 oz. per year by end of 2013
• 2012 Capital cost of approximately $5 million
6.0 million
resource ounces targeted
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Exploration Potential
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Significant Reserve Growth
-
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2005 2006 2007 2008 2009 2010
Proved and Probable Silver Reserves
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Reserve addi6ons consistently replace produc6on
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• Dominant land position • Under-explored & accessible • Internally funded • Identified 6 surface &
underground targets that are ready for drilling 14
Thousand
acres of land
Exploration Potential
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Exploration Drilling • 2012 – 100,000 feet (budgeted) • 2011 – 70,000 feet • 2010 – 49,000 feet • 2009 – 13,000 feet
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Surface and Underground Drill Targets
CDA “GAP”
Western Coeur Mine
Argentine Vein
Deep Coeur Mine
Deep Silver Vein
Calady Mine Lead-Silver
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Drilling Targets Surface • Commenced 12,000 foot surface drilling program targeting
CDA Gap and Argentine Vein Drill ready targets identified by • Surface and underground showings • Geochemical profile matching that of Galena/Coeur • Strong correlation between surface tetrahedrite showings
and deeper silver vein systems Underground Targets:
• Western Coeur Mine • Deep Coeur Mine • Deep Silver Vein • Caladay Lead-Silver
Targets are extensions of known vein systems Page 24
Exploration Drilling • 2011 – 70,000 feet (projected) • 2010 – 49,000 feet • 2009 – 13,000 feet
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The Right People in Place
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Experienced and Stable Workforce
33 with over 20 years of experience Additional 30 contract miners
260 employees
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The Right Management Team Gordon E. Pridham Executive Chairman & Interim CEO
• Over thirty 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, NorRock Realty Finance Corporation and Titanium Corporation, where he is Chairman of the Board
• Formerly with Chemical Bank and National Bank in the energy and minerals sector in New York, Calgary, Toronto and Hong Kong
• Following Merrill Lynch Canada, he managed the Canadian Investment Banking groups at Deutsche Bank, Research Capital and Raymond James
Steven Long Chief Operating Officer
• Over 33 years experience in mine engineering and management • Direct senior management of underground mining operations for Newmont Mining Corporation in Elko, Nevada and Barrick
Gold, Echo Bay and Homestake Mining
Chris J. Hopkins CFO
• Chartered Accountant with over 25 years experience in financial management, strategic planning, mergers and acquisitions, corporate finance and financing and management reporting
• Formerly with Rio Algoma, Suncor, and several junior mining and oil & gas companies
Mine Management
• Many long service management end employees provide knowledge and continuity • New management bring new thinking and approaches
Tom Ryley Director
• Over 35 years experience in the natural resources sector • He sits on the boards of several public, private and charitable organizations • Mr. Ryley graduated from York University with a Bachelor of Arts and from Carleton University with a Master of Arts in
Public Administration.
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The Right Board John S. Brock Director
• 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
• Served six years as governor of the Vancouver Stock Exchange (TSX Venture Exchange) and CDNX Exchange and 2 years on the TSX Venture Exchange Advisory Board
• Currently CEO of Pacific Ridge Exploration and Senior Consultant to the Manex Resources Group
James M. Macintosh Director
• Geologist and mining analyst with over 15 years experience • Served as an executive and a director of numerous public and private companies in Canada and the United States
• President and COO of Innovium Capital, a company that invests in innovative opportunities
Kevin D. Stulp Director
• Served on the board of Aurora Oil & Gas since 1997 • Worked as a consultant with Forte group,
• Held various positions with Compaq Computer Corporation, including industrial engineer, new products planner, manufacturing manager, director of manufacturing and director of worldwide manufacturing reengineering
Alan R. Edwards Director
• Board of directors for Gammon Gold Inc., Entrée Gold Inc., and Copper One Inc. • President and Chief Executive Officer of Copper One Inc.
• Senior management positions with Frontera Copper, Apex Silver Mines, Kinross, Cyprus Amax, Phelps Dodge
• Mr. Edwards holds an MBA from the University of Arizona and a B.S. Mining Engineering also from the University of Arizona.
Tom H. Parker Director
• Mining engineer with over 40 years experience in the mining industry • Retired as CEO of US Silver in January 2012
• Former President and CEO of Gold Crest Mines and High Plains Uranium
• Worked for 10 years as an Executive VP of Anderson and Schwab, a New York based management consulting firm
• ARCO for 10 years where he was President of regional operations and VP for Engineering, Exploration and Business Development
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Summary
Opportunity to Capitalize on a proven and established asset • Produc6on growth • Reserve Growth • Explora6on Expansion • Opportuni6es outside of
core asset base
Increased Strength
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Summary
• Highly leveraged silver producer, 85% revenue from silver, no hedges
strong cash flow • Stable and consistent production • Infrastructure in place with excess capacity • Dominant land position with significant
exploration upside with in a highly prospective region • No debt, sufficient financial capacity to execute
growth plan
• No historic environmental liability Page 30
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Contact Us:
us-silver.com Corporate Office Tel: 416.907.5501 [email protected]
401 Bay St. Suite 2702 Toronto, ON M5H 2Y4
Investor Relations
Heather Bailey-Foster, Manager 208-556-1535 Ex.2 [email protected]