sunshine silver mining &...
TRANSCRIPT
Sunshine Silver Mining & Refining
The Next North American Silver Major…
Precious Metals Summit
September 2017
Sunshine Silver Mining & Refining: Where the Owners and Managers Really Live Above the Shop
“The reception we receive for SSMRC should be excellent. As an institutional-qualityvehicle it has it all: high-quality assets in safe jurisdictions, with a management team andsupportive shareholder base that have proven track records of creating extraordinary valuefor investors, while executing successful strategies in socially and environmentally friendlyways.
The Sunshine Mine is a brand… as well as the iconic jewel of American silver mining. Fromthe highest grade large primary silver mine in the world’s safest jurisdiction to an end-product refinery that will produce silver bars certified for direct delivery to COMEX, theSunshine complex is slated to be the only completely autonomous and fully integratedsilver mining operation in the United States.
Los Gatos is one of the most exciting virgin discoveries of silver and zinc in a NAFTAjurisdiction and, in partnership with Japan's DOWA Mining and Metals, will be SSMRC'sfirst producing mine. The combination of Los Gatos and the magnificent Sunshine deposithas created a branded, blue-chip development profile that is second to none. With arealistic target of more than 15 million ounces of high-quality North American silverproduction per annum, SSMRC is the perfect vehicle for silver and zinc investors who wantto check all the boxes on people, assets and strategy.”
Thomas S. Kaplan, Chairman of The Electrum Group LLC, lead investor of SSMRC, as well as NOVAGOLD Resources Inc.
Building a World Class Silver Mining Company: Two High Grade, Development Assets in Premier Silver Regions
3
A Company-Maker
• New greenfield district-scale silver, gold, zinc and lead discovery
• Owning all required mineral rights and surface rights
• In the right location: Chihuahua State, MX. Mexico is the world’s largest silver producer
• Fourteen mineralized zones defined to-date
• JV with Dowa, owners of Japan’s largest zinc smelter, signed December 2014
• NI 43-101 compliant feasibility study completed in December 2016
• Expected to produce 9.6 million AgEq ounces annually
• Strong community support
Los GatosChihuahua, Mexico
Redevelopment of a World-Class Deposit
• One of the world’s highest-grade large primary silver deposits1
• Former prolific silver producer with an end-product silver refinery certified for direct COMEX delivery
• In the right location: The Silver Valley, Idaho; the largest silver producing region in the United States
• Near-term production and cash flow: Phased growth annual production target of 10 million Ag ounces annually
• Existing infrastructure: Water, power and access
• Have all environmental permits to begin mining operations
• Reduced operating risk given historical production and ongoing mine improvements
• 2011-2014 exploration discovered additional near-surface resources and significant potential for further discovery
Sunshine MineIdaho, USA
1 Defined as primary silver projects with at least 100 million oz. of MI&I resources, inclusive of P&P reserves.
Electrum and Affiliates, 72.0%
Liberty Metals & Mining, 12.0%
Municipal Employees'
Retirement System of Michigan, 5.9%
Tocqueville Asset Management, 3.1%
Management and Directors, 1.6%
Private Investors, 5.4%
Sunshine Silver Mining & Refining: Corporate Structure
4
An institutional shareholder base, led by The Electrum Group, a value-added leader in natural resources investing for more than two decades.
Shares Outstanding: 73.9 million
Warrants: 0.0 million
Options & DSUs: 5.6 million
Fully Diluted: 79.5 million
Debt: US$0 million
Cash (est. at September 30, 2017): US$24.5 million
Sunshine Silver Mining & Refining: Proven Management
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Stephen OrrExecutive Chairman & CEO
39 years experience
▪ President and CEO, Ventana Gold Corp (through to sale of company)▪ CEO, OceanaGold Limited; ▪ Managing Director Australia & Africa Operations, Barrick Gold Corporation; ▪ President, Homestake Canada Inc.▪ Joined Sunshine Silver in 2011
Roger JohnsonCFO
36 years experience
▪ Vice President and Chief Accounting Officer, Newmont Mining Corporation ▪ Senior accounting/finance positions at Kennecott Utah Copper Corporation, Pasminco Zinc,
and Coopers & Lybrand▪ Joined Sunshine Silver in 2011
Phil PyleVP Exploration & Mexico
36 years experience
▪ Exploration Manager, Linear Gold▪ MIM Exploration, BHP Minerals and AMAX Exploration▪ Joined Sunshine Silver in 2008
John KinyonVP Operations
35 years experience
▪ VP & General Manager - Kensington Operation, Coeur Mining▪ VP Operations - New Zealand Operations, OceanaGold▪ General Manager, Homestake/Barrick Gold’s Eskay Creek Operation▪ Joined Sunshine Silver in 2012
Luis Felipe HuertaProject Manager18 years experience
▪ Project Manager Continental Gold, Buritica Project▪ Project Manager, Fortuna Silver, San Jose Project▪ Project Superintendent, Compania Minera Atococha▪ Joined Sunshine Silver in 2015
Abyl SydykovMetallurgical Manager
21 years experience
▪ Plant/Operations Manager, Anglo Asian Mining Company (Gedabek Gold Mine, Azerbaijan)▪ Corporate Metallurgist, Endeavour Silver▪ Process Manager – Pitarrilla Project, Silver Standard▪ Chief Metallurgist – Alamo Dorado Project, Pan American Silver▪ Joined Sunshine Silver in 2015
Sunshine Silver Mining & Refining: Experienced Board of Directors
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Stephen OrrExecutive Chairman & CEO
▪ CEO of Sunshine Silver Mining & Refining Corporation
John Ellis▪ Retired Chairman and CEO of Anglogold North American Inc., Independence Mining Company,
Hudson Bay Mining and Smelting Corp.
