VALUE.GROWTH.VISION<br />Growing and advancing one of the world’s largest undeveloped silver and indium resources.<br />TS...
Cautionary Notes<br />2<br />Certain statements contained herein constitute “forward-looking statements.”  Forward-looking...
Investment Highlights<br />3<br />South American Silver Corp.<br /><ul><li>Experienced management team with track record o...
Two large-scale deposits in South America
Malku Khota: one of the world’s largest silver-indium-gallium resources
Escalones: high potential copper-silver-gold deposit
Updated 2011 PEA study doubles estimated production to 13.2 M oz silver, 80 tonnes of indium and 15 tonnes of gallium per ...
Measured and Indicated resources expanded 60% to 230 M oz silver
Well definedbusiness plan to drive shareholder value
Leveraged to silver nearly 4 oz of silver per share (6 oz silver equivalent)
Attractive investment value relative to peers at low value per oz
Exposure to the high-tech indium and gallium market
Potential value from new copper-silver-gold resource
Strong focus on community relations
Well financed into feasibility</li></li></ul><li>World-Class Deposits<br />4<br />Two large-scale assets in South America ...
Low capital and operating costs as a heap leach or milling operation
Update resource increases M&I 60% to 230 M oz silver
Pre-Feasibility process started in 2011 & Feasibility in 2012
Resource expansion potential with only 4 km of 50 sq km </li></ul>    property drill tested<br /><ul><li>Potential to be o...
Funded into Feasibility</li></ul>Escalones, copper-silver-gold project, Chile (100%)<br /><ul><li>Large scale target in wo...
Exploration program and geophysics underway
Resource definition program in 2011
Potential significant copper, silver, gold deposit</li></ul>*AgEq=total contained metal<br />
Share Capitalization2<br />5<br />TSX:SAC, US OTC:SOHAF<br />Issued & Outstanding<br />Warrants<br />Fully Diluted2<br />O...
Private investors--18%
Management3 --15%</li></ul>Institutional Ownership<br /><ul><li>Sprott Asset Management
Front Street
K2 funds
Kudu Partners
 ~$200 million Market Capitalization (1)
 Average 3 mo. trading volume +500,000 shares/day
Well financed with +$30 million in cash(2)
Potential US listing to increase visibility and liquidity</li></ul>(1)  As of July 18, 2011, (2) As of June 30, 2011 <br /...
Adding Value Through Resource Growth<br />6<br />
Comparative Silver Resources in the Americas<br />7<br />Second largest development stage silver resource<br />Additional ...
Enterprise Value per Silver Resource Oz <br />8<br />Producer Average <br />>$24/oz<br />By project development stage<br /...
Development Stage Value Curve<br />9<br />Potential value growth with project advancement<br />Production<br />Average Ent...
Current Silver Company Market Valuations                                    by Resource Size  & Development Stage<br />Siz...
Positive Silver Fundamentals<br />11<br />A paradigm shift for silver?<br /><ul><li>Major shift in supply/demand dynamic o...
Silver still well below inflation adjusted highs of $140/oz ($50 in 1980)
Silver is a “hybrid” precious and industrial metal due to its scarcity and unique properties including superior electrical...
Price increases driven by 40% increase in investment demand and 21% increase in industrial demand for a total increase of ...
Total annual mine production growth only 2.5% last year with reduced contribution of by-product silver from copper and gol...
Projected new mine supply anticipated to be consumed by new industrial demand through at least 2015
Chinese imports up 4x since 2009 with change from net sellers of more than 100 M oz of silver in 2005 to net buyers of mor...
