20120531 impact silver presentation final
TRANSCRIPT
CORPORATE PRESENTATION │ MAY 2012
TSX–V:IPT │ FRANKFURT:IKL │ ISIN:CA45257A1021
DISCLAIMER
Except for historical information, this presentation may contain certain “forward-looking” statements and information relating to
IMPACT that are based on the beliefs of IMPACT management, as well as assumptions made by and information currently available
to IMPACT management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including
but not limited to, without limitations, exploration and development risks, expenditure and financing requirements, title matters, operating
hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with vendors and
strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices, and one-time events.
Should any one or more risks or uncertainties materialize or change, or should any underlying assumptions prove incorrect, actual
results and forward-looking statements may vary materially from those described herein. IMPACT does not assume the obligation to
update any forward-looking statement.
The factors that could cause actual results to differ materially include, but are not limited to, the following: general economic
conditions; changes in financial markets; the impact of exchange rates; political conditions and developments in countries in which
the Company operates; changes in the supply, demand and pricing of the metal commodities which the Company mines or hopes
to find and successfully mine; changes in regulatory requirements impacting the Company’s operations; the ability to properly and
efficiently staff the Company’s operations; the sufficiency of current working capital and the estimated cost and availability of funding
for the continued exploration and development of the Company’s exploration properties.
This list is not exhaustive and these and other factors should be considered carefully, and readers should not place undue reliance
on the Company’s forward-looking statements. As a result of the foregoing and other factors, no assurance can be given as to any such
future results, levels of activity or achievements and neither the Company nor any other person assumes responsibility for the accuracy
and completeness of these forward-looking statements.
George Gorzynski, P.Eng., a Qualified Person under the meaning of Canadian National Instrument 43-101,
is responsible for the technical information in this presentation.
1
• Corporate focus is mining at a profit
• Consistently maintains a strong cash position & zero debt
• 90% of revenues from unhedged silver
• Friendly-to-investor, tightly managed share structure (73M Shares FD)
CORPORATE HIGHLIGHTS
2
TECHNICAL HIGHLIGHTS
• Three operating silver mines
in Mexico feeding a central
processing plant
• Two new mines scheduled for
initial production in late 2012
• Plan to double silver
production in three years
• Ownership of two silver
districts covering 248 square
miles (643 square kilometers)
• Substantial exploration
potential based on extensive
silver mining history
ROYAL MINES OF ZACUALPAN
.
3
LOCATION
• Located a three-hour
drive from Mexico City
with a paved road right
to the front gate of the
plant
• Excellent infrastructure
with modern electric
power grid, ample water
supplies & skilled work
force (99% Mexican)
• Many other significant
mining operations in the
surrounding area
4
HISTORY
• The Royal Mines of Zacualpan
is one of the oldest mining
districts in the Americas with
485 years of recorded mining
history