Marc Faber▪ Publisher of The Gloom, Boom & Doom Report; author of Tomorrow’s Gold – Asia’s Age of
Discovery▪ Director of NOVAGOLD Resources Inc. and Sprott Inc.
Wayne Kirk ▪ Formerly of Thelen Marrin Johnson & Bridges and VP/General Counsel for Homestake▪ Director of Electrum Ltd.
William Natbony
▪ Former CEO and Executive Chairman of The Tigris Group Inc.▪ Former senior partner at Katten Muchin Rosenman LLP▪ Director of Gabriel Resources Ltd. and several privately-held companies
David Peat ▪ Former VP/Controller of Newmont ▪ Former VP/CFO of Homestake
Eric Vincent▪ CEO of The Electrum Group LLC▪ Former President of Ospraie Management
Sunshine Silver Mining & Refining: A Proven Track Record of Creating Value
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Through smart strategic acquisitions and exploration success, multiple milestones achieved over 10 years
Los
Gat
os
Pro
ject
Sun
shin
e M
ine
&
SSM
RC
Co
rpo
rate
➢ Initial acquisition of Los Gatos
➢ Discovery of the Cerro Los Gatos deposit
➢ Filed NI 43-101 resource estimate for Cerro Los Gatos and Esther
➢ Amapola discovery
➢ Completed NI 43-101 resource estimate for Amapola discovery
➢ Filed updated combined Los Gatos NI 43-101 resource estimates
➢ Initial Los Gatos JV discussions with Dowa
➢ Signed LOI for Los Gatos with Dowa
➢ Acquisition of Sunshine Mine
➢ Acquisition of additional surface rights to consolidate land position
➢ Merger of Los Gatos into Sunshine Silver Mines
➢ Liberty Mining & Metals acquires 15% of Sunshine Silver Mines Corp.
➢ Discovery of Sunshine Vein Extension
➢ Filed initial Sunshine Mine NI 43-101 resource estimate and PEA
➢ Acquired Big Creek Refinery
➢ Purchased adjacent mineral rights from Americas Silver
➢ Los Gatos metallurgical work and Conceptual Economic Assessment completed
➢ Signed Los Gatos Joint Venture agreement with Dowa Metals & Mining
➢ Updated Sunshine Mine NI 43-101 PEA
2007 2008 2009 2010 2011 2012 2013 2014
➢ Obtained drilling permits and surface access rights
➢ Commenced exploration drilling at Los Gatos
2015
➢ Reactivated exploration
➢ Initiated Feasibility Study & decline development to access the mineralization
2016
➢ Dowa earns 30% interest in the Los Gatos Project
➢ Completed NI 43-101 compliant feasibility study
Los Gatos Silver-Zinc-Lead Project: Discovery of a New High Grade Epithermal District in Mexico’s Silver Belt
Los Gatos Silver-Zinc-Lead Project:Located ~150km South of Chihuahua City, Mexico
9
Los Gatos Silver-Zinc-Lead Project:New Epithermal Precious Metals District
10
• ~103,000 hectares of mineral rights in 17 contiguous concessions
• No historical workings or previous exploration
• Exploration began in 2006, blind discovery of Cerro Los Gatos & Esther zones in March 2009
• ~5500 hectares of surface rights covering three known deposits (Cerro Los Gatos, Esther and Amapola) and additional exploration lands
• 11 other zones with ore grade intersections
• Only 15km of the 100km of vein strike extent identified thus far has been tested
Los Gatos Silver-Zinc-Lead Project:Dowa Metals & Mining Co.
