SILVER MINES LIMITED — Investor Presentation 2021

Nov 15, 2021

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Precious Metals Summit, Zurich Presentation November 2021

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Disclaimer

The material in this presentation contains certain forecasts and forward-looking information, including regarding possible or assumed future performance or potential growth of Silver Mines Limited (“SVL”). Such information is not a guarantee of future performance and involves unknown risks and uncertainties, as well as other factors, many of which are beyond the control of SVL. Actual results and developments may differ materially from those expressed or implied by these forward-looking statements depending on a variety of factors.

No representation or warranty, expressed or implied, is made or given by or on behalf of SVL, any of SVL’s directors, or any other person as to the accuracy or completeness or fairness of the information or opinions contained in this presentation and no responsibility or liability is accepted by any of them for such information or opinions or for any errors, omissions, misstatements, negligent or otherwise, or for any communication written or otherwise, contained or referred to in this presentation.

Accordingly, neither SVL nor any of the SVL directors, officers, employees, advisers, associated persons or subsidiary undertakings shall be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying upon the statement or as a result of any admission in, or any document supplied with, this presentation or by any future communications in connection with such documents and any such liabilities are expressly disclaimed.

Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities.

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Silver Mines Limited Introduction

• Key Assets

• The Bowdens Silver Project is located in central New South Wales, Australia.

• The consolidated project area comprises 2,007km[2] (490,000 acres) of titles covering approximately 80km of strike of the highly mineralised Rylstone Volcanics.

• The Bowdens Silver Project is the largest undeveloped silver deposit in Australia and one of the largest in the world with substantial resources and a considerable body of high quality technical work already completed.

Share Register

• In February 2021, the Company concluded a successful equity placement to raise A$30 million.

• The placement was well supported by Australian and North American institutional investors and has resulted in several new funds joining the Silver Mines share register.

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Capital Structure (ASX: SVL)
AUD USD
Shares on Issue (m) 1,291.8 1,291.8
Share Price ($) 0.23 0.17
Undiluted Market Capitalisation ($m) 297.1 222.8
Cash ($m, as at end September 2021) 32.4 24.3
Enterprise Value ($m) 264.7 198.5
Options
3 Year Milestone @ A$0.20 5.0m
Directors
Keith Perrett Non-Executive Chairman
Anthony McClure Managing Director
Jonathan Battershill Non-Executive Director
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Investment Highlights

The largest silver development project in Australia , and one of the largest globally, with a 1 current JORC-compliant Resource base of 275 Moz Ag Eq (84% M+I Resource).

Bowdens well-advanced, with production expected in 2023-24 – Feasibility Study 2 completed and government applications submitted – received positive responses from regulators and various stakeholders.

Low initial capital requirement of A$246m / US$185m to develop a 2Mtpa project, producing an average of 6Moz AgEq p.a. over the first 3 years of production at an average cash cost of US$9.15/oz, underpinning strong EBITDA and cash flow.

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Single open-cut mine with uncomplicated mining, a low strip ratio and metallurgy with an initial mine life of 16 years.

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Assets located in a low sovereign risk jurisdiction for mining development with ready access to existing infrastructure. The COVID-19 pandemic is contained in Australia, and the vaccine rollout is advanced.

Considerable exploration potential. Extensive drilling underway and has confirmed three new high-grade discoveries underneath the current open-cut design. Scoping Study for a potential underground development has commenced.

Committed and highly experienced technical and management team.

Strong fundamentals underpin a positive outlook for the silver market over the medium to long term.

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Bowdens Silver Project: Overview

Timeline of Major Milestones

Highlights

• The largest silver development project in Australia , and one of the largest globally, with a current JORC-compliant Resource base of 275Moz AgEq.

September 2017 Mineral Resource complete (275 Moz AgEq) May 2018 Ore Reserve complete (97 Moz AgEq) June 2018 Feasibility Study complete May 2020 EIS Complete, DA Submission 2021 – 2022 Approval Processes & Optimisation

• 100% owned asset located in a low sovereign risk jurisdiction for mining development with ready access to existing infrastructure.

• Bowdens well-advanced, with production expected in 2023-24

• Feasibility Study completed and government approvals submitted – received positive responses from regulators and various stakeholders suggesting there is a clear pathway to development approval.

• Low initial capital requirement of A$246m / US$185m to develop a 2Mtpa project, producing an average of 6Moz AgEq over the first 3 years of production at an average cash cost of US$9.15/oz, underpinning strong EBITDA and cash flow.

• Considerable exploration potential at the Bowdens Silver Project, with extensive drilling underway (30,000m program) and confirmed significant high-grade extensions to mineralisation close to mine.

