south american silver q1, 2011 corporate presentation

Value. Growth. Vision

Growing and advancing one of the world’s largest undeveloped silver and indium resources.

TSX: SAC, US OTC: SOHAFCorporate Presentation

A Growth Focused Exploration & Development Company

Q1 2011

www.soamsilver.com


Forward Looking Statements

Certain statements contained herein constitute “forward-looking statements.” Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as “plans,” “intends,” anticipates,” “should,” “estimates,” “expects,” “believes,” “indicates,” “targeting,” “suggests,” “potential,” and similar expressions. These forward-looking statements are based on current expectations and entail various risks and uncertainties. Actual results may materially differ from expectations, if known and unknown risks or uncertainties affect our business, or if our estimates or assumptions prove inaccurate. The Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason.

TSX:SACUS OTC:SOHAF


Investment HighlightsSouth American Silver Corp.

TSX:SACUS OTC:SOHAF

• Experienced management team with track record of successful project development and value creation

• Two large-scale deposits in South America• Malku Khota: one of the world’s largest silver-indium resources• Escalones: high potential copper-gold deposit

• Well defined business plan to drive shareholder value• Leveraged to silver with over $40 of silver value per $1 invested• Attractive investment value relative to peers at low value per oz• Exposure to the high-tech indium market• Potential value from new copper-gold resource• Strong focus on community relations• Well financed into feasibility


Escalones

Malku Khota

World-Class DepositsTwo large-scale assets in South America

• Malku Khota, Bolivia, silver-indium project• 100% owned, bulk mineable open-pit, sediment hosted deposit• Low capital and operating costs as a heap leach or

milling operation• Resource expansion potential with only 4 km of 50 sq km property drill tested• PEA and resource update in end of Q1-2011• Pre-Feasibility process to start in 2011 & Feasibility in 2012• Potential to be one of the top producing silver and indium mines• Funded into Feasibility

• Escalones, Chile, copper-gold project• 100% controlled, large scale target in world-class mining

district near El Teniente• Exploration program and geophysics to start Q1-2011• Resource definition program in 2011• Potential significant copper, gold, silver deposit

TSX:SACUS OTC:SOHAF


Share Capitalization2

TSX:SAC, US OTC:SOHAFIssued &

OutstandingFully

Diluted1

WarrantsOptions

97.8M 114.8M8.6M8.4M

• ~$200 million Market Capitalization•Average trading volume 500,000 shares/day•Well financed with +$30 million estimated in cash at year end1

•Potential NYSE-AMEX listing to increase visibility and liquidity

(1) As of November 8, 2010 with proposed $28 million financing(1) On a fully diluted basis

(2) As of December 16, 2010

Major Shareholders •Zamin—19.7%•Private Swiss investors--19%•SAC Management1 --15%Institutional Ownership•Sprott Asset Management•Front Street•K2 funds•Kudu Partners•U.S. Global Investors


Zamin Group - Strategic InvestmentA Key Regional Player

• Well funded regional player in South American resources industry with major projects in Brazil, Uruguay, Bolivia, and Chile

• Strategic 19.7% investment positions SAC in strong financial and

operational position to advance projects to feasibility• Track record of successfully facilitating South American project

development through relationships with national and state governments in the region

• Portfolio of South American projects with strong government support in permitting, rail and port infrastructure

• Bamin Project-Brazil• Valintine Project-Uruguay• Acquiring assets in Bolivia over past year

TSX:SACUS OTC:SOHAF


0

50

100

150

200

250

300

350

400

450

500

Comparative Resources in the AmericasSecond largest development stage silver resource

Millions of Silver Ounces

Source: Canaccord Report as of January 11, 2011Note: All companies have projects in South and/or North America

MexicoMexicoEl. Salvador MexicoMexico ArgentinaPeru MexicoYukon Nunavut Guatemala Bolivia

