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  • Cash costs do not benefit as much from by-product credits as a pure silver playBig earnings leverage
  • Hecla’s Lucky Friday the only other producing mine in the Valley
  • At March 2011 prices gross values of $740MM Ag, $100MM lead, and $45MM copper
  • 2010 In Review        Chairman's letter messages        Summary financial and operating performance, hedge losses        Fatality - production impact and resolution of issue with MSHA        Equity Raise        2011 Hedge explanation & rationaleQ1 2011 Summary financial and operating performance        Production challenges and solutionsLooking Ahead through 2011        Confirmation of guidance        Explanation of how head grades will improve for the remainder of the year        Coeur Status        Exploration Program

Us silver corporatepresentationmay7_ 2012 Presentation Transcript

  • 1. U.S. Silver Corporation May 2012 TSX : USA US OTC Markets : USSIF DB Frankfurt : QE2
  • 2. US Silver - Summary• Annual silver production of 2.3 million ounces • in production for 60 years • excess hoisting and milling capacity• 85% of revenue from silver – pure play• Located in Silver Valley, Northern Idaho • most prolific in the US, safe, mining friendly• 14,000 acre, dominant under explored land position in the Silver Valley • significant increase in exploration program• Cash of approximately $27 million (Q1 2012)• Market Cap $99 million• TSX – USA and US OTC - USSIF • trades actively Page 2
  • 3. US Silver Management TeamGordon E. • Over thirty years of experience as a Global Finance ExecutivePridham • Extensive special committee and public board experience with a track record of creating value for shareholdersExecutive • Serves on the public company boards of Newalta Corporation, NorRock Realty Finance Corporation and TitaniumChairman & Interim Corporation, where he is Chairman of the BoardCEO • Formerly with Chemical Bank and National Bank in the energy and minerals sector in New York, Calgary, Toronto and Hong Kong • Following Merrill Lynch Canada, he managed the Canadian Investment Banking groups at Deutsche Bank, Research Capital and Raymond JamesSteven 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 andChief Financial acquisitions, corporate finance and financing and management reportingOfficer • Formerly with Rio Algoma, Suncor, and several junior mining and oil & gas companiesMine • Many long service management end employees provide knowledge and continuityManagement • New management bring new thinking and approachesTom Ryley • Over 35 years experience in the natural resources sectorDirector • He sits on the boards of several public, private and charitable organizations • Mr. Ryley graduated from York University with a Bachelor of Arts and from Carleton University with a Master of Arts in Public Administration. Page 3
  • 4. US Silver 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 an advisor 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 Chief Executive Officer, Continental Mining & Smelting LimitedKevin 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.Director • 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.Tom H. Parker • Mining engineer with over 40 years experience in the mining industryDirector • Retired as CEO of US Silver in January 2012 • Former President and CEO of Gold Crest Mines and High Plains Uranium • Worked for 10 years as an Executive VP of Anderson and Schwab, a New York based management consulting firm • ARCO for 10 years where he was President of regional operations and VP for Engineering, Exploration and Business Development Page 4
  • 5. Company Overview Established producer2.3 in prolific Silver Valley in Northern Idaho Low cost incremental growth potential (excess mill capacity) 2011 revenueMillion oz Ag $93.4 millionAnnual production 2011 Cash from Ops $29.5 million85% of revenue from silver Cash of approx. $27 million (2012/3/31) Page 5
  • 6. Located in Historic Silver ValleyOver 1 billionounces produced British Columbia AlbertaModern andample Spokaneinfrastructure Washington Missoulain place MontanaSafe and friendlyjurisdiction Oregon BoiseRegion of Idahoincreasinginterest 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 operating, excess capacity available• Dominant land position in the Silver Valley – Large under explored property• No historic environmental liability with EPA – Settled in 2001• Fully un-hedged on silver and base metals Page 7
  • 8. Proven & Probable Reserves23.2Million oz. Ag Reserves provides a 7 year mine life Exploration consistently exceeds annual production 91 Million lbs. lead The Galena Mine has 12 Million lbs. copper produced for almost 60 years & ore continues to be found Page 8
  • 9. Recent Results 2011 2010 2009 Revenue 93.4 62.4 45.9 Gross profit 34.8 10.4 3.0 Pre tax income 21.3 4.9 2.0 Cash from Ops 29.5 15.0 8.3 Silver production 2,318,194 2,275,817 2,427,156 Lead production 6,280,028 5,613,689 6,446,656 Copper production 1,103,507 1,000,319 1,075,307 Cash cost / ounce Ag 17.75 13.50 11.67 Page 9
  • 10. Market Data 52 week high $3.65 – Low $1.51 Graduated to TSX on Oct 3,$99 2011 62 million shares outstanding 68 million fully diluted TSX and OTCQX combined average daily volume 94Million Thousand (post-consolidation) Undervalued vs. peers on key Current Market Cap metrics (May 2012) Page 10
  • 11. 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 11
  • 12. Galena – Past & Present200million 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 12
  • 13. 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 13
  • 14. 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 2012 Forecast Page 14
  • 15. Milling Operations Capacity Galena Mill 900 tons/day Coeur Mill 500 tons/day Currently operating at 65% capacity 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 15
  • 16. Reserves Detail• 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 more than doubled since 2006 Page 16
  • 17. Restarting The Coeur Mine • No permitting or acquisition6.0 costs • Existing excess mill capacity • Re-development started February 2012 • First production expected bymillion end of 2012 • Full production rates ofresource ounces 500,000 oz. per year by end oftargeted 2013 • 2012 Capital cost of approximately $5 million Page 17
  • 18. Exploration Potential Page 18
  • 19. Significant Reserve Growth Proved and Probable Silver Reserves25,000,000 Reserve additions consistently replace production20,000,00015,000,00010,000,000 5,000,000 - 2005 2006 2007 2008 2009 2010 2011 Page 19
  • 20. Exploration Potential • Dominant land position14 • Under-explored & accessible • Internally funded • Identified 6 surface & underground targets that are ready for drillingThousand Exploration Drilling • 2012 – 100,000 feet (budgeted)acres of land • 2011 – 70,000 feet • 2010 – 49,000 feet • 2009 – 13,000 feet Page 20
  • 21. Surface and Underground Drill Targets CDA “GAP” Western Argentine Coeur Mine Vein Deep Calady Mine Coeur Mine Deep Lead-Silver Silver Vein Page 21
  • 22. Drilling TargetsSurface• Commenced 12,000 foot surface drilling program targeting CDA Gap and 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 systemsUnderground Exploration DrillingTargets: • 2011 – 70,000 feet • Western Coeur Mine • 2010 – 49,000 feet • Deep Coeur Mine • 2009 – 13,000 feet • Deep Silver Vein • Caladay Lead-SilverTargets are extensions of known vein systems Page 22
  • 23. The Right People in Place Page 23
  • 24. Experienced and Stable Workforce320employees 33 with over 20 years of experience Page 24
  • 25. SummaryIncreasedStrength Opportunity to Capitalize on a proven and established asset • Production growth • Reserve Growth • Exploration Expansion • Opportunities outside of core asset base Page 25
  • 26. Summary• Highly leveraged silver producer, 85% revenue from silver, no hedges 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 26
  • 27. Contact Us: us-silver.com Corporate Office Tel: 416.907.5501 info@us-silver.com 401 Bay St. Suite 2702 Toronto, ON M5H 2Y4 Investor RelationsHeather Bailey-Foster, Manager 208-556-1535 Ex.2 hfoster@ussil.com