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  • 1. 1
    South American Silver
    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
    July 2010
    Phone: 303.584.0606
    www.soamsilver.com
  • 2. 2
    Important Information Regarding 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.
  • 3. 3
    Investment Highlights
    South American Silver Corp
    • Management team with track record of market value creation, discovery and advancement of large projects, and key operational/process expertise
    • 4. Well established “early mover” competitive advantage with 15 years in-country expertise in a re-emerging world class district with few exploration/development stage competitors
    • 5. 100% owned, diversified portfolio of projects within well defined mining districts with existing road and nearby power infrastructure
    • 6. Bulk mineable, sediment hosted silver and indium deposit with exceptional regional expansion potential and positive low cost, heap leach characteristics
    • 7. Large scale, Copper-Gold project in resource definition/expansion phase
    • 8. Well defined, near term business plan to drive value from early development stage to feasibility stage with multiple pathways to achieve additional increased shareholder value from production multiples and valuations
    • 9. Leveraged to silver with over 5 oz or $100 of silver per share
    • 10. Exposure to the niche strategic metal sector with new and growing industrial applications for indium and compelling supply/demand dynamics and few primary suppliers
    • 11. Attractive investment value relative to peers at low value per oz
    • 12. Strong focus on approaches to mitigate execution risks while maximizing value creation such as an early, effective community relations programs and staged stakeholder engagement strategy
  • 4
    Investment Highlights
    South American Silver Corp Projects:
    • MalkuKhota: One of the World’s Largest Silver-Indium Deposits
    • 13. Resource: Indicated: 145 M oz of silver & 845,000 kg of indium
    Inferred: 178 M oz of silver & 968,000 kg of indium
    • 100% owned, road accessible project, long life open pit mine, with projected low capital and operating costs and high internal rate of return
    • 14. Ongoing drill campaign with recent higher grade discovery
    • 15. Updated and expanded resource fall 2010
    • 16. Updated Preliminary Economic Assessment with increased throughput by end 2010
    • 17. Potential to be one of the top primary silver and indium producing mines
    • 18. Escalones: Copper-Gold Porphyry Deposit, Chile
    • 19. 100% owned, road accessible, large scale system in world-class
    copper mining district, including El Teniente, one of the world’s
    largest underground copper mines
    • Limited historic drilling shows >1% copper grades at surface and
    potentially large untested porphyry system grading 0.6% copper
    with additional significant gold, silver and molybdenum credits
    • Potential to rapidly advance to a significant defined resource
    MalkuKhota
    Escalones
  • 20. 5
    Share Capitalization
    TSX-SAC, US OTC: SOHAF
    Issued & Outstanding
    Fully Diluted1
    Warrants
    Options
    67.4M
    7.2M
    82.5M
    8.0M
    • Recent share price range C$0.55 to C$0.68 Pre-Resource IPO 2007
    • 21. July 19th Financing $0.63 unit of a share and ½ warrant
    • 22. 52 week range $0.29 to $0.81
    • 23. C$8 million in cash plus cash equivalents1
    • 24. 30% closely held by Swiss investors from IPO
    • 25. 20% owned by SASC Management
    • 26. US OTC QX Listing process initiated to increase visibility and liquidity
    (1) As of June 30, 2010 with completion of recent $4 million equity financing
  • 27. 6
    Relative Stock Performance
    SASC vs. various silver and gold indices
    • South American Silver outperforming key gold and silver indices
    • 28. Liquidity increasing with recent catalysts
    • 29. Drilling underway for updated resource and PEA in 2010
  • 7
    Comparative Resources in the Americas
    Second largest development stage silver project
    Millions of Silver Ounces
    Source: Canaccord as of May 18, 2010
    Note: All companies have projects in South and/or North America
  • 30. Enterprise Value in the Americas
    Recent resource, not yet well-known in the market place
    Enterprise Value Per Ounce of Resource
    Source: Canaccord as of May 18, 2010
    Note: All companies have projects in South and/or North America
    8
  • 31. The Development Stage Value Curve
    Maximum phase of increased value creation 5x to 10x growth potential with successful transition from resource definition to feasibility stage
    Increased Enterprise Value per Oz by Stage
    • Market re-pricing of value per ounce with reduction of technical risk as project advances stage to stage
    • 32. Multiplier effect with expansion of resource base through exploration
    • 33. Leverage to rising metal prices with increased market value for resource
    • 34. Potential for Take-Over premiums for large resources attractive to the producers for reserve replacement and growth
    Increased value with project advancement
    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.