Chile

Peru


So.Ameri

can Si

lver

ECU

Sabina

Golden M

inerals

MAG Silve

r

Tahoe R

esource

s

Bear C

reek

Espera

nza

Sullid

en

US Gold

Fortu

naHecl

a

Great P

anther

Alexco

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

Enterprise Value per Resource Oz By project development stage

Source: Canaccord Report January 17, 2011Share prices as of February 8, 2011,Note: All companies have projects in South and/or North America*EV/oz truncated to $20

Development Stage Average >$3/oz

**

Advanced Development Stage Average >$7/oz

ProducersAverage >$14/oz


Development Stage Value CurvePotential value growth with project advancement

Increased value through resource

expansion

Increased market value with

project advancement

Early StageExploration & Development

AdvancedDevelopment Stage

(Reserves)

Production

Average Enterprise Value per Oz of Silver by Stage

ResourceDefinition

PEA

PFS

FS

Permits

Construct

Discovery

$3/oz

$7/oz

$14/oz

Source: Recent average enterprise value per ounce of silver at various development stages for North and South American based projects. Canaccord, Wellington West and Company reports.

Incr

easi

ng M

arke

t Val

ue

Take-Over offers or Partnerships common

at this stage

Production


$50 $500 $5,00010.00

100.00

1000.00

Developers Adv Development Producers

Enterprise Value (US$ Millions)

To

tal R

eso

urc

e S

ize

(M

oz'

s) Coeur D'Alene ($4.60)

Current Silver Company Valuations by Stage (EV/oz)

Source: Canaccord Report January 17, 2011Intierra, February 8, 2011Share prices as of February 831, 2011,Note: All companies have projects in South and/or North America


& ETFs

Silver Supply/DemandSurging investment demand plus improving industrial consumption suggests continued demand growth with flat total supply

Source: GFMS World Silver Survey 2010

& ETF

Total Global Silver Supply

Total Global Silver Demand


Silver Fundamentals PositiveFor continued higher prices• One of the only precious metals not yet to hit all-time nominal highs

from the 1980’s ($35/oz and $50/oz 1980)• Bullish supply/demand outlook• Continued increase in investment and industrial demand for silver• Annual mine production vs total demand remains in short-fall• Few new major deposit discoveries• Projected new production by analysts have failed to have been realized

TSX:SACUS OTC:SOHAF


Indium—a key strategic metalRapidly growing market for high-tech uses

Uses• Indium-tin oxide (ITO) a key component of flat panel displays (FPDs) and touch

screens• High-efficiency thin film solar panels (CIGS Photo-Voltaics), and LED lighting • Fiber optics, specialized and transparent semiconductorsSupply• Global indium use growing rapidly and could surpass available supply from by-

product zinc refining at current price range• One of the most scarce strategic metals due to low recycling and few primary

producers

TSX:SACUS OTC:SOHAF


Indium FundamentalsCompelling supply/demand dynamics

Indium Supply/Demand dynamics

• Indium highlighted in UN and US DOE studies as a critical technology metal in potential shortage, along with several key rare earth metals, due to rapidly increasing growth, low recycling rates and low primary production

• China is largest producer and consumer of indium and has imposed export quotas and tariffs like other key high-technology specialty metals

• Zinc market growing at 1-3% annually with indium market estimated to be 15-20% annual growth

• Current price ~$600/kg with five-year prices from $400/kg to over $1000/kg

Malku Khota Annual Indium Production• Malku Khota projected to be one of the worlds largest indium producers• Potential to represent 10% or more of global mine supply

TSX:SACUS OTC:SOHAF


Indium DemandGrowing demand in high-tech markets

Growth assumptions based on data from Displaybank in LCD TV Association “LCD TV Matters”-Volume 3, Issue 2, February 2010 , Strategies Unlimited, August 2009 , Solarbuzz, Photon International, GFMS , Nanomarkets, and the US Department of Energy Critical Minerals Strategy Report

End-

use

Mar

ket

Dem

and

(ton

nes)

2010 2011E 2012E 2013E 2014E 2015E 2016E0

500

1000

1500

2000

2500Solar Energy

LED Lighting

LCD Flat Panels

2010 total indium production level

5 year projected demand growth


Indium FundamentalsZinc Production (thousand tonnes)

U.S

. Ind

ium

Dem

and

(ton

nes)

Zinc Production vs. Indium Demand (U.S.)

