South American Silver Corporate Presentation, Q1, 2011
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 February 21, 2011 3
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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 $1.50 Millions of Silver Ounces & Enterprise Value Per Oz $0.58 $7.26 $2.88 Millions of Silver Ounces $2.51 $2.21 $6.55 $2.05 $5.09 $15.03 $12.43 $32.71 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 5
45. Enterprise Value per Resource Oz Producers Average >$14/oz By project development stage Advanced Development Stage Average >$7/oz Development Stage Average >$3/oz * * Source: Canaccord Report January 17, 2011 Share prices as of February 8, 2011, Note: All companies have projects in South and/or North America *EV/oz truncated to $20 6
46. Development Stage Value Curve Potential value growth with project advancement Production Average Enterprise Value per Oz of Silver by Stage Take-Over offers or Partnerships common at this stage $14/oz Construct Increased value through resource expansion Increasing Market Value Permits FS $7/oz PFS Resource Definition PEA $3/oz Advanced Development Stage (Reserves) Early Stage Exploration & Development Production Discovery Increasing value with project advancement 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. 7
47. Current Silver Company Valuations by Stage Circle size represents EV/oz Source: Canaccord Report January 17, 2011 Intierra, February 8, 2011 Share prices as of February 831, 2011, Note: All companies have projects in South and/or North America 8
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 Source: GFMS World Silver Survey 2010 9
64. Indium Demand Growing demand in high-tech markets 5 year projected demand growth End-use Market Demand (tonnes) 2010 total indium production level 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 14
65. Indium Fundamentals Global Zinc Production vs. U.S. Indium Demand U.S. Indium Demand (tonnes) Global Zinc Production (Millions of tonnes) Source: U.S Department of Energy: Critical Materials Strategy, December 2010; Global Zinc Production USGS Historical Statistics for Mineral and Material Commodities in the United States 15
66. Key Metal Consumption vs Reserves Remaining Years of Supply Years of Supply INDIUM 16
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68. Member of Mercosur Regional trade organization with Brazil as largest trading partner
69. One of the world’s premier silver districts with billions of ouncesof historical production
70. Planned $32 billion 5-7 year infrastructure build-out by Bolivian government for new rail and road corridors and hydropower generation
71. Three Major silver mines built within last four years by Pan American Silver, Coeur D’Alene, and Sumitomo
93. 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 22
98. Deposit open along trend and down dip with excellent potential for expansion
99. New discovery of higher grade zones and down dip expansion of surface mineralizationTSX:SAC US OTC:SOHAF 23
100. 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 24
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102. Excellent potential to expand resourcesSucre Area Limosna Area Continuation of favourable sedimentary host rocks TSX:SAC US OTC:SOHAF 25
111. Downstream processing to metal productsCrushing Leaching Metal Recovery & Processing Silver bars Indium ingots Lead and Zinc concentrates TSX:SAC US OTC:SOHAF 26
112. 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 27
113. Advancing to Production Development Timeline The project is at the PEA stage and may change substantially in terms of size and cost as further exploration, engineering and metallurgical testing are completed 2013-14 2012 2011 Pre-Feasibility Studies Feasibility Study Projected Mine Development TSX:SAC US OTC:SOHAF 28
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115. 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 30
138. 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 nearly $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 February 8, 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 37
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140. Track record of discovery and successful project development
141. Growing shareholder value through resource expansion and advancing projects up the development value curve toward feasibility
148. TSX: SAC OTC: SOHAF Phone: 604.681.6926 1.855.681.6926 www.soamsilver.com Greg Johnson President & CEO TSX:SAC US OTC:SOHAF 39
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150. SAC undervalued relative to peers at <$0.50/oz vs average of more than $1.70/oz for early stage resources and >$3.00/oz for >200Moz resourcesTSX:SAC US OTC:SOHAF
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156. 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
