Us silver gold corp pres sep 7 2012 v3


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Us silver gold corp pres sep 7 2012 v3

  1. 1. A New Company Built For GrowthSEPTEMBER 2012TSX:USAOTCQX:USGIF
  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 Established, Long-life Operating Assets2.6 - 2.8Moz Silver (Ag) Strong Operating Cash Flow Significant Ongoing Brownfield Expansion20,000- 25,000 Dominant Land Position in the Silver Valleyoz Gold (Au) Favourable Environment for Accretive Acquisitions Proven Management & Board 5 M oz Ag by 2014 3
  4. 4. 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 EnergyDirector to 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 4
  5. 5. 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 EVP Strategic Development at Kinross Gold, where he oversaw corporate development and exploration until hisHugh Agro retirement 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.Director • Accredited with Institute of Corporate Directors and sits on Boards of Tembec and Chemtrade Logistics IncDarren Blasutti • President and CEO 5Director
  6. 6. Asset Overview
  7. 7. Asset OverviewGalena Mine Complex – 100%• High grade Cu-Ag and Pb-Ag• Produced over 240 M oz Ag historically• Over 38.0 M oz Ag in Reserves & Resources• Galena area operating• Coeur area re-starting in Q4 2012• In-fill exploration and development phase atCaladay Lead Zone• Excess hoisting and milling capacityDrumlummon Mine – 100%• High grade Au and Ag• Produced over 1 M oz Au and 12 M oz Ag• Extensive infrastructure• Recently acquired adjacent Belmont mine• Focus on resource expansion Geographic Concentration Of Assets 7 7
  8. 8. Galena Mine Complex Galena Area2ndlargest • First half 2012 production - 1.08 M oz Ag @ $20.20/ounce from 25 production stopes, includes almost a month of lost time due to shaft and mill re-habilitation • Two separate mills with total 1,500 tons/day capacity, currently operating at 60%Primary silver • Consistent mill recovery rates of 96% for silver-copper andproducer in 92% for silver-lead oresthe U.S. • Expect to increase reserves in 2012 and extend mine life • Continued exploration success and mine life extension on 2400, 4300 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 Large Reserve and Resource Base 8 8
  9. 9. Galena Mine Complex Coeur Area • 3.3 million oz of M&I Ag resources at average grades of 16.6 oz/t Ag and 0.72% Cu • Targeting 6.0 M oz Ag Resource from 2012 and 2013 drill program • Re-development started February 2012 at a cost of $5 millionAdditional • First production expected in Q4 2012 with full production estimate of 500,000 oz Ag per year by end of 2013Production Caladay Lead Zone • Re-habilitation completed and drilling commenced in the 3 rd quarter • Contains a mineable resource between the 3900 and 5500 levels, readily accessible from existing workings • Mineralization comprises broad areas of Ag and Pb 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 Reducing Cash Costs in 2013 and Beyond 9 9
  10. 10. Galena Mine Complex Exploration UpsideExploration budget of 93,700 feet has been approved for 2012 10
  11. 11. Drumlummon Mine First half 2012 production of 12,100 oz Au and 216,200 oz Ag First half 2012 mill recoveries averaged 91% for Au and 84% for Ag 2012 Plan estimates 110,000 tons of ore at 0.25/t Au and 4 oz/t Ag Labour and cost reductions under way in Q3 2012. All required permits in place under small miners exemption Continued resource expansion and mine life extension success at Drumlummon and the recently acquired Belmont mine 2012 exploration success at the Frankie Vein, Sampson area of the Drumlummon Vein, the New Years Vein and high grade silver veins in the Neenan area near Bald Butte moly projectProcess synergies available given excess Galena milling capacity 11 11
  12. 12. 12Drumlummon Mine – Claims and Property Boundaries