11
• Founded in 1884, Dowa has been developing mineral resources in order to secure stable, long-term sources of raw materials for its Akita Zinc / Kosaka Smelting & Refining complex and its Onahama Smelting & Refining complex, both in Japan
• Dowa’s Akita Zinc is the largest zinc refinery in Japan, producing about 200,000 tons of eletrolyticzinc per year, as well as electrolytic cadmium, concentrated sulfuric acid, gold, silver, copper and a number of minor metals (i.e. indium, gallium, germanium)
• Dowa is currently involved in the operation of three mines, from which it imports zinc and copper concentrates to feed the Akita Zinc and Onahama Smelting & Refining Complex:
• a 30% interest in the Tizapa Zinc Mine in Mexico (operated by Penoles),
• a shared 50% interest in the Huckleberry Copper Mine in British Columbia (operated by Imperial Metals) ,
• a shared 25% interest in the Gibraltar Copper Mine in British Columbia (operated by Taseko Mines).
Los Gatos Silver-Zinc-Lead Project:Dowa Metals & Mining Joint Venture
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• In December 2014 Dowa Metals & Mining Co., Ltd. (Dowa) agreed to purchase 30% of the Los Gatos Project by paying US$50 million over two years
• Dowa will have life of mine rights to purchase the Los Gatos zinc concentrate at market rates. Lead concentrate will be sold to an independent smelter
• All earn-in proceeds funded the exploration, feasibility and early development work at Los Gatos. Feasibility was completed by year-end 2016 by TetraTech
• Sunshine Silver Mining & Refining Corporation is the project operator and manages all activities
Decline Construction Infrastructure Prep
• Ramp construction to access the mineralization
• Enables trial mining and bulk sample collection
• Provides exploration drilling platforms for further resource delineation
Technical Studies
Completion of
• Geotechnical
• Hydrogeological
• Metallurgical
• Environmental studies
• Final mine design
Drilling
• Infill drilling within the current resources to confirm continuity
• Extension drilling to expand the mineral resources
• Power line permitting
• Remaining strategic land purchases
• Final infrastructure design
$20.2 Million $6.8 Million $7.7 Million $15.3 Million
Los Gatos Silver-Zinc-Lead Project:Cerro Los Gatos Zone
13
Since Aug 2014, total Ag Eq M&I resources at the Los Gatos project increased by +170%
Source: Dec-16 datapoints per Tetra Tech Feasibility Technical Report; See appendix for resource details & metal prices used for Ag Eq calculations
35
4
51
25
13
23
0 20 40 60 80 100 120
Dec-16
Aug-14
Silver (Ozs Millions)
Measured Indicated Inferred
M&I Resource Increased +196%& Total Resource Increased +90%
407
66
767
402
325
674
0 200 400 600 800 1000 1200 1400 1600
Dec-16
Aug-14
Zinc (Lbs Millions)
Measured Indicated Inferred
M&I Resource Increased +151%& Total Resource Increased +31%
195
25
379
189
219
327
0 100 200 300 400 500 600 700 800 900
Dec-16
Aug-14
Lead (Lbs Millions)
Measured Indicated Inferred
M&I Resource Increased +168%& Total Resource Increased +47%
40
5
63
37
29
54
0 20 40 60 80 100 120 140
Dec-16
Aug-14
Gold (Ozs Thousands)
Measured Indicated Inferred
M&I Resource Increased +147%& Total Resource Increased +38%
Los Gatos Silver-Zinc-Lead Project:Cerro Los Gatos Zone
14
500 metres
Looking Southwest
Ag Au Cu Pb Zn Ag Eq Ag Au Cu Pb Zn Ag Eq
(Mt) (g/t) (g/t) (%) (%) (%) (Moz) (koz) (Mlbs) (Mlbs) (Mlbs) (Moz)
2P Reserves 9.81 247 0.30 0.10% 2.28% 4.75% 604 78.0 94.6 21.6 493.0 1,027.1 190.6
Measured 3.40 318 0.37 0.10% 2.60% 5.43% 726 34.8 40.4 7.5 194.9 407.0 79.4
Indicated 5.80 274 0.34 0.12% 2.96% 6.00% 725 51.1 63.4 15.3 379.0 767.2 135.2
Total Meas. & Ind. 9.20 290 0.35 0.11% 2.83% 5.79% 725 85.9 103.8 22.8 573.9 1,174.2 214.6
Inferred 3.20 128 0.28 0.14% 3.10% 4.60% 514 13.2 28.8 9.9 218.7 324.5 52.9
Total Resources 12.40 248 0.33 0.12% 2.90% 5.48% 671 99.0 132.7 32.7 792.6 1,498.7 267.4
Ore
Tonnes
Grade Contained Metal
Source: Tetra Tech Feasibility Technical Report; See appendix for Ag Eq calculation details
Los Gatos Silver-Zinc-Lead Project:Over 1.6 Kilometers of Development Completed
15
Decline Progress Toward the NW Zone
Decline Portal
Location of Trial Mining in the Central
Zone
Decline Progress Toward the NW Zone
Decline Portal
Location of Trial Mining in the Central
Zone
Decline Progress in the Central Zone
Los Gatos Silver-Zinc-Lead Project:Decline from Surface Intersected Vein on Sept. 14, 2016
16
NW Zone Central Zone
SE Zone
Location of Decline-Vein Intersection
~2.5km
Looking Southwest
Looking Northeast
Los Gatos Silver-Zinc-Lead Project:Trial Mining & Bulk Sample
17
Explosive Round
Ag g/t Pb % Zn %
Round 1 1082.9 10.97 11.82
Round 2 739.3 11.4 11.22
Round 4 571.3 5.95 6.86
Round 5 309.3 3.41 5.55
Round 6 472.7 4.64 4.73
Wtd. Avg. 635.1 7.27 8.04
50 t bulk sample sent to Pilot Processing Plant at SGS Lakefield Research Facility
1
2
4
5
6Results Meaningfully Higher!