    9
  • 35. 10
    Silver Fundamentals Bullish
    Leveraged to gold
    • The secular bull market for silver remains in place
    • 36. Silver has had a 95% correlation to movement in gold since 2005
    • 37. Silver is currently undervalued relative to its historic ratios with gold
    • 38. Silver generally mirrors and amplifies the price moves in gold due to the smaller size of market, and lower relative above-ground supply
    • 39. Silver equities generally show a 3-5x leverage to silver price moves due to profit margins
  • 11
    Silver Fundamentals Remain in Place
    For continued higher prices
    • Global monetary policy has accelerated inflationary pressures
    • 40. Prices for silver remain well below historical highs
    • 41. Bullish supply/demand outlook with global supply flat to declining and rising demand
    • 42. Resumption of increased industrial demand trend likely with economic rebound
    • 43. Numerous new uses for silver in development: medical, electrical & catalysts
    • 44. Dollar value of nearly every category of silver demand still growing with population growth and as developing countries increase standard of living
    • 45. Industrial silver is generally consumed, creating sustained demand growth
    • 46. Investment and industrial demand for silver continues to increase
    • 47. Investment demand remains a key price driver as investors look for a safe store of value and hedge against inflation
    • 48. ETFs have become a major new source of investment demand
    • 49. Private investors now own more precious metals than central banks
    • 50. Annual mine production vs demand remains in short-fall 150-200M oz
    • 51. Government sales have previously supplied 60-90 M oz/year
    • 52. Both Government sales and scrap have been continuing to fall
    • 53. US Government’s strategic silver stockpiles have been exhausted, now buying silver for coin production
    • 54. Few new major deposits have been discovered in recent years
    • 55. Projected new production by analysts have failed to have been realized
  • World Silver Supply/Demand Fundamentals
    Bullish fundamentals based on continued strong investment demand and anticipated rebound in industrial demand
    Steady overall demand despite economic fall off on industrials with increased investment demand – Resumption of increased industrial demand trend likely
    Falling total supply with decreased gov’t and scrap sales
    Source: GFMS World Silver Survey 2010
    12
  • 56. Indium Supply/Demand & Usage
    Rapidly growing use of a key high-technology metal
    Major Indium uses due to its unique electrical and optical properties
    • Indium-tin oxide (ITO) a key component of LCD and Plasma TV’s and displays
    • 57. High-efficiency thin film solar panels (CIGS Photo-Voltaics), and LED lighting
    • 58. Fiber optics, specialized and transparent semiconductors
    Indium Supply/Demand dynamics
    • Indium highlighted in UN study as a key specialty metal at risk of demand shortfall due to rapidly increasing growth, low recycling rates and low primary production
    • 59. China is largest producer of indium and has imposed export quotas and tariffs like other key high-technology specialty metals
    • 60. Global use growing rapidly – doubling in past 2 years and could surpass available supply from by-product production at current price range
    • 61. Production is largely by-product of zinc with few primary producers
    • 62. World consumption estimated at 1,200 to 1,400 tonnes in 2010 up 2x from 2008 and up more than 10x from 1990
