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U.S. Silver & Gold - Investor Presentation - August 2013

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U.S. Silver & Gold - Investor Presentation - August 2013

U.S. Silver & Gold - Investor Presentation - August 2013

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  • 1. Low Risk, Low Capital, High Growth AUGUST 2013 TSX:USA OTCQX:USGIF
  • 2. Forward Looking Statement – Safe Harbour Certain information in this presentation may contain forward-looking statements. This information is based on current expectations that are subject to significant risks, assumptions and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. All statements, other than statements of historical fact, included in the presentation, including, without limitation, statements regarding potential mineralization and reserves, exploration results, and future plans and objectives of U.S. Silver & Gold, are forward-looking statements. Words such as “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “intend”, “believe” and other similar expressions are forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather reflect our current views with respect to future events and are subject to risks, uncertainties, assumptions and other factors, and actual results and future events could differ materially from those anticipated in such statements. There can be no assurance that such forward-looking statements will prove to be accurate. U.S. Silver & Gold assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the U.S. Silver & Gold. Additional information identifying risks and uncertainties is contained in filings by U.S. Silver & Gold with the Canadian securities regulators, which filings are available at www.sedar.com. An additional Cautionary Note to Investors – In the event that we use certain terms in this presentation, such as “resource”, “measured resource”, “indicated resource” and “inferred resource”. U.S. investors are cautioned that, while such terms are recognized and required by Canadian Securities Laws, the United States Securities and Exchange Commission does not recognize them. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination has been made. U.S. investors should not assume that all or any part of measured or indicated resources will ever be converted into reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Accordingly, information concerning descriptions of mineralization in this presentation may not be comparable to information made public by companies that are subject to the SEC’s Industry Guide 7. Mr. Jim Atkinson, Vice President, Exploration and a Qualified Person under Canadian Securities Administrators guidelines has approved the applicable contents of this presentation. For further information on the Galena Complex, please refer to the technical report entitled “Technical Report, Galena Complex, Shoshone Idaho” dated March 22, 2013 and available on the U.S. Silver & Gold Inc. SEDAR profile at www.sedar.com. Some of the potential quantities and grades disclosed are conceptual in nature, there has been insufficient exploration to define a mineral resource on all of the mineralization at the Galena Complex and it is uncertain if further exploration will result in certain targets being delineated as a mineral resource. 2
  • 3. U.S. Silver & Gold Highlights Established, Long-life Operating Complex Significant Ongoing Brownfield Expansion Dominant Land Position in the Prolific Silver Valley Favourable Environment for Accretive Acquisitions Proven Management & Board 3 2013 Forecast 2.1 – 2.2M oz Ag $15.50 - $17.50 Ag Cash Costs/oz
  • 4. Darren Blasutti President and CEO, Director • Former SVP Corporate Development and Investor Relations for Barrick Gold, reported to President and CEO • Led Barrick's strategic development for over 13 years executing over 25 gold mining transactions including Sutton Resources, Homestake Mining, Placer Dome, consolidation of the Cortez property from Rio Tinto • Responsible for creation of Barrick Energy to hedge Barrick’s exposure to energy prices Bob Taylor COO • Over 40 years of experience in operations, management, engineering, and exploration for underground and open-pit mines • Most recently VP and President North American Operations for Kinross Gold where he was responsible for all operations and exploration • Former VP, Mine Operations at Stillwater Mining in Montana Warren Varga CFO • Over 18 years of progressive financial leadership experience and brings extensive senior management expertise • Most recently CFO of RX Gold & Silver Inc. and former Senior Director, Corporate Development at Barrick Gold Corporation • Member of the Canadian Institute of Chartered Accountants and the Chartered Financial Analyst Institute Steve Long SVP, Operations • Over 35 years experience in mine engineering and management • Senior manager for underground mining operations for Newmont Mining Corporation, Barrick Gold, Echo Bay and Homestake Mining Jim Atkinson VP, Exploration • Licensed Professional Geologist, over 40 years of experience in exploration geology • Completed more than a dozen exploration programs across North America Daren Dell VP, Technical Services • Over 20 years experience and brings extensive knowledge gained from evaluating mining assets around the globe • Formerly Director, Corporate Development and Director, Technical Evaluations at Barrick Gold. Prior to joining Barrick Gold, Mr. Dell was at Placer Dome for 15 years Peter McRae VP, General Counsel • Most recently VP Corporate Counsel of RX Gold & Silver Inc. and in private practice at Weil, Gotshal & Manges LLP, a major international law firm based in NY with extensive experience on general corporate, securities law, and governance matters Management Team: Experienced + Proven 4