Resource model predicted that the trial mining area would average 307
g/t silver, 1.8% lead and 3.3% zinc
Los Gatos Silver-Zinc-Lead Project:Feasibility Study Mine Plan
18
1 Production figures shown represent payable production
2 Feasibility Study based on Ag Price = $20.16/oz., Zn Price = $1.01/lb., Pb Price = $0.92/lb., Au Price = $1318/oz.
2,500 tonnes per day
Mining Rate
11.5 YearsInitial 2P Mine Life
$316 mmExpected Pre-Production Capex
$12.13/Ag oz.All-in co-product
sustaining cost
$5.21/Ag oz.All-in by-product
sustaining cost
$63 mmAverage free cash flow per year2
4.0 YearPayback period
Average Annual Production (100%)1
9.6 mm AgEq Oz.
5.2 mm oz. Ag, 50 mm lb Zn, 37 mm lb. Pb
2016 Feasibility Study Mine Plan Drift and Fill Ore Tonnes 6,735,233
Total diluted and Recovered Ore tonnes 9,808,433 Transverse Ore Tonnes 1,574,123
Diluted NSR $ Value/t 186.48 Longitudinal Ore Tonnes 1,499,076
Diluted AgEq g/t 501.18
Diluted Ag g/t 247.39 Total Waste Tonnes 2,586,170
Total Cash Costs/t 115.22
Diluted Zn% 4.75Production
by Zone
Diluted Pb% 2.28 NW Total Diluted and Recovered Tonnes 3,073,200
Diluted Cu% 0.1 Central Total Diluted and Recovered Tonnes 5,510,086
Diluted Au g/t 0.3 SE Total Diluted and Recovered Tonnes 1,225,147
Los Gatos Silver-Zinc-Lead Project:Feasibility Study Metallurgy
19
• Primary Crusher → 2-Stage Grinding → Conventional Flotation to produce a Lead (high silver) and a Zinc concentrate
• The samples have A×b values of 45-77 and SCSE values of 7.66-9.56 kWh/t, categorizing the samples as softer per JKTech database of SMC tests, which reduces grinding costs
• The samples have BWI intermediate hardness values of 15.3-18.9 kWh/t
• 50 tonne bulk sample from test mining stope shipped to SGS Lakefield for pilot plant testing
• 40-50% of the tailings returned underground as paste backfill, remaining tailings to tailings storage facility (zero discharge)
Los Gatos Silver-Zinc-Lead Project:NI 43-101 Feasibility Study Results
20
Proven & Probable Reserve (including dilution):
Tonnes
Silver Grade
Zinc Grade
Lead Grade
Gold Grade
9.8 million
247 g/t
4.8%
2.3%
0.3 g/t
Initial Mine Life (based on current Proven & Probable reserves) 11.5 years
Production Rate (annual):
Average Tonnage Milled
Recovered Silver
Recovered Zinc
Recovered Lead
Recovered Gold
0.85 million tonnes
5.8 million ozs
64.8 million lbs
39.8 million lbs
5.8 thousand ozs
Preproduction Capital Cost $316 million
Annual Free Cash Flow1 $63 million
Project Payback Period 4.0 years
AIl-In Sustaining Cost (AISC):
Co-Product Basis
By-Product Basis
$12.13/Ag oz
$5.21/Ag oz
Project NAV1:
@ 7.5% discount rate
@ 5.0% discount rate
@ 0% discount rate
$142 million
$209 million
$399 million
Cerro Los Gatos Feasibility Study Summary (100% Basis)