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SAC September 2011 Corporate Presentation

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SAC September 2011 Corporate Presentation

  1. 1. VALUE.GROWTH.VISION<br />Growing and advancing one of the world’s largest undeveloped silver and indium resources.<br />TSX: SAC, US OTC: SOHAF<br />Corporate Presentation<br />September 2011<br />www.soamsilver.com<br />
  2. 2. Cautionary Notes<br />2<br />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. Investors are advised to review the Company’s Annual Information Form filed at www.sedar.com for a detailed discussion of investment risks. 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.<br />
  3. 3. Investment Highlights<br />3<br />South American Silver Corp.<br /><ul><li>Experienced management team with track record of successful project development and value creation
  4. 4. Two large-scale deposits in South America
  5. 5. Malku Khota: one of the world’s largest silver-indium-gallium resources
  6. 6. Escalones: high potential copper-silver-gold deposit
  7. 7. Updated 2011 PEA study doubles estimated production to 13.2 M oz silver, 80 tonnes of indium and 15 tonnes of gallium per year, for first 5 yrs
  8. 8. Measured and Indicated resources expanded 60% to 230 M oz silver
  9. 9. Well definedbusiness plan to drive shareholder value
  10. 10. Leveraged to silver nearly 4 oz of silver per share (6 oz silver equivalent)
  11. 11. Attractive investment value relative to peers at low value per oz
  12. 12. Exposure to the high-tech indium and gallium market
  13. 13. Potential value from new copper-silver-gold resource
  14. 14. Strong focus on community relations
  15. 15. Well financed into feasibility</li></li></ul><li>World-Class Deposits<br />4<br />Two large-scale assets in South America <br />Malku Khota, silver-indium project, Bolivia (100%)<br /><ul><li>Bulk mineable open-pit, sediment hosted deposit
  16. 16. Low capital and operating costs as a heap leach or milling operation
  17. 17. Update resource increases M&I 60% to 230 M oz silver
  18. 18. Pre-Feasibility process started in 2011 & Feasibility in 2012
  19. 19. Resource expansion potential with only 4 km of 50 sq km </li></ul> property drill tested<br /><ul><li>Potential to be one of the top producing silver and indium mines
  20. 20. Funded into Feasibility</li></ul>Escalones, copper-silver-gold project, Chile (100%)<br /><ul><li>Large scale target in world-class mining district near El Teniente
  21. 21. Exploration program and geophysics underway
  22. 22. Resource definition program in 2011
  23. 23. Potential significant copper, silver, gold deposit</li></ul>*AgEq=total contained metal<br />
  24. 24. Share Capitalization2<br />5<br />TSX:SAC, US OTC:SOHAF<br />Issued & Outstanding<br />Warrants<br />Fully Diluted2<br />Options<br />117.9M<br />6.8M<br />10.6M<br />100.3M<br />Major Shareholders <br /><ul><li>Zamin—19%
  25. 25. Private investors--18%
  26. 26. Management3 --15%</li></ul>Institutional Ownership<br /><ul><li>Sprott Asset Management
  27. 27. Front Street
  28. 28. K2 funds
  29. 29. Kudu Partners
  30. 30. ~$200 million Market Capitalization (1)
  31. 31. Average 3 mo. trading volume +500,000 shares/day
  32. 32. Well financed with +$30 million in cash(2)
  33. 33. Potential US listing to increase visibility and liquidity</li></ul>(1) As of July 18, 2011, (2) As of June 30, 2011 <br />(3) Fully diluted basis <br />
  34. 34. Adding Value Through Resource Growth<br />6<br />
  35. 35. Comparative Silver Resources in the Americas<br />7<br />Second largest development stage silver resource<br />Additional value of Indium and Gallium<br />Inferred Resources<br />M&I Resources<br />Millions of Silver Ounces<br />Mexico<br />Peru<br />Mexico<br />El Salvador<br />Yukon<br />(Canada)<br />Mexico<br />Peru<br />Mexico<br />Mexico<br />Mexico<br />Nunavut<br />(Canada)<br />Guatemala<br />Bolivia<br />Chile<br />Peru<br />Source: Canaccord Report resource numbers as of January 11, 2011<br />Note: All companies have projects in South and/or North America<br />
  36. 36. Enterprise Value per Silver Resource Oz <br />8<br />Producer Average <br />>$24/oz<br />By project development stage<br />EV of >$0.80 base on 230.3 million M&I oz Ag<br />Advanced Development Stage Average ~$7/oz<br />Development Stage <br />Average ~$4/oz<br />Source: Canaccord & Intierra as of June 9, 2011,<br />Note: All companies have projects in South and/or North America<br />