• Over 2,700 old mine workings
have been catalogued and
form the basis for modern and
effective exploration
• IMPACT Silver bought the
Zacualpan assets in 2006
and then consolidated
ownership of the entire district
for the first time in its history
One of 30 historic processing plants found in the
district attesting to a long history of silver mining
5
MINE PRODUCTION
ROYAL MINES OF ZACUALPAN
• Three producing mines –
San Ramon, Chivo,
Noche Buena
• In 2011 the three mines
averaged 421 tonnes
per day (tpd) at 5.7
oz/tonne (195 g/t) silver
• In 2011 the cash cost per
ounce of silver was $9 net
of lead and zinc credits
• All three mines feed
the central Guadalupe
Processing Plant
This map is reproduced in miniature on following slides
6
MINERAL PROCESSING
GUADALUPE AND CAPIRE PLANTS
OPERATING
• Guadalupe Processing Plant, Zacualpan
• 500-tpd crushing and flotation circuit
UNDER CONSTRUCTION
• Capire Pilot Plant, Mamatla
• 200-tpd Pilot Plant being installed
with expansion plans for 2015
7
NEW MINE DEVELOPMENT #1
OSCAR MINE
OLD CUCHARA MINE
NEW OSCAR MINE
SANTA LUCIA ZONE
8
• The high grade Oscar-
Santa Lucia Zones are
scheduled for production
in late 2012 to replace the
Chivo Mine where grades
are dropping with depth
• Oscar is a silver vein
corridor on the
southern extension
of the past-producing
Cuchara Mine
• Pre-existing Cuchara Mine
mining infrastructure will
contribute to a low capital
costs and rapid mine
development at Oscar
NEW MINE DEVELOPMENT #1
OSCAR MINE
• Oscar and Santa Lucia host high grade veins as found in the following drill holes:
OSCAR CORRIDOR DRILLING HIGHLIGHTS
Drill
Hole
True
Width
(m/ft)
Silver
(g/t)
Gold
(g/t)
Lead
(%)
Zinc
(%)
Z11-44 31m /
101.7ft 291 0.01 0.1 0.4
Including 7.5m /
24.6ft 780 0.02 0.4 1.1
Including 5.8m /
19.0ft 398 0.03 0.2 0.9
Z11-46 5.7m /
18.7ft 1,007 0.07 0.5 1.1
Including 2.8m /
9.2ft 1,128 0.51 0.9 1.4
Including 1.1 /
3.6ft 4,580 0.26 1.7 4.0
Z11-64 6.6m /
21.7ft 223 0.08 0.2 0.5
Z11-74 1.0m /
3.3ft 1,875 0.74 2.7 6.9
Z12-08 23.4 /
76.8ft 115 0.02 0.1 0.4
SANTA LUCIA ZONE DRILLING HIGHLIGHTS
Drill
Hole
True
Width
(m/ft)
Silver
(g/t)
Gold
(g/t)
Lead
(%)
Zinc
(%)
Z09-35 1.4m /
4.6ft 600 0.10 - -
Z09-47 6.3m /
20.7ft 278 0.01 0.2 0.7
Including 3.2m /
10.5ft 467 0.01 0.2 1.1
Z09-50 1.0m /
3.3ft 602 0.02 0.1 0.1
Z09-53 2.4m /
7.9ft 419 0.03 0.3 0.3
Z09-55 1.1m /
3.6ft 372 0.01 0.1 0.2
Z09-58 2.1m /
6.9ft 274 0.10 0.4 1.2
Z10-03 1.1m /
3.6ft 588 0.05 0.4 2.0
Including 1.7m /
5.6ft 394 0.07 1.1 1.6
9
NEW MINE DEVELOPMENT #2
CAPIRE MINE
• The Capire Mine represents a new production center in a new
mining district
• Three-phase strategy to bring Capire to full-scale production in 2015:
o 2012: Construction of 200-tpd Pilot Plant and 5,000 m drill program
o 2013: Pilot Plant production (~200,000 oz silver) to optimize
operating parameters for expansion plans
o 2014: Construction of full scale plant (800-1,500 tpd) with goal to
produce 1M oz silver per year starting in 2015
Capire Mine Site Capire Mine Open Pit Model
Open-Pit
Plant
Site
Tailings Facility
Defined NI 43-101
Mineral Resources Open for
expansion
Open for expansion Capire
Open Pit
3D Model Processing Plant Site
Tailings
Facility
Open for expansion
10
CAPIRE PROJECT
NI 43-101 MINERAL RESOURCE ESTIMATE
Metal Content for Capire Project
Ag (oz) Au (oz) Cu (lbs) Pb (lbs) Zn (lbs)
Measured 3,529,969 14,146 3,389,275 18,234,678 46,140,820
Indicated 3,694,066 16,300 3,693,733 19,029,800 49,522,173
Measured & Indicated 7,224,035 30,446 7,083,007 37,264,478 95,662,993