1 Feasibility Study based on Ag Price = $20.16/oz., Zn Price = $1.01/lb., Pb Price = $0.92/lb., Au Price = $1318/oz.
Los Gatos Silver-Zinc-Lead Project:NI 43-101 Feasibility Study NPV Sensitivity
21
Every $5.00 increase in the silver price adds ≈$125 million to the NPV
Every $0.20 increase in the zinc price adds ≈$42 million to the NPV
Note: Analysis based on a 100%project-level basis, a 5% discount rate & 18.5 MXN/USD exchange rate; Metal price assumptions are Ag = $20.16/oz, Au = $1,318/oz, Zn = $1.01/lb & Pb = $0.92/lb
$0
$100
$200
$300
$400
$500
$600
$700
$15.00 $17.50 $20.00 $22.50 $25.00 $27.50 $30.00 $32.50 $35.00
Aft
er-
Tax
NP
V(5
%)
($M
)
Silver Price ($/oz)
Project Sensitivity to Silver Price
$100
$150
$200
$250
$300
$350
$0.90 $0.95 $1.00 $1.05 $1.10 $1.15 $1.20 $1.25 $1.30 $1.35 $1.40 $1.45 $1.50
Aft
er-
Tax
NP
V(5
%)
($M
)
Zinc Price ($/lb)
Project Sensitivity to Zinc Price
Los Gatos Silver-Zinc-Lead Project:Financing for Construction Completed!
22
Debt Facility
Equity Financing
Total
SSMRC (70%) $147M $74M $221M
Dowa Metals & Mining (30%) $63M $32M $95M
Los Gatos Preproduction CAPEX $210M $106M $316M
Los Gatos Project Financing (Millions):
Los Gatos Silver-Zinc-Lead Project:$210M Project Finance Facility Approved
23
Issue • $210 million term loan
Use of Proceeds • To fund ≈ 67% of Los Gatos Mine $316M initial construction cost
Security• All project assets including share pledge from the JV sponsors
(Sunshine & Dowa)
Tenor • 10.5 years
Interest Rate/Fees• LIBOR + margin of 4.35% (includes annual arrangement fee)• 2% One-time upfront fee
Repayment Schedule• 14 consecutive semi-annual instalments / Beginning June 2021 / Final
Dec 2027
Cash Sweep Mechanism • 70% of excess cash flow
Financial Covenants • Accelerated repayment for change of control
Lead Arranger • Dowa Metals & Mining Co. Ltd.
Los Gatos Silver-Zinc-Lead Project:Equity Financing
24
• SSMRC has completed a $36.5 million private placement with $28 million to be an initial equitycontribution to the Los Gatos Project.
• SSMRC has $46 million of equity obligation remaining ($74M - $28M = $46M).
• If SSMRC is unable to provide its remaining $46 million equity contribution, Dowa will continuefunding the Los Gatos Project on SSMRC’s behalf.
• Dowa will treat any funding on SSMRC’s behalf as a project loan with an interest rate ofLIBOR + 1.5%.
• The loan repayment is due on June 30, 2019 when the project is expected to startcommissioning.
• If SSMRC does not repay the loan by the maturity date, Dowa will earn additional equityinterest in the Los Gatos Project.
• SSMRC will have a buy-back option to reacquire the Los Gatos Project equity acquired atthe value credited to Dowa.
• This option can be exercised at any time and expires two years following the Los GatosProject commissioning.
Los Gatos Project Equity Contribution $106 million
SSMRC 70% $74 million
Dowa 30% $32 million
Los Gatos Silver-Zinc-Lead Project:The Timeline to Production
25
➢ Completion of the NI 43-101 compliant Feasibility Study
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
➢ Completion of the Cerro Los Gatos Equity Financing Requirement
➢ Approval of Final Construction Permits for Cerro Los Gatos