  37. 37. Development Stage Value Curve<br />9<br />Potential value growth with project advancement<br />Production<br />Average Enterprise Value per Oz of Silver by Stage<br />Take-Over offers or Partnerships common at this stage<br />$24/oz<br />Construct<br />Increased value through resource expansion <br />Permits<br />FS<br />Increasing Market Value<br />$7/oz<br />PFS<br />Resource<br />Definition<br />PEA<br />$4/oz<br />Advanced<br />Development Stage (Reserves)<br />Early Stage<br />Exploration & Development<br />Production<br />Discovery<br />Increasing value with project advancement<br />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.<br />
  38. 38. Current Silver Company Market Valuations by Resource Size & Development Stage<br />Size of circle represents market valuation premium in EV/oz<br />10<br />Developers<br />Producers<br />Adv. Developers<br />500<br />SAC<br />SAC<br />SAC<br />US Gold<br />$2,000<br />$1,000<br />Total Resource Ag Equivalent using (Ag +Au only at $25/oz and $1000/oz values) <br />Source: Canaccord Report July, 2011 and Intierra, July, 2011<br />Share prices as of Sept 7 2011,<br />Note: All companies have projects in South and/or North America<br />
  39. 39. Positive Silver Fundamentals<br />11<br />A paradigm shift for silver?<br /><ul><li>Major shift in supply/demand dynamic over past several years
  40. 40. Silver still well below inflation adjusted highs of $140/oz ($50 in 1980)
  41. 41. Silver is a “hybrid” precious and industrial metal due to its scarcity and unique properties including superior electrical and thermal conductivity, malleability, reflectance, and catalytic/biologic reactivity
  42. 42. Price increases driven by 40% increase in investment demand and 21% increase in industrial demand for a total increase of 17% in 2010
  43. 43. Total annual mine production growth only 2.5% last year with reduced contribution of by-product silver from copper and gold production
  44. 44. Projected new mine supply anticipated to be consumed by new industrial demand through at least 2015
  45. 45. Chinese imports up 4x since 2009 with change from net sellers of more than 100 M oz of silver in 2005 to net buyers of more than 120 M oz in 2010
  46. 46. Few major new deposit discoveries and growing time lag from time of discovery to metal production</li></ul>Source: 1) GFMS World Silver Survey 2011<br />2) BMO Capital Markets Global Mining Research April 2011<br />
  47. 47. Silver Supply/Demand Fundamentals<br /><ul><li>Dramatically increased demand growth driven by strong investment demand plus increased industrial consumption(1)
  48. 48. Demand growth expected to continue to outstrip production growth(2)</li></ul>+17% total demand growth<br />+8% total supply growth<br />+40% investment demand<br />+2.5% mine production<br />+21% industrial demand<br />Source: 1) GFMS World Silver Survey 2011<br />2) BMO Capital Markets Global Mining Research April 2011<br />12<br />
  49. 49. Growing World Investment Demand For Silver<br />13<br />Source: GFMS World Silver Survey 2011<br />
  50. 50. Growing Demand for Silver in Technology<br />14<br />Breakdown of key technology/industrial uses for silver<br />Millions of Silver Oz<br />Source: CPM Silver Yearbook 2010<br />Not for reproduction without written CPM Group consent<br />
  51. 51. Thin Film/Thick Film Demand Growth<br />15<br />Growing demand in solar technology<br />PV related silver consumption<br />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<br />
  52. 52. Silver Primary & By-Product Production(1)<br />16<br /><ul><li>70% of silver is by-product production from base metals and gold
  53. 53. By-product silver production is largely silver price inelastic
  54. 54. Reduced by-product silver production anticipated going forward from base metals(2)</li></ul>Source: 1) GFMS World Silver Survey 2005-2011<br />2) BMO Capital Markets Global Mining Research April 2011<br />
  55. 55. Indium & Gallium – Two Key Strategic Metals<br />17<br />Rapidly growing market for high-tech uses <br />Uses<br /><ul><li>Indium-tin oxide (ITO) a key component of flat panel displays (FPDs) and touch screens
  56. 56. High-efficiency CIGS (copper, indium, gallium, selenide) photo-voltaic thin-film solar panels, and LED lighting
