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U.S. Silver and Gold Corporate Presentation - August 2012


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U.S. Silver and Gold Corporate Presentation - August 2012

  1. 1. A New Company Built For GrowthAUGUST 13, 2012TSX:USA
  2. 2. Forward Looking Statement – Safe HarbourCertain information in this presentation may contain forward-looking statements. This information is based on currentexpectations that are subject to significant risks, assumptions and uncertainties that are difficult to predict and the risk thatregulatory approvals may not be obtained or that conditions of closing will not be satisfied or waved within the timeframecontemplated. Additional potential risks include: that U.S. Silver & Gold may not achieve anticipated synergies; loss of keypersonnel; reduction in the anticipated cash levels; and, not achieving production goals stated. Actual results might differmaterially 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-lookingstatements. Forward-looking statements are not guarantees of future results and conditions but rather reflect our current viewswith respect to future events and are subject to risks, uncertainties, assumptions and other factors, and actual results andfuture 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 assume no obligation to update the forward-lookingstatements, or to update the reasons why actual results could differ from those reflected in the forward looking-statementsunless and until required by securities laws applicable to the U.S. Silver & Gold. Additional information identifying risks anduncertainties is contained in filings by U.S. Silver & Gold with the Canadian securities regulators, which filings are available 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 arerecognized and required by Canadian Securities Laws, the United States Securities and Exchange Commission does notrecognize them. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has beenmade that the mineralization could be economically and legally produced or extracted at the time the reserve determinationhas been made. U.S. investors should not assume that all or any part of measured or indicated resources will ever beconverted into reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence and as towhether they can be mined legally or economically. Accordingly, information concerning descriptions of mineralization in thispresentation 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 hasapproved the applicable contents of this presentation. 2
  3. 3. USA Today - Production2.7M Established Operating Assets Strong Operating Cash Flowoz Ag Focused on Organic and Brownfield Expansion Dominant Land Position in Silver Valley25,000 Favourable Environment for Accretive Acquisitions Proven Management & Boardoz Au 5M oz Ag by 2014 3
  4. 4. Asset Overview
  5. 5. Near Term Operating Milestones Maximize operating synergies of ~$6-7 million and corporate synergies of ~$3-4 million per yearUSA - Tomorrow Deliver Coeur re-development on-time and on-budget in Q4, 20125.0M Prepare preliminary analysis of the Caladay lead/silver zone for future bulk mining developmentoz Ag by 2014 Assess the Belmont property for mid to late 2013 development Build and communicate to the investment community the 1-year, 3-year and Life of Mine operating plan Unlocking value of asset base 5 5
  6. 6. Asset Overview – Galena Mine Complex Galena Mine High grade copper-silver & lead-silver mine Over 200 million ounces of silver produced to date Reserves of 23.2 M oz Ag at average grade of 14.30 oz/t and M&I Resources2 nd of 11.9 M oz Ag at average grade of 13.7 oz/t First half 2012 production of 1.08 M oz Ag at $20.20/ounce Two operating mills Galena and Coeurlargest - 1,400 tons/day capacity currently at 65% - Consistent mill recovery rates of 96% for silver-copper and 92% for silver-lead oresPrimary silver Continued exploration success and mine life extension on 2400, 4300producer in the U.S. and 5200 levels - 1,434 oz/t silver over 1.6’ and 112.1 oz/t silver over 2.8’ extending silver vein down dip - 110 oz/t silver extension of 350 vein - Resource development in lead zone at 4900 level Continue to increase reserves and extend mine life Large Reserve and Resource 6 6