➢ Approval of the Cerro Los Gatos Debt Finance Facility
➢ Initiate Cerro Los Gatos Project Construction
Q2 2019
➢ Cerro Los Gatos Project Commissioning Begins
Construction of Cerro Los Gatos Process Plant and other surface Facilities to Annually Produce 5.8M Ag ozs, 64.8M Zn lbs, 39.8M Pb lbs1 at AISC of $5.21/Ag oz
The SSMRC & Dowa Los Gatos Joint Venture will continually Add Value through Resource Expansion & Mine Construction
Ongoing Definition Drilling to increase the Cerro Los Gatos Reserves & Resources
1 Figures shown are metal recovered; Payable metal figures are 5.2 Moz Ag, 50.5 Mlbs Zn & 36.6 Mlbs Pb
➢ MIA submitted to SEMARNAT for approval of surface construction permits
Underground Development started in June 2015 and continues through Cerro Los Gatos Project Commissioning
Q4 2016 Q2 2018 Q3 2018 Q4 2018 Q1 2019
➢ Final Engineering Completed
➢ Long-lead Equipment Ordered
➢ Powerline Construction Started
➢ Earthworks Started
➢ Processing Plant & Other Surface Facilities Construction Started
Q3 2019 Q4 2019
Production Ramp-up Phase
➢ Achieve Design Production of 2500 tpd
Ag Au Cu Pb Zn Ag Eq Ag Au Cu Pb Zn Ag Eq
(Mt) (g/t) (g/t) (%) (%) (%) (g/t) (Moz) (koz) (Mlbs) (Mlbs) (Mlbs) (Moz)
Indicated 0.46 133 0.04 0.02% 0.70% 2.10% 269 2.0 0.6 0.2 7.1 21.3 4.0
Inferred 2.29 98 0.12 0.05% 1.60% 3.00% 324 7.2 8.8 2.5 80.8 151.5 23.8
Total Resources 2.75 104 0.11 0.04% 1.45% 2.85% 315 9.2 9.4 2.7 87.9 172.8 27.8
Grade Contained MetalOre
Tonnes
Los Gatos Silver-Zinc-Lead Project:Additional District Exploration Targets
26
Other Preliminary Resource Estimates:
• Esther: 1.75MT at 129.7 gAg/t, 1.8% Pb, 3.7% Zn
• Amapola: 1.46MT at 174.1 gAg/t, 0.2%Pb, 0.5%Zn
Other Ore Grade Intercepts:
• Cieneguita: 1.3m at 62.4g Ag/t, 5.4% Pb, 0.9% Zn
• San Luis: 2.0m at 271.0g Ag/t, 0.3% Pb, 0.1% Zn
• Paula Adorada: 4.0m at 180.0 g Ag/t, 0.1% Pb, 0.1% Zn
• San Agustin: 1.3m at 148.0 gAg/t, 1.2% Pb, 2.3% Zn
• Mezcalera: 2.0m At 59.4g Ag/t, 0.1% Pb, 0.1% Zn
• Los Torunos: 1.8m at 34.2 gAg/t, 2.6% Pb, 0.9% Zn
• El Rodeo Hole: 0.8m at 61.5 gAg/t, 3.4% Pb, 4.0% Zn
• Boca de Leon: 2.2m at 90.6 gAg/t, 5.0% Pb, 0.8% Zn
• El Lince: 4.0m at 62.2 gAg/t, 0.0% Pb, 0.1% Zn
1Esther and Amapola resource estimate per TetraTech Aug12 Technical Report (also disclosed in Los Gatos FS technical report); See appendix for Ag Eq calculation details
Esther & Amapola Deposits1
Ag Au Cu Pb Zn Ag Eq Ag Au Cu Pb Zn Ag Eq
(Mt) (g/t) (g/t) (%) (%) (%) (Moz) (koz) (Mlbs) (Mlbs) (Mlbs) (Moz)
Indicated 0.62 113 0.04 0.02% 0.60% 1.70% 225 2.3 0.8 0.3 8.2 23.2 4.5
Inferred 2.94 87 0.10 0.04% 1.30% 2.50% 274 8.2 9.5 2.6 84.3 162.0 25.9
Total Resources 3.56 92 0.09 0.04% 1.18% 2.36% 265 10.5 10.2 2.9 92.5 185.3 30.4
Grade Contained MetalOre
Tonnes
Esther
Amapola
The Sunshine Mine: An American Silver Legend
Sunshine Silver Mine: We’re in the Sweetest Spot of the District
28
Sunshine
827 g/t AgM&I 75 million oz. Ag
Inferred 221 million oz. Ag
Source: Public filings and Google Earth. Silver grade of total reserves & resources (including inferred) at peer projects. M&I shown is inclusive of reserves. Relative circle size is indicative of MI&I silver grade at the Sunshine Mine and other Silver Valley projects.