  57. 57. Fiber optics, specialized and transparent semiconductors</li></ul>Supply<br /><ul><li>Global indium use growing rapidly and could surpass available supply from by-product zinc refining at current price range
  58. 58. One of the most scarce strategic metals due to low recycling and few primary producers</li></ul>TSX:SAC<br />US OTC:SOHAF<br />
  59. 59. Indium & Gallium Fundamentals<br />18<br />Compelling supply/demand dynamics <br />Indium and Gallium Supply/Demand dynamics<br /><ul><li>Indium and gallium highlighted in UN and US DOE studies as a critical technology metals in potential shortage, along with several key rare earth metals, due to rapidly increasing growth, low recycling rates and low primary production
  60. 60. China is largest producer and consumer of indium and has imposed export quotas and tariffs like other key high-technology specialty metals
  61. 61. Indium market estimated to see 15-20% annual growth with most indium produced as by product of zinc refining growing at 1-3% annually
  62. 62. Current indium and gallium price ~$900-1000/kg up from global economic lows during 2008-2009 of $400-500/kg
  63. 63. Gallium market estimated to be a conservative 15% annual growth rate which could increase significantly with more rapid growth in LED lighting and photovoltaics</li></ul>Malku Khota annual indium and gallium production<br /><ul><li>Malku Khota projected to be one of the world’s largest indium & gallium producers (80 tonnes and 15 tonnes per year)
  64. 64. Potential to represent 10% or more of global mine supply of indium and over 5% of global supply for gallium
  65. 65. Opportunities for project financing from off-take agreements for indium & gallium </li></ul>Sources: (1) US Dept. of Energy Critical Materials Strategy, Dec. 2010. (2)United Nations Environment Programme (UNEP) Special Report on Strategic Metals ,May 2011 .<br />
  66. 66. 19<br />Indium Supply<br />Mine Production and Refining<br />Source: 1)Roskill ‘s Indium:Global Industry Markets and Outlook ,2010<br />BLEU: Belgium, Luxembourg Economic Union<br />
  67. 67. Indium Demand Growth<br />20<br />Growing demand in high-tech markets<br />5 year projected demand growth <br />End-use Market Demand (tonnes)<br />2010 total indium production level<br />Growth assumptions based on data from Displaybank in LCD TV Association “LCD TV Matters”-Volume 3, Issue 2, February 2010 , Strategies Unlimited, August 2009 , Solarbuzz, Photon International, GFMS , Nanomarkets, and the US Department of Energy Critical Minerals Strategy Report December 2010<br />
  68. 68. Indium Fundamentals<br />World indium demand vs price (1969-2011*)<br />Indium Demand<br />Current Indium Price<br />X<br />Indium Price/kg ($US)<br />Source: (1) Indium: Global Industry Markets and Outlook, 9th Edition 2010 (Roskill) *2011-2013 Data are estimates (2) 2011-2015 Estimates US Dept. Of Energy Critical Materials Strategy Dec. 2010.<br />16<br />
  69. 69. Silver Mines in Bolivia<br />22<br />One of the world’s premier silver mining districts<br /><ul><li>Historical district production of billions of ounces of silver
  70. 70. Highly prospective & under-explored
  71. 71. Increase from 9th largest global silver producer to 5th largest with completion of three major silver mines in past four years:
  72. 72. Pan American Silver – San Vicente
  73. 73. Coeur D’Alene - San Bartolome
  74. 74. Sumitomo - San Cristobal</li></ul>TSX:SAC<br />US OTC:SOHAF<br />
  75. 75. Opportunity in Bolivia<br />23<br />An emerging resource based economy<br /><ul><li> Bolivian government encouraging private investment
  76. 76. Member of Mercosur Regional trade organization with Brazil as largest trading partner
  77. 77. Government bond ratings upgraded by Moody’s & Fitch
  78. 78. Mining second largest economic sector
  79. 79. One of the world’s premier silver districts with billions of ouncesof silver production
  80. 80. Planned $32 billion 5-7 year infrastructure build-out by Bolivian government for new rail and road corridors and hydropower generation
  81. 81. Three Major silver mines built within last four years by Pan American Silver, Coeur D’Alene, and Sumitomo
  82. 82. Substantial resource industry investments in Bolivia
  83. 83. Jindal Steel of India investing US$2.1 billion in giant El Mutun iron ore deposit