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Reserves and Resources [(1)]
Tonnes Grade Contained Metal
Ag Zn Pb AgEq Ag Zn Pb AgEq
Mt g/t % % g/t Moz kt kt Moz
Ore
30 69 0.44 0.32 101 66 131 95 97
Reserve
Mineral
128 40 0.38 0.26 67 163 486 333 275
Resource
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Notes: (1) Calculations have been rounded to the nearest 100,000 t, 0.1 g/t silver and 0.01% zinc and lead grades respectively. The Ore Reserve is reported by economic cut-off grade with appropriate consideration of modifying factors including costs, 5 geotechnical considerations, mining and process recoveries and metal pricing. Bowdens’ silver equivalent: Ag Eq (g/t) = Ag (g/t) + 33.48Pb (%) + 49.61Zn (%) calculated from prices of US$20/oz silver, US$1.50/lb zinc, US$1.00/lb lead and metallurgical recoveries of 85% silver, 82% zinc and 83% lead estimated from test work commissioned by Silver Mines Limited.

Bowdens Silver Project: Study Work

Unit Physical Metrics Production Life Years Ore Mined Mt Waste Mined Mt W:O Strip Ratio x Ag Recovered in Concentrate Moz Zn Recovered in Concentrate kt Pb Recovered in Concentrate kt Financial Metrics Revenue $m Operating Expenses $m Operating Margin $m Capital Costs Initial $m LOM Sustaining $m Unit Costs (Silver Basis) C1 Costs $/oz All in Sustaining Cost (AISC) $/oz	2018 Upside Case2 16.5 29.9 48.2 1.60 52.91 108.0 79.3 AUD USD 2,162.0 1,621.5 1,353.9 1015.5 808.0 606.0 AUD USD 246.0 184.5 53.9 40.4 AUD USD 15.52 11.64 17.53 13.15	2018 Base Case1
		16.5 29.9 48.2 1.60 52.91 108.0 79.3
		AUD USD
		1,899.5 1,424.7 1,340.8 1,005.6 558.7 419.0
		AUD USD
		246.0 184.5 53.9 40.4
		AUD USD
		15.47 11.60 17.25 12.94

1 2018 Feasibility Study Base Case: Silver prices assumed were LOM averages US$20.90 /oz, a zinc price of US$1.25 /lb and a lead price of US$1.00 /lb.

2 2018 Feasibility Study Upside Case: Silver prices assumed were LOM averages US$25.00 /oz, a zinc price of US$1.25 /lb and a lead price of US$1.00 /lb. For further information refer to ASX release of 14[th] June 2018.

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Bowdens Silver Project: Lachlan Fold Belt Geology

• The Ordovician Macquarie Arc/Lachlan Fold Belt of Eastern Australia contains preserved porphyry volcanic arc environments.

• • Macquarie Arc of NSW contains world-class; – Cadia/Ridgeway,

• – Cowal,

• – Northparkes and others

• • The Bowdens portfolio demonstrates that the eastern limb of the Macquarie Arc has the potential for significant mineral systems.

• • Substantial geological study work completed by the University of NSW.

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Bowdens Silver Project: Immediate Regional Geology

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• Extensive tenement holding (2,007 km[2] 496,000 acres) controlled by Silver Mines.

• • Wide range of prospective deposit types over different time periods (Ordovician, SiluroDevonian, Carboniferous and Permian).

• • The Ordovician Macquarie Arc/Lachlan Fold Belt of Eastern Australia contains preserved porphyry volcanic arc environments.

• • Mineral deposit styles/potential include: – Cadia/Ridgeway style Porphyry (Cu-AuMo)

• – Epithermal (Au-Ag)

• – McPhillamy’s style Shear hosted gold with base-metal association

• – Woodlawn style Volcanogenic Massive Sulphide (VMS)

• – Bowdens Style epithermal (Ag-Zn-Pb)

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Bowdens Silver Project: Extensions

• Northwest Zone, Aegean and Bundarra Zones contains highgrade silver directly under the planned open cut pit.

• • Current drilling is demonstrating that the Northwest and Aegean Zones are likely to be connected.

• • Each of the three discoveries open in several directions.

• • Northern Feeder Vein identified – a substantial ultra high grade addition.

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Bowdens Silver Project: Extensions (Cont’d)

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Bowdens Silver Project: Extensions (Cont’d)

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Expanded Program and Scoping Study

• Recent drilling at the Northwest, Aegean and Bundara Zones has demonstrated considerable highgrade potential immediately beneath the proposed open-pit mine development

• 30,000 metres diamond drilling focussed on three discovery zones below the planned open-cut mine.

• 4 rigs currently on site.

• Drilling will continue until at lease through first quarter calendar 2022.

• Underground preliminary resource assessment commenced.

• Scoping Study for potential underground mining scenarios commenced

• GR Engineering, Entech and KYSPYmet commissioned for the study.