Source: U.S Department of Energy: Critical Materials Strategy, December 2010; Zinc Production USGS Materials Flow of Zinc in the US. 1850-1990, USGS Minerals Yearbook 1994-2008

0

20

40

60

80

100

120

140

0

200

400

600

800

1000

1200

1400

1600

1800

2000

IndiumZinc Production


Aluminum

Antimony

Chromium

CopperGold

IndiumLe

adNick

el

Phosphoru

s

Platinum

silver Tin

Uranium Zin

c0

50

100

150

200

250

300

Current Rate of ConsumptionWorld at 1/2 the US Rate of Consumption

SILV

ER

Key Metal Consumption vs ReservesYe

ars

of S

uppl

y

Remaining Years of Supply

IND

IUM


Opportunity in BoliviaAn emerging resource based economy

• Bolivia experiencing its best economy in 30 years• Member of Mercosur Regional trade organization with Brazil as largest trading partner

• One of the world’s premier silver districts with billions of ounces of historical production• Planned $32 billion 5-7 year infrastructure build-out by Bolivian government for new rail and

road corridors and hydropower generation• Three Major silver mines built within last four years by Pan American Silver, Coeur D’Alene,

and Sumitomo• Substantial resource industry investments in Bolivia

Jindal Steel of India investing US$2.3 billion for 50% interest in El Mutun iron ore deposit Petrobras of Brazil—Latin America’s largest publicly traded oil company – investing

US$1 billion of new capital into the Bolivian gas fields Repsol of Spain investing $1.6 billion to increase gas production in Bolivia

TSX:SACUS OTC:SOHAF


Silver Mines in BoliviaOne of the world’s premier silver mining districts

• Historical district production of billions of ounces of silver

• Highly prospective & under-explored• Increase from 9th largest global silver

producer to 5th largest with completion of three major silver mines in past four years:

Pan American Silver – San Vincente Coeur D’Alene - San Bartolome Sumitomo - San Cristobal

TSX:SACUS OTC:SOHAF


Malku Khota Project, BoliviaOne of the world’s largest silver-indium resources

• 50 square km, 100% owned, road accessible project, long life open pit mine

• low capital and operating costs and high internal rate of return

• Ongoing drill campaign with recent higher grade discoveries

• Potential to be one of the top primary silver and indium producing mines

TSX:SACUS OTC:SOHAF

Indicated: 145 M oz of silver & 845 tonnes of indiumInferred: 178 M oz of silver & 968 tonnes of indium

Q4 2010 Q1 2011 2H 2011 2012Malku Khota

Completion of resource update drill

program

Updated resource estimate

Pre -feasibility Study underway

Feasibility

Updated PEA with increase throughput

Permitting Process


Established InfrastructureLow projected capital and operating costs• Open pit, bulk mineable

• Accessible by road• Commercial power within 15km• Access to water

TSX:SACUS OTC:SOHAF


Enrichment starts at surface Host rock sandstone with disseminated silver, indium, gallium, lead, zinc and copper

MineralizationOpen pit, bulk mineable deposit

Average grade first ten years:• Silver: 38.6 g/t (60 g/t Ag Eq) • Indium: 8.1 g/t• Economic cut-off grade <10 g/t (at $15/oz Ag)

TSX:SACUS OTC:SOHAF


MineralizationGeological formations looking south from Limosna

High Grade Sandstone

1160 g/t Silver

Wara Wara Sandstone

Malku KhotaSandstone Aroifilla Fm

TSX:SACUS OTC:SOHAF


Malku Khota DrillingGrade thickness map

• 75 drill holes in current resource with updated resource for Q1-2011

• 2010 program focused on in-fill & confirmatory drilling

• 2011 program to target conversion from resources to reserves & expansion drilling