Inferred 435,959 1,919 475,594 2,260,089 5,823,490
Summary Table Classified Mineral Resources – Measured + Indicated and Separate Inferred
Domain Classification Tonnes Ag (g/t) Au (g/t) Cu (%) Pb (%) Zn (%)
Capire Measured + Indicated 3,104,944 46.46 0.19 0.06 0.33 0.93
Aurora 1 Measured + Indicated 1,807,302 44.50 0.199 0.07 0.36 0.80
Grand Total Measured + Indicated 4,912,246 45.74 0.193 0.06 0.34 0.88
Grand Total Total Inferred 371,066 36.54 0.161 0.06 0.28 0.71
• Initial production planned on higher grade sections
• Drilling is continuing at Capire and other nearby zones to expand mineral resources
11
GEOLOGY
11
METAL DISTRIBUTION IN ORE ZONES
Depth
0 ft (0m)
500 ft (150m)
1,000 ft (300m)
Oscar Mine
San Ramon Mine
Chivo Mine
Noche Buena Mine
Length
500-1400ft (150-420m)
Silver-rich at top
200 – 1,000 g/t+ Ag
Lead & Zinc rich
at bottom
60 – 150 g/t Ag
Gold (Copper)
at depth
Host to high grade
Gold
Mining Level
Carlos Pacheco
Gold-Copper Zone Typical
Mining Width
10 ft (3m)
• Mineral zones in the
Royal Mines of Zacualpan
District tend to be silver-
rich near the top
(commonly 1,000+ g/t)
with increasing lead and
zinc, and decreasing
silver toward the bottom
• New discoveries indicate
that significant gold and
copper may lie at depth
VALLE DE ORO
GOLD POTENTIAL AT DEPTH
• First gold-copper zone found by company prospectors in a
canyon below known silver veins
• Initial drill results on two zones returned high gold values
(see tables below)
• These initial results indicate a potential gold district lying at
depths of 1,000 ft (300 m) below the silver district
• Drilling will test gold targets at depth on other silver veins
HUATECOSCO DRILLING HIGHLIGHTS
Drill
Hole
True Width
(m/ft)
Gold
(g/t /opt)
Silver
(g/t)
Lead
(%)
Zinc
(%)
Z11-48 4.1 m /
13.5 ft
5.22 g/t /
0.15 opt 30 0.7 1.8
Including 0.8 m /
2.6 ft
25.00 g/t/
0.73 opt 50 0.5 1.6
Z11-17
3.2 m /
10.5 ft
3.44 g/t /
0.10 opt 118 0.6 0.8
Z11-19 1.8m /
5.9 ft
3.53 g/t /
0.10 opt 321 0.4 0.6
Z11-20 9.5 m /
31.2 ft
3.97 g/t /
0.12 opt 49 1.7 2.6
Including 4.2 m /
13.9 ft
6.96 g/t /
0.20 opt 84 2.9 5.1
CARLOS PACHECO DRILLING HIGHLIGHTS
Drill
Hole
True Width
(m/ft)
Gold
(g/t /opt)
Silver
(g/t)
Copper
(%)
Z08-65 2.1 m /
6.9 ft
11.3 g/t /
0.33 opt 18 -
Including 1.2m /
3.9 ft
18.8 g/t /
0.55 opt 24 -
Z08-68 2.9 m /
9.5 ft
19.6 g/t /
0.57 opt 68 0.29
Including 1.0 m /
3.3 ft
49.7 g/t /
1.45 opt 59 0.31
Including 1.7 m /
5.6 ft
31.1 g/t /
0.91 69 0.31
13
RAPID EXPLORATION
TO MINE DEVELOPMENT
RESEARCH
Compile old
mines/
prospects from
historic maps
DRILLING
Drilling in
phases
based on
success
MINE
DEVELOPMENT
Mine Planning,
Permitting and
Construction
FIELD WORK
Surface &
underground
sampling,
mapping
MINE
PRODUCTION
AND CASH
FLOW
More than
2,700 old
mine and
prospects
catalogued
to date
Select
areas and
prospects
for drilling
• Capire (North)
• Pilarica
• Condesa &
Cuchara North
• Carlos Pacheco
• Huatecosco
• San Ramon
• Noche
Buena
• Chivo
• Capire
• Oscar
• Santa Lucia
First Drill Hole to Production: 12 – 24 Months
• A cornerstone of IMPACT Silver’s success is rapid mine development to generate
near-term cash flow
• Since 2006, IMPACT’s successful team has discovered and built three new mines
with two additional mines now under construction
(Chivo, San Ramon Extensions, Noche Buena)
EXPLORATION AND MINE DEVELOPMENT PROCESS FLOWCHART:
14
ZACATECAS OPTION AGREEMENT
DEFIANCE SILVER CORP. (TSX.V:DEF)
• IMPACT Silver optioned its
200-tpd Santa Gabriela
Processing Plant and ten
mineral concessions in