  • 5. Board of Directors Gordon Pridham Chairman • Over 30 years of experience as a global finance executive • Serves on the public company boards of Newalta Corporation and Titanium Corporation, where he is Chairman of the Board Hugh Agro Director • Retired in 2009 as EVP Strategic Development at Kinross Gold, where he oversaw corporate development and exploration • Held senior positions with Placer Dome Canada and Deutsche Bank Alex Davidson Director • Retired in 2009 as EVP Exploration and Corporate Development at Barrick Gold • 2005 AO Dufresue Award to recognize exceptional achievement and distinguished contribution to mining exploration in Canada • In 2003 was named Prospector of the Year by PDAC for discovery of Alto Chicama in Peru Alan Edwards Director • Chairman of AuRico Gold Inc. and AQM Copper Inc. Other boards include Entrée Gold Inc., Copper One Inc. and Oracle Mining Corp. • Senior management positions with Frontera Copper, Apex Silver Mines, Kinross, Cyprus Amax and Phelps Dodge Tom Ryley Director • Board of directors for Newalta Corporation, Tribute Resources and Benefuel Inc., where he is Chairman of the Board • Former Executive Vice President of Suncor Energy, where he worked for 25 years in a variety of roles Lorie Waisberg Director • Former Senior Partner at Goodmans LLP and EVP, Finance and Administration of Co-Steel Inc. • Accredited with Institute of Corporate Directors and sits on Boards of Tembec and Chemtrade Logistics Inc Darren Blasutti Director • President and CEO 5
  • 6. Asset Overview 6 Galena Complex – 100% owned • High grade Ag-Cu and Ag-Pb • Produced over 240 M oz Ag historically • Over 23 M oz Ag in “Proven and Probable” Reserves, 13 M oz Ag in “Measured and Indicated” and 14 M oz in “Inferred” Resources* plus another 4 M oz Ag that were brought into the “Inferred” category in March 2013 • Caladay Zone being assessed for high grade conventional mining and bulk mining potential • Excess hoisting and milling capacity Galena Complex located in mining friendly Idaho • Ranked 6th in the US by The Fraser Institute in 2012/2013** • Supportive local communities • Established mining state • Experienced knowledgeable workforce 6 Drumlummon Mine – 100% • Currently on care & maintenance pending an improvement in gold & silver prices • High grade Au and Ag • Produced over 1 M oz Au and 12 M oz Ag • Extensive mining infrastructure* Descriptions of our mineral deposits are not comparable to similar information reported by U.S. companies which are subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. See www.us- silver.com for NI 43-101 Technical Report. ** See www.fraserinstitute.org for details.
  • 7. Galena Complex 7 Galena Mine • Galena 2012 production of 2.25M oz Ag @ ~$19/ounce; 2013 production estimates of 2.1-2.2M oz Ag @ $15.50-$17.50/ounce • Q1 production of 549,000 oz Ag @ $20.45/ounce; • Q2 production of 629,227 oz Ag @ $16.41/ounce • Cost cutting initiatives taking shape • Coeur re-development postponed to focus efforts on Caladay potential • Current M&I resource is 3.3M oz Ag with an additional 1.9M oz in Inferred • Option value of resource is preserved; mine ready for a relatively quick re-start when metals prices support a production decision • Two separate mills with combined capacity of 1,500 tons/day, currently operating at less than 50% of capacity • Mill recovery rates of 96% for silver-copper and 92% for silver-lead ores • Campaigning at Galena mill to reduce costs for remainder of 2013 • Continued exploration success and mine life extension at Silver Halo and 350- 370 vein system • Accelerated development of the 350-370 vein system and the Silver Halo is expected to deliver high margin mill feed in the short term Large Reserve and Resource Base 2nd largest Primary silver producer in the U.S. 7
  • 8. Galena Complex – Long Section Opportunities for Significant Brownfield Expansion
  • 9. Galena Complex – Caladay Zone 9Supports Lower Cost Mining Techniques 9 New High Grade Discovery * Some of the potential quantities and grades disclosed in this presentation are conceptual in nature. At the current stage of exploration, there is insufficient drilling to determine the extent of continuity of the mineralization required to define a mineral resource for all mineralization at the Galena Mine Complex and Drumlummon Mine. It is uncertain if further exploration will result in certain exploration targets being delineated as a mineral resource The Caladay Zone is a semi-continuous mineralized zone extending from Galena into the Caladay Mine at depth • Currently 2,800-3,000 vertical feet with estimated strike length of 1,200-3,600 feet and apparent widths of 200-400 feet Global tonnage target of 60-70 million tons and potential silver resource of 150-200 million ounces based on over 1100 historic drill holes and new drilling Mining will commence in high-grade, silver-copper zones targeting 100 tons per day in Q3 2013 • Focus will then shift to high grade areas of the 49-390 silver-lead resource Publication of a Preliminary Economic Assessment of the greater Caladay Zone silver-lead resource has been deferred due to recent volatility in the price of silver • In-house work continues to further improve confidence in the project