• Mineralization begins at surface

• Deposit open along trend and down dip with excellent potential for expansion

• New discovery of higher grade zones and down dip expansion of surface mineralization

TSX:SACUS OTC:SOHAF


New Exploration ResultsDiscovery of broad continuous mineralization horizonLMD048: 286 meters grading 76 g/t Ag Eq Grade thickness values of over 21,500 g-m AgEq

TSX:SACUS OTC:SOHAF


Malku Khota DepositOnly 4km of 50 sqkm property drill tested

• 2010 program focused on in-fill and confirmation drilling for PEA Update

• Excellent potential to expand resources

TSX:SACUS OTC:SOHAF


Metallurgy Flow SheetAcid-Chloride Leach

Crushing

Heap Leach or Milling with Acid

Solution

Silver, Gold and Copper Recovery

Indium and Gallium Recovery

Lead Recovery

Zinc Recovery

Open Pit Mining

Further refining with solvent extraction (SX-EW ) process to metal dore or high purity concentration

• Similar process as used for SX-EW* copper-oxide heap leach and by zinc refineries for indium

• Similar recoveries for silver/gold as for cyanide leach

• Production of high purity silver bars and indium ingots on site

• Additional production of by-product metals including lead, zinc, copper and gallium

TSX:SACUS OTC:SOHAF

* solvent extraction and electo-winning


Summary of PEA 2009Updated PEA with expanded throughput for Q1 2011Pincock, Allan and HoltHeap Leach Operation – 20,000 Tonnes per Day Recovery: Silver 80%, Indium 70%Annual Production: 6.4 M oz Silver2

37,200 kgs Indium2

Cash Cost: $3.75 / oz AgMine Life: 36 Years

2009 2010 RecentBase Avg’s High

Silver Price/oz $13.30 $15.00 $20.00Indium Price/kg $530 $550 $1,000Net Annual Cash Flow2: $74M/yr $86M/yr $135M/yrNet Total Cash Flow: $1.2B $1.5B $2.7BPre-Tax NPV: >$300M >$500M >$1,000M

Years to Payback: 1.4 years 1.2 years <1 year

Base Case Silver Price: US$13.30/ozBase Case Indium Price: US$530/kg

70%

18%

12%

Revenue Distribution for 2009 Base Case

Silver

Indium

Lead/Copper/Zinc

(1) In US dollars, March 2009, PEA by Pincock Allan and Holt. Updated study utilizing higher production levels and new cost estimates anticipated Q1-2011

(2) First ten years of production


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2

4

6

8

10

12

Caracoles

Wonaw

inta

Constancia

Marcona

Dugald River

Bahuerachi

Casposo

Angostura

Salobo

Rosario

Esperanza

Rosemont

Rosia Montana

Wolverine

Martabe

Galeno

Hardshell

SanJose

Keno Hill

Cerro Negro

El Aguila

Santa Ana

El Saucito

Navidad

Malku Khota

Corani

Pascua Lama

Near Term Mine Development ProjectsSAC one of largest near-term producers at 20,000 tpd

• Annual estimated potential silver production of new development projects anticipated in the next 2-4 years

Source: CPM Silver Yearbook 2010

Oxiana

Intrepid Mines

Cobar ConsilidatedAntofagasta plc

Fortuna Silver

Minm

etals, Jiangxi Copper

Pan American

Bear Creek

Jinchuan Group

Chariot Resources

Augusta Resource

Silvermex Resources

Fresnillo Plc

Gold Resource

So American SilverAntofagasta plc

Greystar Resources

Vale

Barrick

China Minm

etals

Gabriel ResourcesYukon Zinc Corp.

