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20120531 impact silver presentation final
 

20120531 impact silver presentation final

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    20120531 impact silver presentation final 20120531 impact silver presentation final Presentation Transcript

    • C O R P O R AT E P R E S E N T AT I O N │ M AY 2 0 1 2T S X – V : I P T │ F R AN K F U R T : I K L │ I S I N : C A4 5 2 5 7 A1 0 2 1
    • DISCLAIMER Except for historical information, this presentation may contain certain “forward-looking” statements and information relating to IMPACT that are based on the beliefs of IMPACT management, as well as assumptions made by and information currently available to IMPACT management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including but not limited to, without limitations, exploration and development risks, expenditure and financing requirements, title matters, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with vendors and strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices, and one-time events. Should any one or more risks or uncertainties materialize or change, or should any underlying assumptions prove incorrect, actual results and forward-looking statements may vary materially from those described herein. IMPACT does not assume the obligation to update any forward-looking statement. The factors that could cause actual results to differ materially include, but are not limited to, the following: general economic conditions; changes in financial markets; the impact of exchange rates; political conditions and developments in countries in which the Company operates; changes in the supply, demand and pricing of the metal commodities which the Company mines or hopes to find and successfully mine; changes in regulatory requirements impacting the Company’s operations; the ability to properly and efficiently staff the Company’s operations; the sufficiency of current working capital and the estimated cost and availability of funding for the continued exploration and development of the Company’s exploration properties. This list is not exhaustive and these and other factors should be considered carefully, and readers should not place undue reliance on the Company’s forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. George Gorzynski, P.Eng., a Qualified Person under the meaning of Canadian National Instrument 43-101, is responsible for the technical information in this presentation.1
    • CORPORATE HIGHLIGHTS • Corporate focus is mining at a profit • Consistently maintains a strong cash position & zero debt • 90% of revenues from unhedged silver • Friendly-to-investor, tightly managed share structure (73M Shares FD)2
    • TECHNICAL HIGHLIGHTS ROYAL MINES OF ZACUALPAN • Three operating silver mines in Mexico feeding a central . processing plant • Two new mines scheduled for initial production in late 2012 • Plan to double silver production in three years • Ownership of two silver districts covering 248 square miles (643 square kilometers) • Substantial exploration potential based on extensive silver mining history3
    • LOCATION • Located a three-hour drive from Mexico City with a paved road right to the front gate of the plant • Excellent infrastructure with modern electric power grid, ample water supplies & skilled work force (99% Mexican) • Many other significant mining operations in the surrounding area4