    • 63. Current price ~$650/kg with five-year prices from $400/kg to over $1000/kg
    Malku Khota Annual Indium Production (at 20,000 tonnes/day)
    • Range: 20,000-60,000 kgs/year
    • 64. Malku Khota projected to be one of the worlds largest indium producers
    • 65. Potential to represent 10% or more of global mine supply
    • 66. Teck Resources is currently world’s largest producer of indium at ~50,000 kgs/year
    13
  • 67. 14
    Bolivia
    An emerging resource-based market economy
    • Bolivia has the fastest growing economy in Latin America
    • 68. Fastest growing GDP in Latin America with robust internal growth
    • 69. Best economy in 30 years under the Morales Administration
    • 70. Growing double-digit trade surpluses and dramatically reduced inflation rates
    • 71. Recent Bond rating upgrade by Moodys (B2) and Fitch (B) citing easing of political tensions and accumulation of foreign-exchange reserves
    • 72. One of the least explored and most prospective geological environments in South America, with billions of ounces of historical silver production
    • 73. Three major new silver mines completed in past 3-4 years including 2 of the world’s largest primary silver producers boosting Bolivia to rank 5th in global silver production
    • 74. Pan American Silver- San Vincente2.6 Moz/yr mine, production began Q1 2009
    • 75. Coeur D’Alene- San Bartolome7.5 Moz/yr silver mine, production began in 2008
    • 76. Sumitomo - San Cristobal 18 Moz/yr silver mine, production began in 2007
    • 77. Other companies making substantial investments in Bolivia
    • 78. Jindal Steel of India investing US$2.3 billion for 50% interest in El Mutun iron ore deposit One of the world’s largest iron ore deposits—all permits have been issued for production
    • 79. Petrobrasof Brazil—Latin America’s largest publicly traded oil company – investing US$1 billion of new capital into the Bolivian gas fields
    • 80. Repsolof Spain investing $1.6 billion to increase gas production in Bolivia
  • 15
    Bolivian Silver Mines
    One of the World’s Premier Silver Mining Districts
    • Historical production of billions of ounces of silver
    • 81. Three major new silver mines completed in the past 3-4 years including 2 of the world’s largest primary silver producers
    • 82. Highly prospective and under-explored relative to the continuation of belt in Peru, Chile and Argentina
    • 83. Ambitious $32 billion 5-7 year infrastructure build-out plan by Bolivian government for new rail and road corridors and hydropower generation
  • Malku Khota Project, Bolivia
    One of the world’s largest undeveloped silver-indium projects
    Ownership: 100%
    Elevation: 3,800m-4,200m
    Location: Road accessible, 100km South of Cochabamba, Bolivia
    World-class silver-indium deposit:
    • Silver Indicated: 145M oz of Ag @ 29.7 g/t
    Inferred: 178M oz of Ag @ 24.0 g/t
    • Indium Indicated: 0.8M kg of In @ 5.6 g/t
    Inferred: 1.0M kg of In @4.2 g/t
    Average grade first ten years:
    • Silver: 38.6 g/t (60 g/t Ag Eq)
    • 84. Indium: 8.1 g/t
    Low capital and operating costs, because asset is road
    accessible and heap leachable
    16
  • 85. 17
    Malku Khota - Limosna Ridge
    MalkuKhota sandstone
    With disseminated
    Silver Indium Lead Zinc and Copper
    Enrichment starts at surface on top of ridge
  • 86. 18
    Malku Khota
    Location of
    photo
    Geology and Land
    10 km
  • 87. 19
    Malku Khota
    High Grade Sandstone1160 g/t Silver
    Geologic Formations Looking South from Limosna
    WaraWara
    Sandstone
    MalkuKhota
    Sandstone
