South American Silver is a growth-focused exploration and development company advancing one of the world's largest undeveloped silver and indium resources at its Malku Khota project in Bolivia. It also controls a large-scale copper-gold target in Chile called the Escalones project. The company has an experienced management team and is well financed into feasibility studies. It presents attractive leverage to silver prices with potential to become a top primary silver and indium producer.
1. A Growth Focused Exploration & Development Company Growing and advancing one of the world’s largest undeveloped silver and indium resources. TSX: SAC, US OTC: SOHAF Corporate Presentation Q1 2011 www.soamsilver.com
2. Forward Looking Statements Certain statements contained herein constitute “forward-looking statements.” Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as “plans,” “intends,” anticipates,” “should,” “estimates,” “expects,” “believes,” “indicates,” “targeting,” “suggests,” “potential,” and similar expressions. These forward-looking statements are based on current expectations and entail various risks and uncertainties. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. The Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. TSX:SAC US OTC:SOHAF
36. Potential NYSE-AMEX listing to increase visibility and liquidityAs of November 8, 2010 with proposed $28 million financing (1)On a fully diluted basis (2) As of December 16, 2010
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38. Strategic 19.7% investment positions SAC in strong financial and operational position to advance projects to feasibility
39. Track record of successfully facilitating South American project development through relationships with national and state governments in the region
40. Portfolio of South American projects with strong government support in permitting, rail and port infrastructure
44. Comparative Resources in the Americas Second largest development stage silver resource Millions of Silver Ounces Mexico El. Salvador Mexico Mexico Mexico Peru Mexico Yukon Argentina Nunavut Peru Guatemala Bolivia Chile Source: CanaccordReport as of January 11, 2011 Note: All companies have projects in South and/or North America
45. Enterprise Value in the Americas Undervalued relative to peers Average EV/oz of companies with >200Moz silver resource: >$2.65/oz Average EV/oz for development stage silver companies: >$1.70/oz * Source: Canaccord Report January 17, 2011 Share prices as of January 14, 2011, Note: All companies have projects in South and/or North America *EV/oz truncated to $10 . Alexco excluded from early stage average EV/oz AgEq $18/oz
46. Development Stage Value Curve Potential value growth with project advancement Enterprise Value per Oz of Silver by Stage Increased value with project advancement $ /oz Increased value through resource expansion Construct Permits FS PFS $ PEA Resource Definition $ Discovery Production Early Stage Exploration & Development Advanced Development Stage (Reserves) Source: Recent average enterprise value per ounce of silver at various development stages for North and South American based projects. Canaccord, Wellington West and Company reports.
47. Silver Company Valuations by Stage EV/Oz Source: Canaccord Report January 17, 2011 Share prices as of January 31, 2011, Note: All companies have projects in South and/or North America
48. Silver Supply/Demand Surging investment demand plus improving industrial consumption suggests continued demand growth with flat total supply Total Global SilverSupply Total Global SilverDemand & ETFs & ETF Source: GFMS World Silver Survey 2010
65. Indium Demand Growing demand in high-tech markets 2010 total indium production End-use Market Demand (tonnes) Growth assumptions based on data from Displaybank in LCD TV Association “LCD TV Matters”-Volume 3, Issue 2, February 2010 , Strategies Unlimited, August 2009 , Solarbuzz, Photon International, GFMS , Nanomarkets, and the US Department of Energy Critical Minerals Strategy Report
66. Indium Fundamentals Zinc Production vs. Indium Demand (U.S.) U.S. Indium Demand (tonnes) Zinc Production (thousand tonnes) Source: U.S Department of Energy: Critical Materials Strategy, December 2010; Zinc Production USGS Materials Flow of Zinc in the US. 1850-1990, USGS Minerals Yearbook 1994-2008
94. Mineralization High Grade Sandstone1160 g/t Silver Geological formations looking south from Limosna Malku Khota Sandstone Aroifilla Fm WaraWara Sandstone TSX:SAC US OTC:SOHAF
99. Deposit open along trend and down dip with excellent potential for expansion
100. New discovery of higher grade zones and down dip expansion of surface mineralizationTSX:SAC US OTC:SOHAF