  84. 84. Petrobras of Brazil—Latin America’s largest publicly traded oil company – investing US$1 billion of new capital into the Bolivian gas fields
  85. 85. Repsol of Spain investing $1.6 billion to increase gas production in Bolivia
  86. 86. Petrobras and Repsol have announced new exploration initiatives in Bolivia in early 2011
  87. 87. Recently announced investments by Chinese and South Korean companies to develop lithium resources</li></ul>TSX:SAC<br />US OTC:SOHAF<br />
  88. 88. Malku Khota Project<br />24<br />One of the world’s largest silver-indium resources<br /><ul><li>50 square km, 100% owned, road accessible project
  89. 89. Low capital and operating costs on a per ounce basis
  90. 90. Potential to be one of the top primary silver and indium producing mines at 13.2 M oz silver per year and 80 tonnes of indium1
  91. 91. Project base case annual Cash flows and NPV’s more than doubled
  92. 92. 60% expansion of Measured and Indicated Resources2
  93. 93. Pit model 80% M&I resources for conversion to reserves with PFS
  94. 94. Excellent resource expansion potential with just 4 km tested of trend
  95. 95. Moving into Pre-Feasibility in 2011 and Feasibility in 2012</li></ul>Malku Khota Project – 2011 Resource Estimate Update<br />Average for the first 5 years of production<br />See March 31, 2011 News Release for detailed resource estimate<br /> Total contained metal<br />
  96. 96. Established Infrastructure<br />25<br />Low projected capital and operating costs<br /><ul><li>Open pit, bulk mineable
  97. 97. Accessible by road
  98. 98. Commercial power within 15km
  99. 99. Access to water</li></ul>TSX:SAC<br />US OTC:SOHAF<br />
  100. 100. Mineralization<br />26<br />Open pit, bulk mineable silver-indium deposit <br />Host rock sandstone with disseminated <br />silver, indium, gallium, lead, zinc and copper<br />Enrichment starts at surface <br />Average grade first five years:<br /><ul><li> Silver: 42.2 g/t (58 g/t Ag Eq) 1
  101. 101. Indium: 7.55 g/t
  102. 102. Economic cut-off grade <15 g/t(at $18/oz Ag) 2</li></ul>AgEq comprised of all contained metals<br /> Economic cut-off grade comprised only of silver and indium<br />
  103. 103. Malku Khota Drilling<br />27<br />Grade thickness map<br />OPEN<br /><ul><li>115 drill holes in current resource with updated resource Q1-2011
  104. 104. Updated resource results increase total M&I oz to 230 Moz Ag (a 60% increase in M&I oz) plus an additional 140 M inferred Ag oz
  105. 105. 2011 program to target conversion from resources to reserves & expansion drilling
  106. 106. Mineralization begins at surface
  107. 107. Deposit open along trend and down dip with excellent potential for expansion
  108. 108. New discovery of higher grade zones and down dip expansion of surface mineralization</li></ul>Mineralized<br />Sandstones<br />OPEN<br />OPEN<br />TSX:SAC<br />US OTC:SOHAF<br />
  109. 109. Malku Khota Mineralization<br />28<br /><ul><li>Broad zones of continuous sediment hosted mineralization
  110. 110. Open at depth and along trend</li></ul>LMD048: 286 meters grading 76 g/t AgEq Grade thickness values of over 21,500 g-m AgEq<br />OPEN<br />OPEN<br />TSX:SAC<br />US OTC:SOHAF<br />
  111. 111. Production Processes<br />29<br />From ore to metal<br />Open Pit Mining<br /><ul><li>Large scale shovel and truck open pit mining operation
  112. 112. Ore crushed in preparation for leaching
  113. 113. Acid-chloride leaching in captures silver, indium, copper, lead, zinc, gallium and gold
  114. 114. Metal recovery in several steps:
  115. 115. Acid recovery
  116. 116. Silver-gold-copper cementation
  117. 117. Indium-gallium precipitation
  118. 118. Lead and zinc sulfides
  119. 119. Downstream processing to metal products</li></ul>Crushing<br />Leaching<br />Metal Recovery <br />& Processing<br />Silver, Gold, Copper <br />Indium & Gallium ingots<br />Lead & Zinc concentrates<br />TSX:SAC<br />US OTC:SOHAF<br />