Norsem

ont Mining

Alexco Resource Corp

Wildcat Silver Corp

Bear Creek

Andean Resources

25

Mill

ions

of O

unce

s


Global Silver Industry Cash Cost CurveAnticipated low-cost silver production

8-

4-

0

4

8

12

16

0%10%20%30%40%50%60%70%80%90%100%

Cumulative Percentile of Silver Mine Production Cost

Tota

l Cas

h Co

st P

er O

unce

of S

ilver

Industry AverageCash Cost$5.25/oz

Malku Khota6.4 Mozs/yr~ $3.75/oz

Source: GFMS World Silver Survey 2010


Escalones-Copper-Gold project, ChileHigh potential, large-scale target• 70 square km,100%

controlled, road accessible, large scale system

• Located in world-class copper mining district near El Teniente

• Historic drilling shows >1% copper grades at surface and untested porphyry system grading 0.6% copper

• Additional significant gold, silver and molybdenum credits

• Exploration drill program targeted for Q1 2011

• Resource estimate targeted for 2nd half of 2011

TSX:SACUS OTC:SOHAF


Escalones

Ownership: 100% through LeaseLocation: 35km E of El TenienteElevation: 3800m

• 6,889 hectares

• Escalones porphyry prospect located 97 km southeast of Santiago in central Chile

• 12,666m drilled in 30 DDH 10,159m in the skarn

500m in the porphyry

Exploration


Drill Results Grade Thickness MapLarge-scale porphyry system

• Open in all directions• Strong historic results

TSX:SACUS OTC:SOHAF


EscalonesGeological cross-section

• Enriched zones with high grades at surface at over >1% copper with significant gold and molybdenum

• Large scale porphyry target intercept of 176 m @ 0.6% copper with additional gold, silver and molybdenum

TSX:SACUS OTC:SOHAF


Community RelationsA key to successful project development• Assistance of BSR* to develop proactive community relations strategy• Two full-time indigenous community relations officers working in region• Objectives to facilitate economic development in communities

*Business for Social Responsibility, San Francisco, CA


Project MilestonesValue drivers over the next 6-12 months

• Malku Khota Silver and Indium Project, Bolivia Updated resource estimate targeted Q1 2011 Updated Preliminary Economic Assessment at higher throughput Q1-2011 Pre-feasibility targeted to begin in 2011 and feasibility in 2012

•Escalones Copper and Gold porphyry project, Chile Exploration and Geophysics program beginning early 2011 Target for initial resource estimate in 2nd half of 2011 Potential for significant deposit of copper, gold and silver

TSX:SACUS OTC:SOHAF


Alexco

Silve

r ETF

US Gold

Sullid

en

Tahoe R

esource

s

MAG Silve

r

Golden M

inerals

Sabina

ECU

Orko

Silve

rcrest

Bear C

reek

So.Ameri

can Si

lver

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25

30

35

40

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Leveraged to SilverValue of silver per dollar invested

SAC has some of the best leverage to silver of any development stage company with over $50 of silver value per $1 invested

Source: Canaccord as of January 17, 2011, Share prices updated February 8, 2011Note: all companies have projects in South and/or North AmericaCalculated using $25/oz Ag. Dollar value of silver per $1 invested = (silver resource/shares outstanding) x $25/oz silver) divided by share priceValue only shown for silver with no contribution from other metals

Silver value per $1 invested

Average value of silver <$8 of silver per $1 invested*


Why South American Silver?Investment highlights• World-class scale projects with excellent expansion potential• Track record of discovery and successful project development

• Growing shareholder value through resource expansion and advancing projects up the development value curve toward feasibility

• Leveraged to silver with over $40 of silver value per $1 invested• Attractive investment value relative to peers at low value per oz • Exposure to rapidly growing Indium high-technology market• Potential new value from copper resource definition and expansion• Continued investor outreach to broaden market awareness of Company• Potential near-term NYSE-AMEX listing in the U.S.