101. New Exploration Results Discovery of broad continuous mineralization horizon LMD048: 286 meters grading 76 g/t Ag Eq Grade thickness values of over 21,500 g-m AgEq TSX:SAC US OTC:SOHAF
107. Additional production of by-product metals including lead, zinc, copper and galliumHeap Leach or Milling with Acid Solution Silver, Gold and Copper Recovery Indium and Gallium Recovery Lead Recovery Zinc Recovery Further refining with solvent extraction (SX-EW ) process to metal doreor high purity concentration * solvent extraction and electo-winning TSX:SAC US OTC:SOHAF
108. Summary of PEA 2009 Updated PEA with expanded throughput for Q1 2011 Pincock, Allan and Holt Heap Leach Operation – 20,000 Tonnes per Day Base Case Silver Price: US$13.30/oz Base Case Indium Price: US$530/kg In US dollars, March 2009, PEA by Pincock Allan and Holt. Updated study utilizing higher production levels and new cost estimates anticipated Q1-2011 First ten years of production
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110. Global Silver Industry Cash Cost Curve Anticipated low-cost silver production Cumulative Percentile of Silver Mine Production Cost Malku Khota 6.4 Mozs/yr ~ $3.75/oz Total Cash Cost Per Ounce of Silver Industry AverageCash Cost $5.25/oz Source: GFMS World Silver Survey 2010
132. Leveraged to Silver Value of silver per dollar invested Silver value per $1 invested SAC has some of the best leverage to silver of any development stage company with over $40 of silver value per $1 invested Average value of silver <$8 of silver per $1 invested* Source: Canaccord as of January 17, 2011, Share prices updated January 14, 2011 Note: all companies have projects in South and/or North America Calculated using $25/oz Ag. Dollar value of silver per $1 invested = (silver resource/shares outstanding) x $25/oz silver) divided by share price Value only shown for silver with no contribution from other metals
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134. Track record of discovery and successful project development
135. Growing shareholder value through resource expansion and advancing projects up the development value curve toward feasibility
142. TSX: SAC OTC: SOHAF Phone: 604.681.6926 1.855.681.6926 www.soamsilver.com Greg Johnson President & CEO TSX:SAC US OTC:SOHAF
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144. SAC undervalued relative to peers at $0.50/oz vs average of more than $1.70/oz for early stage resources and $2.65/oz for >200Moz resourcesTSX:SAC US OTC:SOHAF
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150. Board of Directors Strong industry and financial experience Ralph Fitch, Executive ChairmanGreg Johnson, President and CEO Antonio Canton, Director - Mr. Canton is an independent consultant for international companies in marketing, finance and real estate. He is a director of a number of Swiss companies and brings to the board extensive experience in accounting and finance. Peter Harris, Director - Mr. Harris is an engineer with over 40 years of mining industry experience including as Senior VP and Chief Operating Officer at Nova Gold Resources Inc., and Senior VP of Project Development at Placer Dome Inc. He has been involved in the construction and operation of over 20 different mines in North and South America, Africa, Australia and Papua New Guinea. William Murray, Director - Mr. Murray is an engineer in the mining industry with over 33 years of experience in construction management and project evaluation in North America and Africa. He currently serves as the executive chairman and director of Polymet Mining Corp. Mr. Murray has been involved in numerous successful projects while working at Fluor Daniel, Denison Mines, Optimum Project Services and Anglo American Corp. in South Africa. Paul Haber, Director - Mr. Haber is a Chartered Accountant and a Certified Public Accountant with a strong background in US/Canadian accounting and finance. Presently manages Haber & Co. Ltd. Has previously been Chief Financial Officer and Corporate Secretary of a TSX Venture listed company. John Watson, Director - Mr. Watson has been the President of a TSX Venture Exchange listed company since 2002. He is also the manager/member of a limited liability corporation that owns and manages commercial real-estate. Tina Woodside, Director - Ms. Woodside is currently the head of the corporate finance department in Gowlings’ Toronto office and a member of the firm’s National Executive Committee. Ms. Woodside practices corporate and securities law with particular emphasis on corporate finance, mergers and acquisitions and corporate governance matters. TSX:SAC US OTC:SOHAF