  120. 120. 2011 Economic Assessment<br />30<br />Metal Prices ($US)<br />Mid Case<br />Recent<br />Base Case<br />Mining Rate<br />Life of Mine <br />Ore Mined (LOM)3<br />Average Silver Grade 2<br />Average Indium Grade2<br /> Ag Eq grade<br />40,000 tpd<br />15 years<br />200M tonnes<br />42.2 g/t<br />7.55 g/t<br />58 g/t<br />$35/oz<br />$650/kg<br />$730/kg<br />Silver : $18/oz<br />Indium : $500/kg<br />Gallium: $500/kg <br />$25/oz<br />$570/kg<br />$570/kg<br />LOM <br />Annual<br />First <br />5 years<br />Total<br />Recovered Metals<br />Silver (oz)<br />Indium (tonnes)<br />Lead (lbs)<br />Zinc (lbs)<br />Copper (lbs)<br />Gallium (kgs)<br />158 M<br />1,184<br />191M<br />135 M<br />88 M<br />212,962 <br />13.2 M<br />80.7 <br />12.48M<br />4.42M<br />5.64M<br />15,184<br />10.5 M<br />78.9 M <br />12.7 M<br />9 M<br />5.87 M<br />14,198<br />Base Case<br />Mid Case<br />Recent<br />First 5 years cash flow <br />Net cash flow <br />NPV (5% discount rate)1<br />Internal Rate of Return<br />Payback period (years)<br />$185M/yr<br />$1,261M<br />$704M<br />37.7%<br />27 months<br />$287M/yr<br />$2,528M<br />$1482M<br />63%<br />19 months<br />$430M/yr<br />$4,298M<br />$2571M<br />92.9%<br />15 months<br />In US dollars, March 2011, PEA<br />First 5 years of production (average)<br />LOM = Life of Mine<br />
  121. 121. Silver Producer Price to Cash Flow Multiples (P/CF @ $30/oz)<br />31<br />Malku Khota<br />PEA Projected Cash Flows<br />Source: BMO Capital Markets Global Mining Research Report, April 3, 2011 (share prices as of March 31 2011)<br />
  122. 122. Primary Silver Project Annual Production Rates<br />32<br />Malku Khota one of largest emerging producers at over 13 Moz/yr<br />BHP Billiton<br />Fresnillo<br />Barrick Gold Corp.<br />South American Silver Corp.<br />Sumitomo Corp.<br />Pan American Silver<br />Cia De Minas Buenavertura<br />Sabina Gold & Silver<br />IndustriasPenoles<br />Silver Standard Resources<br />Silver Standard Resources<br />Goldcorp Inc.<br />Polymetal MNPO<br />Bear Creek Mining<br />Pan American Silver<br />Yamana Gold<br />Hochschild<br />Coeur d'Alene<br />Hochschild<br />Etibank<br />Hecla<br />Source: CPM Silver Yearbook 2011<br />*Based on mine production of 13.2 Moz /year for first five years<br />
  123. 123. Global Silver Industry Cash Cost Curve<br />33<br />Anticipated low-cost silver production<br />Cumulative Percentile of Silver Mine Production Cost<br />Lowest 25% Percentile Cash Costs<br />Malku Khota<br />13.2 Mozs/yr (1) <br />~ $2.94/oz (2) <br />Total Cash Cost Per Ounce of Silver<br />Industry AverageCash Cost<br />$5.27/oz<br />Source: GFMS World Silver Survey 2011<br />Average first 5 years of production<br />Silver cash costs after credits ($US)/oz<br />
  124. 124. Escalones Copper-Silver-Gold project, Chile<br />34<br />High potential, large-scale target<br /><ul><li>70 square km, road accessible, large scale system in well established mining district
  125. 125. Located near one of the worlds largest underground copper mines at El Teniente
  126. 126. Historic drilling shows >1% copper grades at surface and untested porphyry system grading 0.6% copper
  127. 127. Additional significant gold, silver and molybdenum credits
  128. 128. Exploration program underway
  129. 129. Resource estimate targeted for 2nd half of 2011</li></ul>TSX:SAC<br />US OTC:SOHAF<br />30<br />
  130. 130. Escalones Project Logistics<br />35<br />Excellent existing infrastructure<br />Ownership: 100% through lease<br />Location: 35km E of El Teniente<br />Elevation: 3800m<br />70 square kilometer property <br />Road accessible located 100 km southeast of Santiago<br />Gas pipeline across property<br />30 Drill holes completed to date <br />SAC property<br />Gas pipeline<br />Access Road<br />TSX:SAC<br />US OTC:SOHAF<br />31<br />
  131. 131. Drill Results Grade Thickness Map<br />36<br />Large-scale copper-silver-gold system<br /><ul><li>Open to expansion down dip and laterally
  132. 132. Strong historic drill results
  133. 133. Limited testing of porphyry system with most holes in replacement /skarn style mineralization</li></ul>TSX:SAC<br />US OTC:SOHAF<br />32<br />
  134. 134. Escalones<br />37<br />Geological cross-section<br /><ul><li>Enriched zones with high grades of replacement style mineralization starting at surface at over >1% copper with significant silver, and gold
  135. 135. Large scale porphyry target with intercept of 176 m @ 0.6% copper with additional credits from silver, gold, and molybdenum</li></ul>Alto<br />Bajo<br />TSX:SAC<br />US OTC:SOHAF<br />
  136. 136. Community Relations<br />38<br />A key to successful project development<br /><ul><li>Recent key additions to community relations team:
  137. 137. Jim Mallory, VP Operations and Social Responsibility – 35 years industry experience previously with Silver Standard, NovaGold, & Barrick (Placer Dome)
  138. 138. Miguel Reynaga, Director of Community Relations - 16 years experience with Newmont at their Inti-Raymi (Kori Kollo) Mine in Bolivia
  139. 139. Objectives to facilitate economic development in communities as part of project exploration, development and construction activities
  140. 140. Project construction will see workforce of over 1,000 with mine workforce of over 400 or more</li></ul>*Business for Social Responsibility, San Francisco, CA<br />
  141. 141. Project Milestones<br />39<br />Value drivers over the next 6-12 months<br /><ul><li>Malku Khota, silver-indium-gallium project, Bolivia
  142. 142. Updated resource estimate & PEA more than doubles annual production to 13.2 M oz of silver, 80.7 tonnes of indium and 15 tonnes of gallium per year*
  143. 143. Updated resource results show 60% increase in M&I ounces to 230 M oz of silver with an additional 140M oz inferred, and indium to 1,481 tonnes M&I and 935 tonnes inferred
  144. 144. Cash flows, project valuations and rates of return significantly expanded over previous studies
  145. 145. Pre-Feasibility work has started for the second half of 2011
  146. 146. Feasibility work to begin in 2012
  147. 147. Escalones, copper-silver-gold porphyry project, Chile
  148. 148. Exploration and Geophysics program underway
  149. 149. Target for initial resource estimate in 2nd half of 2011
  150. 150. Potential for significant deposit of copper, gold and silver</li></ul>*Average first five years of production<br />
  151. 151. Leveraged to Silver<br />40<br />Value of silver per dollar invested<br />Additional value of Indium and Gallium<br />Silver value per $1 invested<br /> SAC has some of the best leverage to silver of any development stage company with nearly $45 of silver value per $1 invested<br />Average value of silver <$8 of silver per $1 invested*<br />Source: Canaccord as of January 17, 2011, Share prices updated May 24, 2011<br />Note: all companies have projects in South and/or North America<br />Calculated using $25/oz Ag. Dollar value of silver per $1 invested = (silver resource/shares outstanding) x $25/oz silver) divided by share price<br />Value only shown for silver with no contribution from other metals<br />
  152. 152. Why South American Silver?<br />41<br />Investment highlights<br /><ul><li>World-class scale projects with excellent expansion potential
  153. 153. Track record of discovery and successful project development
  154. 154. Growing shareholder value through resource expansion and advancing projects up the development value curve toward feasibility
  155. 155. Leveraged to silver with nearly 4 oz of silver per share (6 ozs Ag equivalent)
  156. 156. Attractive investment value relative to peers at low value per oz
  157. 157. Exposure to rapidly growing indium and gallium high-technology market
  158. 158. Potential value from new copper-silver-gold resource definition and expansion at Escalones
  159. 159. Continued investor outreach to broaden market awareness of Company
  160. 160. Potential for NYSE-AMEX listing in the U.S.</li></ul>TSX:SAC<br />US OTC:SOHAF<br />37<br />
  161. 161. 42<br />TSX: SAC<br />OTC: SOHAF<br />Phone: 604.681.6926<br />1.855.681.6926<br />www.soamsilver.com<br />Greg Johnson<br />President & CEO<br />TSX:SAC<br />US OTC:SOHAF<br />
  162. 162. Relative Stock Performance<br />43<br />SAC outperforming key silver & gold indices<br /><ul><li>Trading liquidity increasing with average volume of 500,000 shares/day
  163. 163. SAC undervalued relative to peers at >$0.80 Enterprise Value/oz vs average of more than $4/oz for early stage resources</li></ul>TSX:SAC<br />US OTC:SOHAF<br />
  164. 164. Zamin Group - Strategic Investment<br />A key regionalplayer<br /><ul><li>Well funded regional player in South American resources industry with major projects in Brazil, Uruguay, Bolivia, and Chile
  165. 165. Strategic 19% investment positions SAC in strong financial and operational position to advance projects to feasibility
  166. 166. Track record of successfully facilitating South American project development through relationships with national and state governments in the region
  167. 167. Portfolio of South American projects with strong government support in permitting, rail and port infrastructure