Zacatecas, Mexico to Defiance
Silver for cash and a 16.5%
share position (September 2011)
• Defiance Silver plans to marry
IMPACT’s processing plant with
their San Acacio Silver Mine
(18M oz Silver defined) and
begin production in 2013
Santa Gabriela Processing Plant
San Acacio Silver Mine
15
ROYAL MINES OF ZACUALPAN
SILVER PRODUCTION
2011 2010 2009 2008 2007 2006 % Change
2006-2011
Total tonnes processed (t) 154,289 131,348 114,340 102,426 99,918 68,173 +126%
Tonnes processed per day (t) 424 360 313 280 274 196 +116%
Silver (oz) Production 833,607 750,259* 823,571 645,668 349,949 465,673 +79%
Lead (t) Production 731 734 969 813 601 375 +95%
Zinc (t) Production 1,248 1,212 1,098 1,053 976 725 +72%
Revenue per production tonne
sold $171 $123 $110 $90 - - +90%
Direct cost per tonne sold $70 $63 $60 $55 $44 $60 +17%
• Consistent organic growth with low-cost production
• 2011 direct cost per tonne sold averaged $70 per tonne or $9 per ounce
of silver net of lead and zinc credits
*Silver production was marginally down 9% in 2010 because the Company reduced the cut-off grade of the ore mined due to higher silver prices
16
CONSISTENTLY PROFITABLE
2011 2010 2009 2008 2007 2006*
% Change
2006-2011
Revenue $24.3 $16.7 $12.2 $8.9 $7.3 $7.0 +247%
Net Earnings $7.6 $3.4 $1.6 $.66 $.29 $.51 +1,390%
Operating Cash Flow $10.2 $5.4 $3.7 $2.2 $1.9 $2.6 +292%
Cash & Cash
Equivalents $30.8 $18.7 $5.3 $5.4 $10.1 $4.0 +670%
EPS $0.12 $0.07 $0.02 $0.01 $0.01 $0.01 +1,100%
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2006 2007 2008 2009 2010 2011
Revenue
Net Earnings
Operating Cash Flow before changes in non-cash operating capital*
* Royal Mines of Zacualpan project purchased by IMPACT Silver in January 2006
17
LONG-TERM VALUE PLAY
FUNDAMENTAL DATA
Recent
Share Price $1.40
52 Wk
Range
$1.26-
$2.42
Shares
Outstanding
Basic – 68M
Fully Diluted –
73M
Avg Vol
(3m) 120,000
Market Cap 95M Warrants Nil
Largest Shareholders
Sprott Asset Management,12% & Energold Drilling Corp,11%
CAPITAL EXPENDITURE USE EFFICIENCY ($CDN)*
Total funds raised since start
of operations in January, 2006
Property payments, plant & equipment,
and exploration expenditures
Cash Position
(Dec 31, 2011)
$25 Million $38 Million $30.8 Million
18
Share Price Performance, 3 Years Source: Stockwatch, May 2012
FUTURE PLANS AND GOALS
2012
• Maintain production while completing construction of two new mines
at Oscar and Capire
• Continue aggressive exploration to accelerate organic growth at the
Royal Mines of Zacualpan
• With $20M+ of unallocated cash and profitable production, pursue
accretive merger and acquisition opportunities
2013-2015
• Double silver production with expansion of Capire Mine
• Continue exploration and potential development of a deep gold
district beneath the Zacualpan silver district
19
ROYAL MINES OF ZACULAPAN
LONG TERM STRATEGY
To become a Multimillion Ounce Silver Producer with Multiple Processing Centers
1
4
3
2
1. Guadalupe Production Centre
• Oscar Silver Mine scheduled for
production in late 2012
• Current ore feed from San Ramon,
Noche Buena and Chivo Mines
2. Capire Production Centre
• Initial production through 200-tpd pilot
plant, scheduled for late 2012
• Expansion to full scale plant planned for
2015
3. Valle de Oro Gold and Silver Area
• Area of many silver veins with gold
mineralization at depth
• Large drill program underway
• Potential site of a third processing plant
4. Southeast Exploration Area
• Currently mapping numerous old
mine workings, early stage exploration
20