    Aroifilla Fm
  • 88. 20
    Malku Khota
    Drill Results—grade thickness map
    • Approximately 100 drill holes in resource
    • 89. Mineralization begins at surface
    • 90. Deposit open along trend and down dip with higher grade zones current focus
    • 91. New discovery of higher grade Sucre Vein System discovered between the two PEA modeled pits
    Indicated Resource
    145M oz silver & 845,000 kg indium
    Inferred Resource
    178M oz silver & 968,000 kg indium
  • 92. 21
    Malku Khota
    Flow Sheet—Acid-Chloride Leach
    • Acid leach process similar to that used for SX-EW copper oxide heap leach deposits and for Rare Earth Element processing
    • 93. Parallel metallurgical testwork for cyanide leach
    • 94. Production of high purity silver bars and indium ingots on site
    • 95. Additional production of by product base metals including lead, zinc and copper
    Gyratory Crusher
  • 96. 22
    Malku Khota
    Summary of Preliminary Economic Assessment in US dollars (March 2009)
    Pincock, Allan and Holt
    Heap Leach Operation
    Base Case Silver Price: US$13.30/oz
    Base Case Indium Price: US$530/kg
    * First 10 years of production
  • 97. 23
    Malku Khota
    Economic assessment sensitivities
    Base Case Silver Price: US$13.30/oz (2-year average price at March 2009)
    Base Case Indium Price: US$530/kg
  • 98. 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
    24
    Source: GFMS World Silver Survey 2010
  • 99. Near Term Mine Development Projects
    South American Silver one of the largest near term producers
    Annual Estimated Potential Production of New Development Projects
    With Production anticipated in the next 2 to 4 years
    *MalkuKhota at 20K tpd production level
    Barrick
    25
    ~
    ~
    Bear Creek
    So American Silver
    Millions of Ounces
    Fresnillo Plc
    Pan American
    Andean Resources
    Alexco Resource Corp
    Gold Resource
    Minmetals, Jiangxi Copper
    Bear Creek
    Wildcat Silver Corp
    Fortuna Silver
    Augusta Resource
    Yukon Zinc Corp.
    Silvermex Resources
    Greystar Resources
    Antofagasta plc
    Gabriel Resources
    CobarConsilidated
    China Minmetals
    Oxiana
    Norsemont Mining
    Chariot Resources
    Antofagasta plc
    Jinchuan Group
    Intrepid Mines
    Vale
    25
    Source: CPM Silver Yearbook 2010
  • 100. 26
    Escalones Copper Gold Project, Chile
    High potential, large-scale target
    • Ownership: 100% Elevation: 3,400 to 4,000 m
    Location: 100km southeast of Santiago, Chile accessible by road
    with water access and gas pipeline across property
    • World-class copper district 35 kms east of El Teniente, world’s largest underground copper mine
    • 101. High grades at surface at over >1% copper with significant gold and molybdenum
    • 102. Large scale porphyry target Drill intercept of 176 m @ 0.6% copper
    • 103. Interest from several parties to Joint Venture
  • 27
    Escalones
    Geological Cross-Section
    • Similar geological setting to huge El Teniente Copper porphyry mine 35 kms to the west
    • 104. Escalones Alto: Plus 100 metres of >1% Cu in skarn (ES 5)
    • 105. EscalonesBajo: Surface channel samples with > 1% copper over 60 m
    • 106. Limited drilling in porphyry indicating potential for large-scale system
  • Escalones
    Drill Results
    28
  • 107. 29
    Escalones
    The colored 3D contours that look like hills are evidence
    for sulphides being present. Escalones Alto is the area
    where we drilled the skarn and the Meseta is the area
    to be drilled by Phelps Dodge.
