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US Silver Corporate Presentation - September 2011
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US Silver Corporate Presentation - September 2011

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  • 1. U.S. Silver Corporation September 2011 TSXV : USA US OTC Markets : USSIF
  • 2. Forward Looking StatementsCertain statements contained in or incorporated by reference into thispresentation 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 itsmanagement, are intended to identify forward-looking statements,however, other information may also constitute forward-lookingstatements. Such statements reflect the current views of U.S. Silver withrespect to future events and are subject to certain risks, uncertaintiesand assumptions. Many factors could cause the actual results,performance or achievements of U.S. Silver that may be expressed orimplied by such forward-looking statements to vary from those describedherein should one or more of these risks or uncertainties materialize.U.S. Silver does not intend, and does not assume any obligation, toupdate these forward-looking statements. Page 2
  • 3. Strong Silver Market TrendsIn 1980, when Nelson Bunker Hunt was asked as to why he haddeveloped a passion for silver, he said; "Silver looked safer thanoverseas oil concessions, the way things were going. And preciousmetals were a good hedge against paper money". Silver Demand – Industrial and Investment Page 3
  • 4. Strong Silver Market Trends60.00 100.00 90.00 Silver Gold Ratio50.00 80.00 70.0040.00 60.0030.00 50.00 40.0020.00 Silver up 110% since January 1, 2010 30.00 20.0010.00 10.00 - - Page 4
  • 5. Company Overview Established producer2.4 in prolific Silver Valley in Northern Idaho Low cost incremental growth potential (excess capacity) Revenue projections inMillion oz Ag excess of $90 million at current pricesAnnual production85% of revenue from silver Page 5
  • 6. Located in Historic Silver ValleyOver 1 billion British Columbia Albertaounces producedModern and ample Spokaneinfrastructure Washington Missoulain place MontanaSafe and friendlyjurisdiction Oregon Boise Idaho 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 in use, excess capacity available• Dominant land position in the Silver Valley – Large under explored property• No historic environmental liability with EPA – Settled in 2001• Hedged 20% of production in 2011 to protect CapEx program • 80% unhedged, 100% unhedged in 2012 and after Page 7
  • 8. Proved & Probable Reserves21.9Million oz Ag Provides a 7 year mine life Exploration consistently replaces annual production 86 Million lbs. lead Has produced for almost 11 Million Lbs. copper 60 years and still keep finding ore Page 8
  • 9. Recent Results Q2 2011 YTD Q2 2011 Q1 2011 2010 2009Revenue 49.9 30.8 19.1 62.4 45.9Gross profit 20.5 12.3 8.2 10.4 3.0Pre tax income 15.6 9.4 6.2 4.9 2.0Cash from Ops 19.5 12.3 7.2 15.0 8.3Silver production 1,142,685 648,322 494,363 2,275,817 2,427,156Lead production 2,994,419 1,717,218 1,277,201 5,613,689 6,446,656Copper production 581,125 321,724 259,401 1,000,319 1,075,307Cash cost / ounce Ag 16.50 15.39 17.97 13.50 11.67 Page 9
  • 10. Market Data 52 week hi-lo $0.83 - $0.15$205Million 307 million shares outstanding 335 fully diluted TSX.V and OTCQX average daily volume 1 Million Current Market Cap (September 2011) Undervalued vs. peers on key metrics Page 10
  • 11. Galena Mine Page 11
  • 12. Galena Mine – an impressive history2ndlargest High grade, narrow vein, copper-silver & lead-silver mine Short term variability in operating results, long term proven producerPrimary silver producer No historic environmentalin the U.S. liability Page 12
  • 13. Galena – Past & Present179million Focusing on higher grade zones to increase head grade Examining production expansion options with high pricesOunces produced 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 3400356 483 Silver 117-215 3700 Coeur Vein 4000 3700 4300 4600 4900 175 5200 72 5500 Page 14
  • 15. Galena Performance Silver ounces produced3,000,0002,500,0002,000,0001,500,0001,000,000 500,000 - 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Forecast Page 15
