us silver corporate presentation - september 2011
TRANSCRIPT
U.S. Silver CorporationSeptember 2011
TSXV : USA
US OTC Markets : USSIF
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.
Page 2
Strong Silver Market Trends
In 1980, when Nelson Bunker Hunt was asked as to why he had
developed a passion for silver, he said; "Silver looked safer than
overseas oil concessions, the way things were going. And precious
metals were a good hedge against paper money".
Silver Demand – Industrial and Investment
Page 3
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Silver Gold Ratio
Strong Silver Market Trends
Silver up 110% since January 1, 2010
Page 4
Million oz AgAnnual production
85% of revenue from silver
Company Overview
2.4Established producer
in prolific Silver Valley
in Northern Idaho
Low cost incremental
growth potential
(excess capacity)
Revenue projections in
excess of $90 million at
current prices
Page 5
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
Page 6
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 in use, excess capacity available
• Dominant land position in the Silver Valley
– Large under explored property
• No historic environmental liability with EPA
– Settled in 2001
• Hedged 20% of production in 2011 to protect CapEx program
• 80% unhedged, 100% unhedged in 2012 and after
Page 7
Million oz Ag
Proved & Probable Reserves
21.986 Million lbs. lead
11 Million Lbs. copper
Provides a 7 year
mine life
Exploration consistently
replaces annual
production
Has produced for almost
60 years and still keep
finding ore
Page 8
Recent Results
Page 9
Q2 2011
YTD Q2 2011 Q1 2011 2010 2009
Revenue 49.9 30.8 19.1 62.4 45.9
Gross profit 20.5 12.3 8.2 10.4 3.0
Pre tax income 15.6 9.4 6.2 4.9 2.0
Cash from Ops 19.5 12.3 7.2 15.0 8.3
Silver production 1,142,685 648,322 494,363 2,275,817 2,427,156
Lead production 2,994,419 1,717,218 1,277,201 5,613,689 6,446,656
Copper production 581,125 321,724 259,401 1,000,319 1,075,307
Cash cost / ounce Ag 16.50 15.39 17.97 13.50 11.67
Million
Market Data
$205Current Market Cap
(September 2011)
52 week hi-lo $0.83 -
$0.15
307 million
shares outstanding
335 fully diluted
TSX.V and OTCQX
average daily volume
1 Million
Undervalued vs.
peers on key metrics
Page 10
Galena Mine
Page 11
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
2ndlargestPrimary silver producer
in the U.S.
Page 12
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
1millionOunces produced
79
Page 13
Mining Operations
No
. 3 S
haft
Gale
na S
haft
Cala
day S
haft
Co
eu
r S
haft
2400
Sea Level
3700
5500
Call
ah
an
Sh
aft
4900
483356
400
Coeur 3700
28003000
3400
1200
Silver
Vein117-215
72
Ag - Pb Veins
Ag - Cu Veins
5200
4600
4300
4000
LEGEND
175
Page 14
Galena Performance
-
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
Silver ounces produced
Page 15
Milling Operations
Excess Capacity
Galena Mill 900 tons/day and Coeur
Mill 500 tons/ day = total capacity of
1,400 tons/day
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
Page 16
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
Ag Lead Copper
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
Total 44.4 203.3 21.3
Contained
Page 17
Coeur Redevelopment
Page 18
Restarting The Coeur Mine
• No permitting or
acquisition costs
• Existing excess mill
capacity
• Examining alternative
mining methods & scale
• Additional drilling
underway to better
define deposit
• Significant exploration
upside
5.9millionresource ounces
targeted
Page 19
Exploration Potential
Page 20
• Dominant land position
• Under explored, accessible
• Strong cash flow funding all
plans, 50% increase in
footage in 2011
• Identified 6 surface &
underground targets that are
ready for drilling
• Historical success of
increasing reserves well in
excess of production
14Thousandacres of land
Exploration Potential
Page 21
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
Page 22
Surface and Underground Drill Targets
CDA
“GAP”
Western
Coeur Mine
Argentine
Vein
Deep
Coeur MineDeep
Silver
Vein
Calady Mine
Lead-Silver
Page 23
Surface Drilling Targets
Commencing 12,000 foot surface drilling program
• CDA Gap
• 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
Page 24
Underground Drilling Targets
• Targets:
Western Coeur Mine
Deep Coeur Mine
Deep Silver Vein
Caladay Lead-Silver
• Targets are extensions of known vein systems
Page 25
The Right People in Place
Page 26
Experienced and Stable Workforce
33 with over 20 years of
experience
Additional 30 contract
miners
237employees
Page 27
The Right Management TeamGordon E.
Pridham
Chairman
• Over 25 years experience in investment banking, capital markets, and corporate banking
• President and CEO of Edgewater Capital and Chairman of Titanium Corporation
• Serves as a Director for Newalta Income Fund
• Formerly with Chemical Bank and National Bank, in the energy and minerals sector in New York, Calgary, and Toronto
• Formerly with Merrill Lynch Canada and Midland Walwyn and managed the Investment Banking groups at Deutsche Morgan
Grenfell, Research Capital, and Raymond James
Tom H. Parker
President , CEO &
Director
• Mining engineer with over 40 years experience in the mining industry
• 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
• Former CEO of Contain Minerals which owned 22 coal mines, the Brewer gold mine, and Montana Talc
• Worked for 10 years for ARCO where he was President of Beaver Creek Coal Mines, General Manager of Nevada Molly,
President of Thunder Basin Coal and VP for Engineering, Exploration and Business Development
• Former General Manager of Jacobs Ranch mine for Kerr McGee Coal and served as Project Manager for Conoco
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
Page 28
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 • 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.
Page 29
Summary
Opportunity to Capitalize on a proven and established asset
• Production growth• Reserve Growth• Exploration Expansion
Increased
Strength
Page 30
Summary
• Highly leveraged silver producer,
85% revenue from silver, 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 31