1 Historical production grade at the Bunker Hill mine. Not NI 43-101 compliant.
Galena
300 g/t Ag
M&I 42M oz. Ag
Inf. 16M oz. Ag
Lucky Friday
273 g/t Ag
M&I 211M oz. Ag
Inf. 34M oz. Ag
Bunker Hill
226 g/t Ag1
M&I N/A
Inf. N/A
The highest-grade tetrahedrite-dominant mine
in the Silver Valley
Note: Grade shown represents grade of total reserves and resources. Relative circle size is indicative of current weighted average M&I silver grade
248
827
671
855
0
100
200
300
400
500
600
700
800
900
1000
Gra
de
(g/t
)
Average = 206 g/t Ag Average = 340 g/t Ag EqAg Grade (g/t)
AgEq Grade (g/t)
In-Situ Mineral Resource Grades: Global Silver Project Comparisons
29Note: Grades include all Measured, Indicated and Inferred resources; Ag Eq calculations based on Ag = $17.02/oz, Au = $1,205/oz, Pb = $1.02/lb, Zn = $1.21/lb & Cu = $2.57/lb (10Mar17 spot prices)Averages shown exclude SSMRC datapoints; All information is sourced from public disclosure as at 10Mar17
SSO FR SVM
MND
MAG
THO
FVI
SSMRC
FRES-LN PAAS EDR CDE
• Numerous unexplored target areas identified for systematic exploration
• New veins & extensions of known veins discovered in the upper areas of the deposit
• Deposit also open at depth
• Additional high potential zones near previously mined areas
Sunshine Silver Mine: Focus on Shallow Targets
30
Using modern technology to systematically explore a world-class project in a historic and prolific district, to unlock value and create a unique high grade silver mine
Sunshine Silver Mine:Exploration Results
31
Sterling Tunnel Station D Vertical Section
Vertical Section Looking West Summarizing South Yankee Boy Vein Intercepts
Sterling Tunnel
7490
Sterling Tunnel
ST
-2648
1200
1150
1100
1050
ST
-2650
1000
850
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ST
-2651
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1.3
60
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.50
650
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ST
-2652
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ST
-2649
14
3.0
027
.700
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.00
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.00
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-2647
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.20
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ST-2
645
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ST-2
646
9.5
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400
19.6
0
0.4
00
550
400
350
22.3
0
350
550
400
350
500
500
350
350
350
300
450
300
450
300
1.0
9300
400
1.4
2
300
21
2.3
0
15
.100
400
300
250
7.0
5
250
350
250
350
250
250
250
300
200
300
200
200
200
200
250
200
250
ST
-2660
700
150
150
650
150
200
150
600
0.4
77
200
150
150
550
500
150
150
100
100
450
0.5
18
100
100
100
400
100
350
ST
-2656
52.4
0
100
4.7
650
0
100
450
300
4.8
50.4
04
0.6
24
6.5
2
400
0.4
67
0.4
26
350
250
50
50
ST-2
654
5.8
0
63.9
0
500
50
300
450
50
400
50
350
400
50
200
300
450
350
450
500
3.6
91.
10
12.7
0
ST
-265
5
450
250
400
400
500
500
2.2
341
.10
5.8
3250
350
350
45
.20
50
3.1
3
300
450
550
400
50
300
550
300
500
24
7.9
0
19
5.7
0
350
9.7
0
5.0
4
1.7
812
0.0
0
1.6
1
18.20
600
8.60
2.59
ST
-2657
550
2.81
200
650
500
200
600
250
300
450
700
250
150
250
400
0.971
2.87
600
1.1
50
51
.10
12.20
12
.50
750
1.0
7
16.4
0
250
350
14
.20
0.9
63
11
.30
800
650
200
200
150
300
200
150
850
650
200
250
900
150
10.1
0
150
3.8
2
700
1.6
70
356.
404.0
5
100
150
150
200
950
700
100
100 ST
-2659
100
100
150
1000
750
100
100
50
100
1050
50
50
50
50
50
50
50
800
1100
0 00 0
0
0
0 0
0
0
0
0
0
0
0
00
0
0
0
0
1150
850
1200
1250
900
50
50
50
1300
ST
-2658
5050
1350
100
ST-2
653
100
100
100
100
150
150
st_tunnel_busted
150
200
150
150
0.459
3.27
200
5.10
0.404
Sterling Tunnel
0.4
69
1.2
1
83.2
0
1.2
500.
47820
01.
41
250
200
250
200
250
6.5
7
300
2.3
6
1.3
40
250
300
250
300
350
350
300
400
350
300
400
350
450
400
350
450
500
400
450
0.4
85400
500
0.4
050.
475
550
1.3
9
13.9
0
450
500
2.4
4
0.4
75
8.5
084
.60
0.5
17
0.4
85
12.9
0450
550
600
550
500
3.7
314
.90
1.0
62.
