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Us silver corporate presentation feb. 2012
- 1. U.S. Silver Corporation February 2012 TSX : USA US OTC Markets : USSID DB Frankfurt : QE2
- 2. 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
- 3. US Silver - Summary • 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 Page 3
- 4. Strong Silver Market Trends Page 4
- 5. Company Overview 2.4 Established producer in prolific Silver Valley in Northern Idaho Low cost incremental growth potential (excess mill capacity) Million oz Ag 2011 revenue approximately $95 million Annual production 85% of revenue from silver Page 5
- 6. Located in Historic Silver Valley Over 1 billion ounces produced British Columbia Alberta Modern and ample Spokane infrastructure Washington Missoula in place Montana Safe and friendly jurisdiction Oregon Boise Region of Idaho increasing interest Page 6
- 7. 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 Page 7
- 8. Proven & Probable Reserves 21.9 Million oz. Ag Reserves provides a 7 year mine life Exploration consistently exceeds annual production 86 Million lbs. lead The Galena Mine has 11 Million lbs. copper produced for almost 60 years & ore continues to be found Page 8
- 9. Recent Results 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 Page 9
- 10. Market Data $2.10 per share 52 week high $4.15 – Low $130 $1.95 Graduated to TSX on Oct 3, 2011 61.8 million shares outstanding 68.2 million fully diluted Million TSX and OTCQX combined average daily volume 291 Thousand (post-consolidation) Current Market Cap Undervalued vs. peers on key (February 2012) metrics Page 10
- 11. Galena Mine Page 11
- 12. Galena Mine – an impressive history 2nd largest Primary silver producer High grade, narrow vein, copper-silver & lead-silver mine Short term variability in operating results, long term proven producer No historic environmental in the U.S. liability Page 12
- 13. Galena – Past & Present 182 million Ounces produced Focusing on higher grade zones to increase head grade Examining production expansion options with high prices Continued exploration success and mine life extension Page 13
- 14. Mining Operations LEGEND Caladay Shaft Ag - Pb Veins Callahan Shaft Ag - Cu Veins No. 3 Shaft Galena Shaft Coeur Shaft 1200 2400 2800 3000 Sea Level 400 3400 356 483 Silver 117-215 3700 Coeur Vein 4000 3700 4300 4600 4900 175 5200 72 5500 Page 14
- 15. Galena Performance Silver ounces produced 3,000,000 2,500,000 2.4 million oz forecast 2,000,000 1,500,000 1,000,000 500,000 -‐ 2007 A ctual 2008 A ctual 2009 A ctual 2010 A ctual 2011 Forecast 2012 Forecast Page 15
- 16. 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 Page 16
- 17. Reserves Detail 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 • 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 Page 17
- 18. Coeur Redevelopment Page 18
- 19. Restarting The Coeur Mine 6.0 • No permitting or acquisition costs • Existing excess mill capacity • Re-development started February 2012 • First production expected by million end of 2012 • Full production rates of resource ounces 500,000 oz. per year by end of targeted 2013 • 2012 Capital cost of approximately $5 million Page 19
- 20. Exploration Potential Page 20
- 21. Significant Reserve Growth Proved and Probable Silver Reserves 25,000,000 Reserve addi6ons consistently replace produc6on 20,000,000 15,000,000 10,000,000 5,000,000 - 2005 2006 2007 2008 2009 2010 Page 21
- 22. Exploration Potential 14 • Dominant land position • Under-explored & accessible • Internally funded • Identified 6 surface & underground targets that are ready for drilling Thousand Exploration Drilling • 2012 – 100,000 feet (budgeted) acres of land • 2011 – 70,000 feet • 2010 – 49,000 feet • 2009 – 13,000 feet Page 22
- 23. Surface and Underground Drill Targets CDA “GAP” Western Argentine Coeur Mine Vein Deep Calady Mine Coeur Mine Deep Lead-Silver Silver Vein Page 23
- 24. 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 Exploration Drilling Targets: • 2011 – 70,000 feet (projected) • Western Coeur Mine • 2010 – 49,000 feet • Deep Coeur Mine • 2009 – 13,000 feet • Deep Silver Vein • Caladay Lead-Silver Targets are extensions of known vein systems Page 24
- 25. The Right People in Place Page 25
- 26. Experienced and Stable Workforce 260 employees 33 with over 20 years of experience Additional 30 contract miners Page 26
- 27. The Right Management Team Gordon E. • Over thirty years of experience as a Global Finance Executive Pridham • Extensive special committee and public board experience with a track record of creating value for shareholders Executive • Serves on the public company boards of Newalta Corporation, NorRock Realty Finance Corporation and Titanium Chairman & Interim Corporation, where he is Chairman of the Board CEO • 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 • Over 33 years experience in mine engineering and management Chief Operating • Direct senior management of underground mining operations for Newmont Mining Corporation in Elko, Nevada and Barrick Officer Gold, Echo Bay and Homestake Mining Chris J. Hopkins • Chartered Accountant with over 25 years experience in financial management, strategic planning, mergers and acquisitions, CFO corporate finance and financing and management reporting • Formerly with Rio Algoma, Suncor, and several junior mining and oil & gas companies Mine • Many long service management end employees provide knowledge and continuity Management • New management bring new thinking and approaches Tom Ryley • Over 35 years experience in the natural resources sector Director • 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. Page 27
- 28. The Right Board John S. Brock • Geologist with over 40 years experience as an executive for 20 public, junior exploration companies Director • 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. • Geologist and mining analyst with over 15 years experience Macintosh • Served as an executive and a director of numerous public and private companies in Canada and the United States Director • President and COO of Innovium Capital, a company that invests in innovative opportunities Kevin D. Stulp • Served on the board of Aurora Oil & Gas since 1997 Director • 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. Director • 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 • Mining engineer with over 40 years experience in the mining industry Director • 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 Page 28
- 29. Summary Increased Strength Opportunity to Capitalize on a proven and established asset • Produc6on growth • Reserve Growth • Explora6on Expansion • Opportuni6es outside of core asset base Page 29
- 30. 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
- 31. Contact Us: us-silver.com Corporate Office Tel: 416.907.5501 info@us-silver.com 401 Bay St. Suite 2702 Toronto, ON M5H 2Y4 Investor Relations Heather Bailey-Foster, Manager 208-556-1535 Ex.2 hfoster@ussil.com