    Self Potential Geophysics
  • 108. 30
    Community Relations & Corporate Social Responsibility
    A key to successful project development
    Early Focus on Community Relations and CSR to reduce development risk
    • Over 100 yearscombinedexploration/projectmanagementexperiencewithover15 yearsdirect in-country Bolivianexperience
    • 109. CSR Strategy has involved local communitiesfromprojectinception
    • 110. The Company has signed agreements of cooperation with each of its local communities
    • 111. The BSR Group (Business for Social Responsibility) isassisting in thedevelopment of a proactiveCommunityRelationsprogramthatrepresentsallstakeholdersforthetransitionfromexplorationtodevelopment & production
    • 112. Ongoingcommuncationwith local communitiestomaintain open and transparentrelationship and toidentifypotentialdevelopmentdesignissuesearly in theprocess
    • 113. CommunityRelations Managers are businesspeoplefromtheregionwhospeak local indigenouslanguages
    • 114. Key objectiveswillbeto facilitate local economic development throughbuildingservicebusiness and local workercapacitybeginning at explorationstageincreasing as theprojectdevelopsthroughtoproduction
  • 31
    Comparative Silver Ounces Per Share
    One of the highest levels of silver exposure per share
    Ounces Per Share of Silver
    Source: Canaccord as of May 18, 2010
    Note: all companies have projects in South and/or North America
  • 115. 32
    Comparative Investment Silver Value
    SASC backed by nearly $150 of Silver
    Value of Silver Per Dollar Invested
    Source: Canaccord as of May 18, 2010
    Note: all companies have projects in South and/or North America
  • 116. Investment Highlights and Milestones
    Value Drivers over the next 6-9 months
    World Class scale projects with excellent expansion potential
    Growing shareholder value through resource expansion and advancing projects up the development value curve toward feasibility
    MalkuKhota Silver and Indium Project, Bolivia
    • Drill campaign underway with recently announced higher grade discovery
    • 117. Updated and expanded resource estimate targeted fall 2010
    • 118. Updated Preliminary Economic Assessment at higher throughput by end 2010
    Escalones Copper and Gold porphyry project, Chile
    • Potential to quickly move project to resource definition stage
    • 119. Data compilation and geological modeling underway to develop priority targets
    • 120. Planning work initiated for potential initial drill campaign fall 2010
    Continued investor outreach to broaden market awareness of company
    Leveraged to silver with over 5 oz or $100 of silver per share
    Exposure to rapidly growing Indium high-technology market
    Potential new value from copper resource definition and expansion
    Attractive investment value relative to peers at low value per oz
    Track record of discovery and successful project development
    33
  • 121. 34
    Management Team
    Track Record of World-Class Discovery and Successful Project Development
    Greg Johnson, President and CEO
    • Global mining industry experience in corporate finance, project development and exploration
    • 122. Co-founder of NovaGold, key role in growing company from $50 million to $2 billion market capitalization
    • 123. Recognized for discovery and advancement of the 40 M oz Donlin Creek gold deposit for NovaGold and Barrick
    Ralph Fitch, Executive Chairman
    • Co-founder of South American Silver, High Desert Gold, and General Minerals, decades of experience in global exploration, including Chief Geologist with Chevron minerals
    • 124. Key role in discovery of Collahuasi copper porphyry , MalkuKhota, Vizcachitas, and Escalones deposits
    Felipe Malbran, Vice President of Exploration
    • Extensive experience in exploration management in Bolivia, Chile, Peru and Argentina including former VP Exploration for General Minerals and Cominco senior geologist for South America
    • 125. Key role in discovery of MalkuKhota, Vizcachitas, and Escalones deposits
    Richard Doran, Vice President
    • Former VP Investor Relations for General Minerals and Marketing Manager for Chevron Resources
    William Filtness, Chief Financial Officer
    • Chartered Accountant with twenty plus years of financial experience, including Manager, Corporate Development at Aurizon Mines
    David Dreisinger,Vice President of Metallurgy
    • Professor and Industrial Research Chair in Hydrometallurgy at the University of British Columbia (UBC)
  • Board of Directors
    Ralph Fitch, Executive Director Greg 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.
    35
  • 126. 36
    South American Silver
    TSX: SAC, US OTC: SOHAF
    Greg Johnson
    President & CEO
    Phone: 303.584.0606
    www.soamsilver.com