  • 16. Milling Operations Excess Capacity Galena Mill 900 tons/day and Coeur Mill 500 tons/ day = total capacity of 1,400 tons/day 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 Contained Ag Lead Copper 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 Total 44.4 203.3 21.3• 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 • No permitting or5.9 acquisition costs • Existing excess mill capacity • Examining alternative mining methods & scalemillion • Additional drilling underway to betterresource ounces define deposittargeted • Significant exploration upside Page 19
  • 20. Exploration Potential Page 20
  • 21. Exploration Potential • Dominant land position14 • Under explored, accessible • Strong cash flow funding all plans, 50% increase in footage in 2011 • Identified 6 surface &Thousand underground targets that are ready for drillingacres of land • Historical success of increasing reserves well in excess of production Page 21
  • 22. Significant Reserve Growth Proved and Probable Silver Reserves25,000,00020,000,00015,000,00010,000,000 5,000,000 - 2005 2006 2007 2008 2009 2010 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. Surface Drilling TargetsCommencing 12,000 foot surface drilling program• CDA Gap• Argentine VeinDrill 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 Page 24
  • 25. Underground Drilling Targets• Targets: Western Coeur Mine Deep Coeur Mine Deep Silver Vein Caladay Lead-Silver• Targets are extensions of known vein systems Page 25
  • 26. The Right People in Place Page 26
  • 27. Experienced and Stable Workforce237employees 33 with over 20 years of experience Additional 30 contract miners Page 27
  • 28. The Right Management TeamGordon E. • Over 25 years experience in investment banking, capital markets, and corporate bankingPridham • President and CEO of Edgewater Capital and Chairman of Titanium CorporationChairman • Serves as a Director for Newalta Income Fund • Formerly with Chemical Bank and National Bank, in the energy and minerals sector in New York, Calgary, and Toronto • Formerly with Merrill Lynch Canada and Midland Walwyn and managed the Investment Banking groups at Deutsche Morgan Grenfell, Research Capital, and Raymond JamesTom H. Parker • Mining engineer with over 40 years experience in the mining industryPresident , CEO & • Former President and CEO of Gold Crest Mines and High Plains UraniumDirector • Worked for 10 years as an Executive VP of Anderson and Schwab, a New York based management consulting firm • Former CEO of Contain Minerals which owned 22 coal mines, the Brewer gold mine, and Montana Talc • Worked for 10 years for ARCO where he was President of Beaver Creek Coal Mines, General Manager of Nevada Molly, President of Thunder Basin Coal and VP for Engineering, Exploration and Business Development • Former General Manager of Jacobs Ranch mine for Kerr McGee Coal and served as Project Manager for ConocoSteven Long • Over 33 years experience in mine engineering and managementChief Operating • Direct senior management of underground mining operations for Newmont Mining Corporation in Elko, Nevada and BarrickOfficer Gold, Echo Bay and Homestake MiningChris 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 companiesMine Management • Many long service management end employees provide knowledge and continuity • New management bring new thinking and approaches Page 28
  • 29. The Right BoardJohn S. Brock • Geologist with over 40 years experience as an executive for 20 public, junior exploration companiesDirector • 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 GroupJames M. • Geologist and mining analyst with over 15 years experienceMacintosh • Served as an executive and a director of numerous public and private companies in Canada and the United StatesDirector • President and COO of Innovium Capital, a company that invests in innovative opportunitiesKevin D. Stulp • Served on the board of Aurora Oil & Gas since 1997Director • 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 reengineeringAlan R. Edwards • Board of directors for Gammon Gold Inc., Entrée Gold Inc., and Copper One Inc. • 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. Page 29
  • 30. SummaryIncreasedStrength Opportunity to Capitalize on a proven and established asset • Production growth • Reserve Growth • Exploration Expansion Page 30
  • 31. Summary• Highly leveraged silver producer, 85% revenue from silver, 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 31