    • HISTORY • The Royal Mines of Zacualpan is one of the oldest mining districts in the Americas with 485 years of recorded mining history • Over 2,700 old mine workings have been catalogued and form the basis for modern and effective exploration • IMPACT Silver bought the Zacualpan assets in 2006 One of 30 historic processing plants found in the and then consolidated district attesting to a long history of silver mining ownership of the entire district for the first time in its history5
    • MINE PRODUCTION ROYAL MINES OF ZACUALPAN • Three producing mines – San Ramon, Chivo, Noche Buena • In 2011 the three mines averaged 421 tonnes per day (tpd) at 5.7 oz/tonne (195 g/t) silver • In 2011 the cash cost per ounce of silver was $9 net of lead and zinc credits • All three mines feed the central Guadalupe Processing Plant This map is reproduced in miniature on following slides6
    • MINERAL PROCESSING GUADALUPE AND CAPIRE PLANTS OPERATING UNDER CONSTRUCTION • Guadalupe Processing Plant, Zacualpan • Capire Pilot Plant, Mamatla • 500-tpd crushing and flotation circuit • 200-tpd Pilot Plant being installed with expansion plans for 20157
    • NEW MINE DEVELOPMENT #1 OSCAR MINE • The high grade Oscar- Santa Lucia Zones are scheduled for production in late 2012 to replace the Chivo Mine where grades are dropping with depth OLD CUCHARA MINE • Oscar is a silver vein corridor on the southern extension of the past-producing Cuchara Mine NEW OSCAR MINE • Pre-existing Cuchara Mine SANTA LUCIA ZONE mining infrastructure will contribute to a low capital costs and rapid mine development at Oscar8
    • NEW MINE DEVELOPMENT #1 OSCAR MINE • Oscar and Santa Lucia host high grade veins as found in the following drill holes: OSCAR CORRIDOR DRILLING HIGHLIGHTS SANTA LUCIA ZONE DRILLING HIGHLIGHTS True True Drill Silver Gold Lead Zinc Drill Silver Gold Lead Zinc Width Width Hole (g/t) (g/t) (%) (%) Hole (g/t) (g/t) (%) (%) (m/ft) (m/ft) 31m / 1.4m / Z11-44 291 0.01 0.1 0.4 Z09-35 600 0.10 - - 101.7ft 4.6ft 7.5m / 6.3m / Including 780 0.02 0.4 1.1 Z09-47 278 0.01 0.2 0.7 24.6ft 20.7ft 5.8m / 3.2m / Including 398 0.03 0.2 0.9 Including 467 0.01 0.2 1.1 19.0ft 10.5ft 5.7m / 1.0m / Z11-46 1,007 0.07 0.5 1.1 Z09-50 602 0.02 0.1 0.1 18.7ft 3.3ft 2.8m / 2.4m / Including 1,128 0.51 0.9 1.4 Z09-53 419 0.03 0.3 0.3 9.2ft 7.9ft 1.1 / 1.1m / Including 4,580 0.26 1.7 4.0 Z09-55 372 0.01 0.1 0.2 3.6ft 3.6ft 6.6m / 2.1m / Z11-64 223 0.08 0.2 0.5 Z09-58 274 0.10 0.4 1.2 21.7ft 6.9ft 1.0m / 1.1m / Z11-74 1,875 0.74 2.7 6.9 Z10-03 588 0.05 0.4 2.0 3.3ft 3.6ft 23.4 / 1.7m / Z12-08 115 0.02 0.1 0.4 Including 394 0.07 1.1 1.6 76.8ft 5.6ft9
    • NEW MINE DEVELOPMENT #2 CAPIRE MINE Defined NI 43-101 Plant Open for Mineral Resources expansion Site Open for expansion Tailings Facility Capire Open for expansion Open Pit 3D Model Processing Plant Site Open-Pit Tailings Facility Capire Mine Site Capire Mine Open Pit Model • The Capire Mine represents a new production center in a new mining district • Three-phase strategy to bring Capire to full-scale production in 2015: o 2012: Construction of 200-tpd Pilot Plant and 5,000 m drill program o 2013: Pilot Plant production (~200,000 oz silver) to optimize operating parameters for expansion plans o 2014: Construction of full scale plant (800-1,500 tpd) with goal to produce 1M oz silver per year starting in 201510