• Study results planned for first half 2022.

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Bowdens Silver Project: Key Conclusions

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 
Considerable exploration potential at the Bowdens Silver
Project, with extensive drilling (30,000 metres with 4
The largest silver development project in Australia , and one
diamond rigs) underway and confirmed significant high-grade
of the largest globally, with a current JORC-compliant
extensions to mineralisation close to mine. Scoping Study
Resource base of 275 Moz Ag Eq (84% M+I Resource).
commenced for a potential underground development in
addition to the current open-cut development.
 
Bowdens well-advanced, with production expected in 2023- Assets located in a low sovereign risk jurisdiction for mining
24 – Feasibility Study completed and government development with ready access to existing infrastructure.
applications submitted – received positive responses from The COVID-19 pandemic is contained in Australia, and the
regulators and various stakeholders. vaccine rollout is advanced.
 
Low initial capital requirement of A$246m / US$185m to
develop a 2Mtpa project, producing an average of 6Moz Ag
Single open-cut mine with uncomplicated mining, a low strip
p.a. over the first 3 years of production at an average cash
ratio and metallurgy with an initial mine life of 16 years.
cost of US$9.15/oz, underpinning strong EBITDA and cash
flow.
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Anthony McClure
Managing Director
Silver Mines Limited
+61 2 8316 3997
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Appendices

Other Exploration Assets

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Barabolar Project: Unlocking a Major Mineralised System

• Barabolar Project area located 10 kilometres northwest of Bowdens

• 9000 x 2000 metre corridor of base-metal and precious metal soil anomalies

• Mineralised skarn mapped over 5000 by 800 metres

• Porphyry system type alteration assemblages

• Several high order prospects:

• Cringle Au-Ag epithermal

• Kia Ora Skarn (and proximal porphyry): Cu-Ag-Zn-Au

• Botobolar / Hayshed: abundant coarse molybdenite in associated felsic porphyry

• Induced Polarisation (IP) program (~30 line kms) completed and substantial gravity survey completed with interpretation being finalised

• Drilling program first half 2022

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Au-Ag Epithermal
Pipeclay porphyry
(off section to south)
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Tuena Gold Project

• Located south of Blayney in New South Wales.

• • Historic goldfield with minimal exploration work in the modern era.

• • Clear geological analogies to the McPhillamys Gold Project (2.0 Moz gold).

• • Mineral system and old gold workings extend over at least 6 kilometres of strike.

• • Reconnaissance mapping is identifying previously unrecorded historic workings and shear zones with substantial width.

• • Airborne magnetics and radiometrics survey completed. • Tenement position expanded with 747 km[2] of exploration licenses, all granted, all 100%.

• • Results from the 4,000m initial drilling program included: – 4.0m @ 6.88 g/t gold from 98m in TRC20010.

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Competent Persons Statements

Ore Reserve

The information in this report that relates to Ore Reserves within the Bowdens Silver Project is based on information compiled or reviewed by Mr Adrian Jones of AMC Consultants Pty Ltd who is a consultant to the Company. Mr Jones is a member of the Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC code). Mr Jones consents to the inclusion in this report of the matters based on the information in the form and context in which it appears. Mr Jones visited the Bowdens mine site during April 2017 to review the operations, consider the conditions of the site, and assess the data collection methods and techniques used by site personnel.

The Ore Reserve has been prepared by Mr Adrian Jones, AMC Consultants Pty Ltd, after peer review of the mining section of the Feasibility Study. Other experts relied upon include H & S Consultants Pty Ltd, GR Engineering Services Limited, ATC Williams Pty Limited. and Jacobs Australia Pty Limited, for Mineral Resources, Metallurgy & Process Design and Tailing Storage Facility design. Work on environmental, marketing and logistics and the financial modelling were undertaken by other consultants on behalf of the Company and certified by representatives of Silver Mines.

Mineral Resources

The information in this report that relates to Mineral Resources is based on work compiled by Mr Arnold van der Heyden who is a Director of H & S Consultants Pty Ltd. Mr van der Heyden is a Member and Chartered Professional (Geology) of the Australian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC code). Mr van der Heyden consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.

Exploration and Drill Results

The information in this report that relates to mineral exploration drill results from the Bowdens Silver Project and Tuena Gold Project is based on information compiled or reviewed by Dr Darren Holden who is an advisor to the company. Dr Holden is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration, and to the activity being undertaken, to qualify as a Competent Person as defined in the 2012 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC code). Dr Holden consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.

The information in this presentation that relates to Exploration Results and Mineral Resources has been extracted from various Silver Mines (SVL) ASX announcements and are available to view on the SVL website at www.silvermines.com.au or through the ASX website at www.asx.com.au (using ticker code "SVL").

Silver Mines confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. Silver Mines confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

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