  13. 13. Near Term Operating GoalsUSA -Tomorrow Ensure an effective and efficient integration while maximizing operating synergies of ~$6-7 million5.0Moz Ag by 2014 Deliver Coeur area re-development on time and on budget in Q4 2012 Prepare preliminary analysis of the Caladay lead/silver zone for future bulk mining development Assess the Belmont property for mid to late 2013 development Build and communicate to the investment community the 1-year, 3-year and Life of Mine operating plan Unlocking value of existing operating assets 13 13
  14. 14. Capital Structure and Key Operating Metrics Symbol/Exchange USA-T Market Cap (CDN$ M) – close Sep 6, 2012 142.0 Shares Basic (M) 59.4 ITM Options & Warrants (M) 2.6 OTM Options & Warrants (M) 3.5 Shares FD ITM (M) 62.0 Cash (US$ M)* $ 21.1 Working Capital (US$ M)* $ 32.2 Debt (US$ M)* $ 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% 14* As at June 30, 2012, M = Million
  15. 15. Strategic Objectives
  16. 16. Strategic Objectives Exceed 5.0 M oz Ag by end of 2014:Roadmap For 1 Execute on brownfield expansionsSuccess 2 Assess exploration, processing and capital synergies with geographically focused assets 3 Access accretive per share acquisition opportunities in North America 4 Secure line of credit to support future growth initiatives Grow earnings and cash flow per share 16 16
  17. 17. Junior Silver Producer Multiples EV / M&I Resources EV / 2013E EBITDA $6.00 $5.51 $5.28 $5.26EV / M&I Resources (US$/oz AgEq) $5.00 EV / 2013E EBITDA $4.00 $3.32 Average: $2.95 Average: 3.37x $3.00 $2.63 $2.27 $2.00 $1.00 $0.82 $0.51 $0.00 FVI EDR FR SVM USA HL SPM RVM Increase visibility within investment community 17
  18. 18. Re-Rating Potential U.S. Silver & Gold will be attractively positioned amongst its mid-tier silver producer peers and could potentially experience a significant re-rating $1,200 Mid-Tier Silver ProducersEnterprise Value (US$ MM) EDR $900 SVM $600 FVI $300 U.S. Silver & Gold $0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2012 Production Guidance (MM oz Ag Eq.)Companies Included: FVI – Fortuna Silver Mines Inc.; SVM – Silvercorp Metals Corp.; EDR – Endeavour Silver Corp.1Enterprise Value is calculated on a fully-diluted ITM basis2Silver equivalent based on Cormark research 2012 metal prices of US$1,800/oz Au, US$32.50/oz Ag, US$0.90/lb Pb, US$0.89/lb Znand US$3.71/lb Cu3U.S. Silver & Gold production guidance is sum of RX Gold Q1 results annualized and latest U.S. Silver production guidance Attractively Positioned Among Peers
  19. 19. Why USA?We’re 2nd largest primary silver producer in the U.S. Strong operating and market fundamentalsbuilt for Executing on brownfield expansion opportunitiesgrowth Large land package with significant organic upside Experienced management team Disciplined strategy for targeted acquisitions Catalysts in place for improved valuation 19
  20. 20. Contact Darren Blasutti President and CEO 416-848-9503
  21. 21. Appendix
  22. 22. GALENA LONG SECTION LEGEND Ag - Pb Veins 0 2500 Caladay Shaft Ag - Cu Veins feet Callahan Shaft Major Production Areas No. 3 Shaft Galena ShaftCoeur Shaft 1200 2400 2800 Sea Level 3000 3400 Silver 3700 Vein 4000 4300 4600 4900 5200 5500
  23. 23. DRUMLUMMON VEIN LONG SECTIONSW (Looking Northwest) NENine-HourWorkings B D A/B Block 400 Level OPEN A South Decline Drumlummon C Zone 800 1000 Level OPEN OPEN 1200 1400 1600 Level #2 Shaft #1 Shaft Drilled (assays pending) Ore Shoots Grade x Thickness (oz.ft) Existing workings A Jubilee 1.5+ 0 1000 Ore shoots B Sampson 1.00 - 1.49 Drilling station C Pixley 1 0.50 - 0.99 feet Mined stopes D Pixley 4 0.20 - 0.49 D Block No significant intersection
  24. 24. CALADAY LEAD ZONE Projected on Galena East - West Section 0 1000 feet No. 3 Galena Caladay Shaft Shaft Shaft Caladay Lead Zone* Levels Defined Indicated 2400 Inferred 3000 3700 4300 4900 5500* Insufficient work executed for 43-101 reporting