  • 10. Caladay Zone (Illustrative View) AgCu - Silver Halo AgPb - Lead Zone AgPb - Higher Grade Silver Resource Mineralization Offers Low Capex and Reduced Execution Risk
  • 11. Caladay Zone - 4900 Level Plan Close Proximity To Existing Mine Infrastructure And Expanding Block Model Results Caladay Zone * Calculated at $23 Ag, $0.90 Pb and $3.25 Cu
  • 12. Strategic Objectives 12Grow earnings and cash flow per share 12 Roadmap For Success Execute on operational improvements and brownfield expansions • Develop Caladay to fully utilize existing processing capacity • Continue exploration success to prove out bulk mining expansion case Assess exploration, processing and capital synergies with geographically focused assets Assess accretive per share acquisition opportunities in North America 1 2 3 Exceed 5.0 M oz Ag by end of 2015
  • 13. Operating Cost Improvements at Galena Complex Since New Management $0.00 $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 Cash Cost All In Cash Cost Q3 2012 Q4 2012 Q1 2013 Q2 2013 13 *Calculated per silver industry standards **Silver industry cash cost plus all development, capital expeditures, exploration spending and G&A * **
  • 14. Share Price Performance & Capital Structure 14 Symbol: USA-T Recent Price*: $0.72 Market Cap (CDN): $43.2 M Cash Balance**: $7.4 M Debt**: $7.9 M Shares Basic: 60 M Options : 5.2 M Warrants: 1.4 M Fully Diluted: 66.6 M * As of July 23 2013 ** As of July 2, 2013 unaudited Volume(TSX&OTCQX) SharePrice 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 8/15/2012 10/15/2012 12/15/2012 2/15/2013 4/15/2013
  • 15. Junior Silver Producer Resource Base 15 Quality Resources and Growing Agoz(M) Reserves/Resources *As of June 13, 2013 and based on public disclosure documents. Market data and other statistical information used in this presentation may be based on independent industry publications, government publications, reports by market research firms, or other published independent sources. Some data is also based on U.S. Silver & Gold’s good faith estimates that are derived from its review of internal data and information, as well as the sources listed above. Although U.S. Silver & Gold believes these sources are reliable, U.S. Silver & Gold has not independently verified the information and cannot guarantee its accuracy or completeness. P&P M&I 0 10 20 30 40 50 60 70 GPR AXR AUMN SPM USA AUN
  • 16. Junior Silver Producer Multiples 16 Undervalued Relative to Peers EV/Resources($/ozAg) EV / Resources *As of June 13, 2013 and based on public disclosure documents. Market data and other statistical information used in this presentation may be based on independent industry publications, government publications, reports by market research firms, or other published independent sources. Some data is also based on U.S. Silver & Gold’s good faith estimates that are derived from its review of internal data and information, as well as the sources listed above. Although U.S. Silver & Gold believes these sources are reliable, U.S. Silver & Gold has not independently verified the information and cannot guarantee its accuracy or completeness. 0 2 4 6 8 10 GPR EXN AUN AXR USA SPM AUMN
  • 17. 2013 Estimated Silver Production per $1,000 Invested Highest Leverage to Silver Prices 17 Buy Assets Leveraged to the Silver Price Productionper$1kInvested(oz) *As of June 13, 2013 and based on public disclosure documents. Market data and other statistical information used in this presentation may be based on independent industry publications, government publications, reports by market research firms, or other published independent sources. Some data is also based on U.S. Silver & Gold’s good faith estimates that are derived from its review of internal data and information, as well as the sources listed above. Although U.S. Silver & Gold believes these sources are reliable, U.S. Silver & Gold has not independently verified the information and cannot guarantee its accuracy or completeness. 13.0 16.5 20.3 22.7 27.6 36.3 56.6 0.0 10.0 20.0 30.0 40.0 50.0 60.0 AUMN EXN GPR AXR SPM AUN USA
  • 18. Re-Rating Potential 18 Attractively Positioned Among Peers EnterpriseValue($M) *As of June 13, 2013 and based on public disclosure documents. Market data and other statistical information used in this presentation may be based on independent industry publications, government publications, reports by market research firms, or other published independent sources. Some data is also based on U.S. Silver & Gold’s good faith estimates that are derived from its review of internal data and information, as well as the sources listed above. Although U.S. Silver & Gold believes these sources are reliable, U.S. Silver & Gold has not independently verified the information and cannot guarantee its accuracy or completeness. 2013 Production Guidance (M oz Ag Eq.) Junior Silver Producers USA AUN GPR EXN AXR SPM AUMN Companies included: AUMN – Golden Minerals Company; AUN – Aurcana Corporation; AXR – Alexco Resource Corp.; EXN – Excellon Resources Inc.; GPR – Great Panther Silver Limited; SPM – Scorpio Mining Corporation 0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 0.0 1.0 2.0 3.0 4.0 5.0 6.0
  • 19. Contact Darren Blasutti President and CEO dblasutti@us-silver.com 416-848-9503 www.us-silver.com

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