  7. 7. Asset Overview – Galena Mine Complex Coeur Mine Historical production of 39 million ounces of silver - 3.3 million oz of M&I silver resources at average grades of 16.6 oz/t silver and 0.72% copper500,000 - Targeting 6.0 M Oz Ag Resource from 2012 and 2013 drill program Re-development started February 2012oz Ag - Estimated development costs of $5 millionTargeted production First production expected in Q4, 2012 with full production estimate at 500,000 oz Ag per year by end of 2013 Drilling commenced; 2,500 feet of 17,000 foot program completed Initial Production Q4 2012 7 7
  8. 8. Asset Overview – Galena Mine Complex Caladay Lead Zone Initial joint venture between Callahan Mining, ASARCO and Day Mines sank a 5,100 foot shaft in the 1960’s Drilling in the 1980’s by Coeur d’Alene Mines located a silver-lead deposit 100% owned by U.S. Silver & Gold Inc.Significant Re-habilitation completed and drilling commenced in the 3rd quarter Appears to contain a mineable resource between the 4900 and 5500Brownfield levels, readily accessible from existing works - Mineralization comprises broad areas of silver and leadExpansion mineralization often associated with high grade veins - Zones appear much wider (up to 25 to 30 feet) with grades in the range of 7 to 9 oz Ag and 7% to 10% Pb - Area supports lower cost bulk mining methods Update expected by year-end on economic potential of mineralized area Brownfield Organic Growth 8
  9. 9. Galena Complex Exploration Upside CDA “GAP” Western Argentine Coeur Mine Vein Deep Calady Mine Coeur Mine Deep Lead-Silver Silver VeinExploration budget of 93,700 feet has been approved for 2012 9
  10. 10. Asset Overview – Drumlummon MineHigh grade narrow vein gold and silver underground mine with extensive infrastructureHistorical production of 1 million ounces of gold and 12 million ounces of silverAll required permits in place under small miners exemption2012 Plan estimates 110,000 tons of ore at 0.25/t Au and 4 oz/t AgFirst half 2012 production of 12,100 oz Au and 216,200 oz AgFirst half 2012 mill recoveries averaged 91% for Au and 84% for AgContinued resource expansion and mine life extension success at Drumlummon and the recentlyacquired Belmont mine - $5.5 million exploration budget approved for 2012 - 106,000 feet of drilling to date - Exploration success at the Frankie Vein, Sampson area of the Drumlummon Vein and the New Years Vein, discovered in the foot wall of the Charly Vein - Discovery of high grade silver veins in the Neenan area near Bald Butte moly projectPotential synergies through excess milling capacity at Galena 10 10
  11. 11. Drumlummon Mine – Underground Long Section DDH12-567 : 0.973 oz/t Au over 4’ 1.116 oz/t Au over 1’ DDH12-569 : 0.416 oz/t Au over 2’ 0.319 oz/t Au over 14’ DDH12-601 : 0.504 oz/t Au over 6’ Resource Expansion and Mine Life Extension 11 Success 11
  12. 12. 12Drumlummon Mine – Claims and Property Boundaries
  13. 13. Capital Structure and Key Metrics Pro-Forma U.S. Silver & Gold Symbol/Exchange USA-T Market Cap (CDN$ MM) – close August 10, 2012 131.7 Shares Basic (MM) 59.4 ITM Options & Warrants (MM) 8.5 OTM Options & Warrants (MM) 3.5 Shares FD ITM (MM) 67.9 Cash (US$ MM)* $ 21.1 Working Capital (US$ MM)* $ 33.0 Debt (US$ MM)* $ 8.2 First half Production oz (Ag) 1,295,300 First half cash costs per oz (Ag) $ 20.36 First half Production oz (Au) 12,100 Recoveries (Ag) 90.0% Recoveries (Au) 91.0% 13* As at June 30, 2012
  14. 14. Strategic Objectives
  15. 15. Strategic Objectives Ensure an effective and efficient integration 1 of the two organizationsExceed 2 Assess exploration, milling and capital synergies with geographically focused assets5.0M 3 Growth through exploration and accretive acquisitions in North Americaoz Ag by 2014 Secure line of credit to support future growth 4 initiatives 5 Increase visibility within the investment community Experience with more than 100 transactions 15 15