    • CAPIRE PROJECT NI 43-101 MINERAL RESOURCE ESTIMATE Metal Content for Capire Project Ag (oz) Au (oz) Cu (lbs) Pb (lbs) Zn (lbs) Measured 3,529,969 14,146 3,389,275 18,234,678 46,140,820 Indicated 3,694,066 16,300 3,693,733 19,029,800 49,522,173 Measured & Indicated 7,224,035 30,446 7,083,007 37,264,478 95,662,993 Inferred 435,959 1,919 475,594 2,260,089 5,823,490 Summary Table Classified Mineral Resources – Measured + Indicated and Separate Inferred Domain Classification Tonnes Ag (g/t) Au (g/t) Cu (%) Pb (%) Zn (%) Capire Measured + Indicated 3,104,944 46.46 0.19 0.06 0.33 0.93 Aurora 1 Measured + Indicated 1,807,302 44.50 0.199 0.07 0.36 0.80 Grand Total Measured + Indicated 4,912,246 45.74 0.193 0.06 0.34 0.88 Grand Total Total Inferred 371,066 36.54 0.161 0.06 0.28 0.71 • Initial production planned on higher grade sections • Drilling is continuing at Capire and other nearby zones to expand mineral resources11
    • GEOLOGY METAL DISTRIBUTION IN ORE ZONES• Mineral zones in the Depth Length Mining Level Royal Mines of Zacualpan 500-1400ft (150-420m) District tend to be silver- 0 ft (0m) Silver-rich at top Oscar Mine rich near the top (commonly 1,000+ g/t) 200 – 1,000 g/t+ Ag Noche Buena Mine with increasing lead and zinc, and decreasing San Ramon Mine silver toward the bottom 500 ft (150m)• New discoveries indicate Lead & Zinc rich that significant gold and at bottom Chivo Mine copper may lie at depth 1,000 ft (300m) 60 – 150 g/t Ag Carlos Pacheco Typical Gold (Copper) Gold-Copper Zone Mining Width at depth 10 ft (3m) Host to high grade Gold 11
    • VALLE DE ORO GOLD POTENTIAL AT DEPTH • First gold-copper zone found by company prospectors in a canyon below known silver veins • Initial drill results on two zones returned high gold values (see tables below) • These initial results indicate a potential gold district lying at depths of 1,000 ft (300 m) below the silver district • Drilling will test gold targets at depth on other silver veins CARLOS PACHECO DRILLING HIGHLIGHTS HUATECOSCO DRILLING HIGHLIGHTS Drill True Width Gold Silver Copper Drill True Width Gold Silver Lead Zinc Hole (m/ft) (g/t /opt) (g/t) (%) Hole (m/ft) (g/t /opt) (g/t) (%) (%) 4.1 m / 5.22 g/t / 2.1 m / 11.3 g/t / Z11-48 30 0.7 1.8 Z08-65 18 - 13.5 ft 0.15 opt 6.9 ft 0.33 opt 0.8 m / 25.00 g/t/ 1.2m / 18.8 g/t / Including 50 0.5 1.6 2.6 ft 0.73 opt Including 24 - 3.9 ft 0.55 opt Z11-17 3.2 m / 3.44 g/t / 118 0.6 0.8 2.9 m / 19.6 g/t / 10.5 ft 0.10 opt Z08-68 68 0.29 9.5 ft 0.57 opt 1.8m / 3.53 g/t / Z11-19 321 0.4 0.6 5.9 ft 0.10 opt 1.0 m / 49.7 g/t / Including 59 0.31 9.5 m / 3.97 g/t / 3.3 ft 1.45 opt Z11-20 49 1.7 2.6 31.2 ft 0.12 opt 1.7 m / 31.1 g/t / Including 69 0.31 4.2 m / 6.96 g/t / 5.6 ft 0.91 Including 84 2.9 5.113 13.9 ft 0.20 opt
    • RAPID EXPLORATION TO MINE DEVELOPMENT • A cornerstone of IMPACT Silver’s success is rapid mine development to generate near-term cash flow • Since 2006, IMPACT’s successful team has discovered and built three new mines with two additional mines now under construction EXPLORATION AND MINE DEVELOPMENT PROCESS FLOWCHART: RESEARCH FIELD WORK DRILLING MINE DEVELOPMENT MINE Compile old Surface & Drilling in PRODUCTION mines/ underground phases Mine Planning, AND CASH prospects from sampling, based on Permitting and FLOW historic maps mapping success Construction • Capire (North) More than • Capire • San Ramon • Pilarica 2,700 old Select • Condesa & • Noche mine and areas and • Oscar Cuchara North Buena prospects prospects catalogued for drilling • Carlos Pacheco • Santa Lucia • Chivo to date • Huatecosco First Drill Hole to Production: 12 – 24 Months (Chivo, San Ramon Extensions, Noche Buena)14
    • ZACATECAS OPTION AGREEMENT DEFIANCE SILVER CORP. (TSX.V:DEF) • IMPACT Silver optioned its Santa Gabriela Processing Plant 200-tpd Santa Gabriela Processing Plant and ten mineral concessions in Zacatecas, Mexico to Defiance Silver for cash and a 16.5% share position (September 2011) • Defiance Silver plans to marry IMPACT’s processing plant with their San Acacio Silver Mine (18M oz Silver defined) and begin production in 2013 San Acacio Silver Mine15