TSX:SACUS OTC:SOHAF


TSX: SACOTC: SOHAF

Phone: 604.681.69261.855.681.6926

www.soamsilver.com

Greg JohnsonPresident & CEO

TSX:SACUS OTC:SOHAF


Relative Stock PerformanceSAC outperforming key silver & gold indices•Trading liquidity increasing with average volume of 500,000 shares/day• SAC undervalued relative to peers at <$0.50/oz vs average of more than

$1.70/oz for early stage resources and >$3.00/oz for >200Moz resources

TSX:SACUS OTC:SOHAF


Management TeamA track record of success

Ralph Fitch, Executive Chairman Co-founder of South American Silver, High Desert Gold, and General Minerals Key role in discovery of Collahuasi copper porphyry , Malku Khota, Vizcachitas, and Escalones deposits

Greg Johnson, President and CEO Co-founder of NovaGold, key role in growing company from $50 million to $2 billion market capitalization Recognized for discovery and advancement of the 40 M oz Donlin Creek gold deposit for NovaGold and Barrick

William Filtness, Chief Financial Officer Chartered Accountant with twenty plus years of financial experience, including Manager, Corporate Development at Aurizon Mines

Felipe Malbran, Vice President of Exploration Extensive experience in exploration management in Bolivia, Chile, Peru and Argentina Key role in discovery of Malku Khota, Vizcachitas, and Escalones deposits

Phillip Brodie-Hall, Vice President of Project Development Global industry experience in engineering construction and project development experience covering nearly every aspect of evaluation,

feasibility studies and project development in the mining and mineral processing industriesDavid Dreisinger, Vice President of Metallurgy

Professor and Industrial Research Chair in Hydrometallurgy at the University of British Columbia (UBC) Actively involved in developing and commercializing hydrometallurgical process at a number of operating mines in Australia and Southeast

Asia.Richard Doran, Vice President and corporate secretary

Former VP Investor Relations for General Minerals and Marketing Manager for Chevron ResourcesAndrew Clark, Manager of Project Implementation

Global industry experience in the design and management of industrial, mining, materials handling, chemical and petrochical projects from feasibility studies through to commissioning and handover of completed facilities.

Xavier Gonzales Yutronic, General Manager Compañía Minera Malku Khota S.A. Mining Industry experience in finance, accounting, logistics, human resources and community relations at Comsur S.A., Sinchi Wayra

(Glencore) from 2005-2007, and Compañía Minera Malku Khota S.A. from October 2008 to date

TSX:SACUS OTC:SOHAF


Board of DirectorsStrong industry and financial experience

Ralph Fitch, Executive Chairman Greg Johnson, President and CEOAntonio Canton, Director - Mr. Canton is an independent consultant for international companies in marketing, finance and real estate. He is a director of a number of Swiss companies and brings to the board extensive experience in accounting and finance.Peter Harris, Director - Mr. Harris is an engineer with over 40 years of mining industry experience including as Senior VP and Chief Operating Officer at Nova Gold Resources Inc., and Senior VP of Project Development at Placer Dome Inc. He has been involved in the construction and operation of over 20 different mines in North and South America, Africa, Australia and Papua New Guinea. William Murray, Director - Mr. Murray is an engineer in the mining industry with over 33 years of experience in construction management and project evaluation in North America and Africa. He currently serves as the executive chairman and director of Polymet Mining Corp. Mr. Murray has been involved in numerous successful projects while working at Fluor Daniel, Denison Mines, Optimum Project Services and Anglo American Corp. in South Africa. Paul Haber, Director - Mr. Haber is a Chartered Accountant and a Certified Public Accountant with a strong background in US/Canadian accounting and finance. Presently manages Haber & Co. Ltd. Has previously been Chief Financial Officer and Corporate Secretary of a TSX Venture listed company. John Watson, Director - Mr. Watson has been the President of a TSX Venture Exchange listed company since 2002. He is also the manager/member of a limited liability corporation that owns and manages commercial real-estate.Tina Woodside, Director - Ms. Woodside is currently the head of the corporate finance department in Gowlings’ Toronto office and a member of the firm’s National Executive Committee. Ms. Woodside practices corporate and securities law with particular emphasis on corporate finance, mergers and acquisitions and corporate governance matters.

TSX:SACUS OTC:SOHAF

south american silver q1, 2011 corporate presentation

Documents

silver value

silverindium project

low value

ozconstructincreased

value creation

shareholder value

producing silver

coppergold project