  16. 16. Management Team Overview • Former SVP Corporate Development and Investor Relations for Barrick Gold, reported to President and CEODarren Blasutti • Led Barricks strategic development for over 13 years executing over 25 gold mining transactions including Sutton Resources,President and CEO, Homestake Mining, Placer Dome, consolidation of the Cortez property from Rio Tinto. Responsible for creation of Barrick Energy toDirector hedge Barrick’s exposure to energy prices • Over 35 years of experience in operations, management, engineering, and exploration for underground and open-pit minesRobert Taylor • Most recently VP and President North American Operations for Kinross Gold where he was responsible for all operationsCOO and exploration • Former VP, Mine Operations at Stillwater Mining in Montana • Over 15 years of progressive financial leadership experience and brings extensive senior management expertiseWarren Varga • Most recently Senior Director, Corporate Development at Barrick Gold CorporationCFO • Member of the Canadian Institute of Chartered Accountants and a member of the Chartered Financial Analyst Institute • Over 33 years experience in mine engineering and managementSteve Long • Senior manager for underground mining operations for Newmont Mining Corporation, Barrick Gold, Echo Bay andSVP, Operations Homestake MiningJim Atkinson • Licensed Professional Geologist, over 40 years of experience in exploration geologyVP, Exploration • Completed more than a dozen exploration programs across North AmericaPeter McRae • Most recently at Weil, Gotshal & Manges LLP, a major international law firm based in NYVP, General • Focused on private equity funds, public and private companies acquisitions and divestituresCounsel 16
  17. 17. Board of Directors Overview • Over 30 years of experience as a global finance executiveGordon Pridham • Extensive special committee and public board experience with a track record of creating value for shareholdersChairman • Serves on the public company boards of Newalta Corporation and Titanium Corporation, where he is Chairman of the Board • Former SVP Corporate Development and Investor Relations for Barrick Gold, reported to President and CEODarren Blasutti • Led Barricks strategic development for over 13 years executing over 25 gold mining transactions including Sutton Resources,President and CEO,Director 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 • Former EVP Strategic Development at Kinross Gold, where he oversaw corporate development and exploration until his retirementHugh Agro in 2009Director • Held senior positions with Placer Dome Canada and Deustche Bank • Geologist with over 40 years experience as an executive for 20 public, junior exploration companiesJohn Brock • Participated in 12 major mineral deposit discoveries in north and western Canada, Nevada, Mexico, and EcuadorDirector • Currently CEO of Pacific Ridge Exploration and an advisor to the Manex Resources Group • Retired in 2009 as EVP Exploration and Corporate Development at Barrick GoldAlex Davidson • 2005 AO Dufresue Award to recognize exceptional achievement and distinguished contribution to mining exploration in CanadaDirector • In 2003 was named Prospector of the Year by PDAC for discovery of Alto Chicama in PeruLouis Dionne • Former Senior Vice President Underground Operations at Barrick GoldDirector • Currently a director of Detour Gold Corporation and Aurizon Mining Ltd.Alan Edwards • Board of directors for AuRico Gold Inc., Entrée Gold Inc., Copper One Inc., Oracle Mining Corp. and AQM Copper Inc. (Chairman)Director • Senior management positions with Frontera Copper, Apex Silver Mines, Kinross, Cyprus Amax and Phelps DodgeTom Ryley • Board of directors for Newalta Corporation, Tribute Resources and Benefuel Inc., where he is Chairman of the BoardDirector • Former Executive Vice President of Suncor Energy, where he worked for 25 years in a variety of rolesLorie Waisberg • Former Senior Partner at Goodmans LLP, and EVP of Finance and Administration of Co-Steel Inc. 17Director • Accredited with Institute of Corporate Directors and sits on Boards of Tembec and Chemtrade Logistics Inc.
  18. 18. Why USA? 2nd largest primary silver producer in the U.S.We’re Strong operating and market fundamentals Executing on brownfield expansion opportunitiesbuilt for Large land package with significant exploration upsidegrowth Experienced management team Disciplined strategy for targeted acquisitions Catalysts in place for improved valuation Focused on Execution 18