    • ROYAL MINES OF ZACUALPAN SILVER PRODUCTION % Change 2011 2010 2009 2008 2007 2006 2006-2011 Total tonnes processed (t) 154,289 131,348 114,340 102,426 99,918 68,173 +126% Tonnes processed per day (t) 424 360 313 280 274 196 +116% Silver (oz) Production 833,607 750,259* 823,571 645,668 349,949 465,673 +79% Lead (t) Production 731 734 969 813 601 375 +95% Zinc (t) Production 1,248 1,212 1,098 1,053 976 725 +72% Revenue per production tonne sold $171 $123 $110 $90 - - +90% Direct cost per tonne sold $70 $63 $60 $55 $44 $60 +17% *Silver production was marginally down 9% in 2010 because the Company reduced the cut-off grade of the ore mined due to higher silver prices • Consistent organic growth with low-cost production • 2011 direct cost per tonne sold averaged $70 per tonne or $9 per ounce of silver net of lead and zinc credits16
    • CONSISTENTLY PROFITABLE % Change 2011 2010 2009 2008 2007 2006* 2006-2011 Revenue $24.3 $16.7 $12.2 $8.9 $7.3 $7.0 +247% Net Earnings $7.6 $3.4 $1.6 $.66 $.29 $.51 +1,390% Operating Cash Flow $10.2 $5.4 $3.7 $2.2 $1.9 $2.6 +292% Cash & Cash $30.8 $18.7 $5.3 $5.4 $10.1 $4.0 +670% Equivalents EPS $0.12 $0.07 $0.02 $0.01 $0.01 $0.01 +1,100% * Royal Mines of Zacualpan project purchased by IMPACT Silver in January 2006 Revenue $30,000,000 $25,000,000 $20,000,000 Net Earnings $15,000,000 $10,000,000 Operating Cash Flow $5,000,000 before changes in $- non-cash operating 2006 2007 2008 2009 2010 2011 capital*17
    • LONG-TERM VALUE PLAY FUNDAMENTAL DATA Recent 52 Wk $1.26- $1.40 Share Price Range $2.42 Basic – 68M Shares Avg Vol Fully Diluted – 120,000 Outstanding (3m) 73M Market Cap 95M Warrants Nil Largest Shareholders Sprott Asset Management,12% & Energold Drilling Corp,11% Share Price Performance, 3 Years Source: Stockwatch, May 2012 CAPITAL EXPENDITURE USE EFFICIENCY ($CDN)* Total funds raised since start Property payments, plant & equipment, Cash Position of operations in January, 2006 and exploration expenditures (Dec 31, 2011) $25 Million $38 Million $30.8 Million18
    • FUTURE PLANS AND GOALS 2012 • Maintain production while completing construction of two new mines at Oscar and Capire • Continue aggressive exploration to accelerate organic growth at the Royal Mines of Zacualpan • With $20M+ of unallocated cash and profitable production, pursue accretive merger and acquisition opportunities 2013-2015 • Double silver production with expansion of Capire Mine • Continue exploration and potential development of a deep gold district beneath the Zacualpan silver district19
    • ROYAL MINES OF ZACULAPAN LONG TERM STRATEGY To become a Multimillion Ounce Silver Producer with Multiple Processing Centers 1. Guadalupe Production Centre • Oscar Silver Mine scheduled for production in late 2012 • Current ore feed from San Ramon, Noche Buena and Chivo Mines 1 2. Capire Production Centre • Initial production through 200-tpd pilot plant, scheduled for late 2012 • Expansion to full scale plant planned for 2015 3. Valle de Oro Gold and Silver Area • Area of many silver veins with gold 3 mineralization at depth • Large drill program underway • Potential site of a third processing plant 2 4 4. Southeast Exploration Area • Currently mapping numerous old mine workings, early stage exploration20
    • THANK YOU Contact Us Telephone: 1 604 681 0172Email: inquiries@impactsilver.com www.impactsilver.com