  168. 168. Bamin Project-Brazil
  169. 169. Valintine Project-Uruguay
  170. 170. Acquiring assets in Bolivia over past year</li></ul>TSX:SAC<br />US OTC:SOHAF<br />44<br />
  171. 171. Management & Directors<br />45<br />Ralph Fitch (Executive Chairman)is an explorationist with over 40 years of global experience, a co-founder of South American Silver and former Chief Geologist for Chevron Minerals credited with several major discoveries in South America.<br />Antonio Canton (Director) is consultant and director to a number of international companies in marketing, finance and real estate. <br />Tony Cau (Director) is COO at Zamin Ferrous. With over 30 years of experience in the mining, construction and heavy manufacturing industries, he has been involved in mine development and expansion projects around the world for groups like BHP, SNC-Lavalin, and Bateman Engineering.<br />Jeffrey Couch (Director) is the Head of Business Development at ENRC and has held various financial advisory positions including for private equity groups such as Campbell Lutyens, was Director of Metals & Mining Investment Banking for Credit Suisse, and a key member of the capital markets team for Citigroup European Investment Bank. <br />Paul Haber (Director) is a Chartered Accountant and a Certified Public Accountant, and previously CFO of a TSX-V company and Chairman of the Audit Committee for South American Silver.<br />Peter Harris (Director) is a mining engineer with over 40 years of industry experience including construction and operation of over 20 mines around the world with groups such as Barrick (Placer Dome) and NovaGold. <br />William Murray (Director) is an engineer in the mining industry with over 35 years of experience in construction management and project evaluation with groups including Fluor Daniel, Denison Mines, Optimum Project Services and Anglo American Corp. <br />John Watson (Director) is President of a TSX -V listed company and Manager of a limited liability corporation in commercial real-estate.<br />Tina Woodside (Director) is the head of Gowlings’ corporate finance department and practices corporate and securities law focused on corporate finance, M&A and corporate governance matters. <br />Greg Johnson (President/CEO & Director)has over 25 years mining industry experience in corporate finance, project development and exploration. A s a co-founder of NovaGold, he played a key role in growing that company from $50 million in value to over $2 billion market capitalization advancing 3 major projects through to Feasibility.<br />William Filtness (Chief Financial Officer)is a Chartered Accountant with over 20 years of financial experience in the mining industry.<br />Phillip Brodie-Hall (Vice President of Project Development) has over 35 years experience in engineering construction and project development. He has participated in nearly every aspect of evaluation, feasibility studies and project development in the mining industry.<br />James Mallory (Vice President of Operations & Social Responsibility) hasover 30 years of mining industry experience in large-scale mine management, operations and construction for companies including Barrick (Placer Dome), Silver Standard, and NovaGold.<br />Felipe Malbran (Vice President of Exploration)has over 25 years experience in exploration management in South America including key roles in the discovery of Malku Khota, Vizcachitas, and Escalones.<br />David Dreisinger (Vice President of Metallurgy) is Professor and Industrial Research Chair in Hydrometallurgy at the University of British Columbia. He is actively involved in developing and commercializing hydrometallurgical process at a number of mines worldwide.<br />Andrew Clark (Manager of Project Implementation) has over 30 years global industry experience in the development, design, management and construction of industrial mining projects. <br />Richard Doran, (Vice President & Corporate Secretary) has extensive industry experience including with General Minerals and as Marketing Manager for Chevron Minerals.<br />Xavier Gonzales Yutronic (General Manager Compañía Minera Malku Khota S.A.) has experience in management, finance, and community relations in the mining industry including with Glencore, and Comsur S.A. <br />TSX:SAC<br />US OTC:SOHAF<br />
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