77
600
500
650
43
.90
3.1
716
.30
7.2
1
600
550
ST-2
662
ST
-2663
ST-2
661
550
600
600
ST
-2664
ST
-2665
6725
6890
Sterling Tunnel
0 X
20
0 X
40
0 X
60
0 X
80
0 X
10
00
X
12
00
X
14
00
X
1400 Y
1600 Y
1800 Y
2000 Y
2200 Y
2400 Y
2600 Y
2800 Y
3000 Y
3200 Y
3400 Y
Sunshine Vein
DRILL STATION D
Sterling Tunnel Elevation
South Yankee Boy Split Vein
Sunshine 500 Level
Sunshine 900 Level
DRILL STATION C
6725 Bulk
Sample Stope
DDHIDInterceptLength
(m)
Ag
(grams/tonne)Cu(%) Pb(%)
ST-2651 0.09 555 0.24 0.05
ST-2653 0.67 1234 0.98 0.20
ST-2655 0.73 562 2.20 0.05
ST-2658 1.22 709 0.78 0.41
ST-2659 0.58 708 0.40 0.05
ST-2662 0.67 1575 1.02 0.90
Average 0.66 891 0.94 0.28
SouthYankeeBoySplitVeinSouth Yankee Boy Split Vein
A focus on shallow targets:
South Yankee Boy Split
Vein Discovery
Sunshine Silver Mine:Exploration Results
32
Sterling Tunnel Station D Vertical Section
Vertical Section Looking West Summarizing Sunshine Vein Intercepts
Sterling Tunnel
7490
Sterling Tunnel
ST
-2648
1200
1150
1100
1050
ST
-2650
1000
850
950
900
800
850
750
800
700
750
ST
-2651
650
700
600
1.3
60
17
.50
650
600
550
600
ST
-2652
500
550
500
ST
-2649
14
3.0
027
.700
14
.00
2.5
0
14
.00
63
5.0
0
2.8
2
11
7.0
0
550
500
550
450
ST
-2647
450
500
500
450
500
400
2.5
40
16
.20
450
400
450
ST-2
645
450
400
600
ST-2
646
9.5
6
400
19.6
0
0.4
00
550
400
350
22.3
0
350
550
400
350
500
500
350
350
350
300
450
300
450
300
1.0
9300
400
1.4
2
300
21
2.3
0
15
.100
400
300
250
7.0
5
250
350
250
350
250
250
250
300
200
300
200
200
200
200
250
200
250
ST
-2660
700
150
150
650
150
200
150
600
0.4
77
200
150
150
550
500
150
150
100
100
450
0.5
18
100
100
100
400
100
350
ST
-2656
52.4
0
100
4.7
650
0
100
450
300
4.8
50.4
04
0.6
24
6.5
2
400
0.4
67
0.4
26
350
250
50
50
ST-2
654
5.8
0
63.9
0
500
50
300
450
50
400
50
350
400
50
200
300
450
350
450
500
3.6
91.
10
12.7
0
ST
-265
5
450
250
400
400
500
500
2.2
341
.10
5.8
3250
350
350
45
.20
50
3.1
3
300
450
550
400
50
300
550
300
500
24
7.9
0
19
5.7
0
350
9.7
0
5.0
4
1.7
812
0.0
0
1.6
1
18.20
600
8.60
2.59
ST
-2657
550
2.81
200
650
500
200
600
250
300
450
700
250
150
250
400
0.971
2.87
600
1.1
50
51
.10
12.20
12
.50
750
1.0
7
16.4
0
250
350
14
.20
0.9
63
11
.30
800
650
200
200
150
300
200
150
850
650
200
250
900
150
10.1
0
150
3.8
2
700
1.6
70
356.
404.0
5
100
150
150
200
950
700
100
100 ST
-2659
100
100
150
1000
750
100
100
50
100
1050
50
50
50
50
50
50
50
800
1100
0 00 0
0
0
0 0
0
0
0
0
0
0
0
00
0
0
0
0
1150
850
1200
1250
900
50
50
50
1300
ST
-2658
5050
1350
100
ST-2
653
100
100
100
100
150
150
st_tunnel_busted
150
200
150
150
0.459
3.27
200
5.10
0.404
Sterling Tunnel
0.4
69
1.2
1
83.2
0
1.2
500.
47820
01.
41
250
200
250
200
250
6.5
7
300
2.3
6
1.3
40
250
300
250
300
350
350
300
400
350
300
400
350
450
400
350
450
500
400
450
0.4
85400
500
0.4
050.
475
550
1.3
9
13.9
0
450
500
2.4
4
0.4
75
8.5
084
.60
0.5
17
0.4
85
12.9
0450
550
600
550
500
3.7
314
.90
1.0
62.
77
600
500
650
43
.90
3.1
716
.30
7.2
1
600
550
ST-2
662
ST
-2663
ST-2
661
550
600
600
ST
-2664
ST
-2665
6725
6890
Sterling Tunnel
0 X
20
0 X
40
0 X
60
0 X
80
0 X
10
00
X
12
00
X
14
00
X
1400 Y
1600 Y
1800 Y
2000 Y
2200 Y
2400 Y
2600 Y
2800 Y
3000 Y
3200 Y
3400 Y
Sunshine Vein
DRILL STATION D
Sterling Tunnel Elevation
South Yankee Boy Split Vein
Sunshine 500 Level
Sunshine 900 Level
DRILL STATION C
6725 Bulk
Sample Stope
DDHIDInterceptLength
(m)
Ag
(grams/tonne)Cu(%) Pb(%)
ST-2625 1.16 1246 0.41 0.13
ST-2627 0.52 520 0.24 0.05
ST-2628 0.55 2142 1.54 0.05
ST-2629 0.79 5799 1.83 0.07
ST-2630 0.09 3703 1.81 0.05
ST-2631 0.15 2191 1.00 0.16
ST-2632 0.64 415 0.15 0.05
ST-2636 0.40 321 0.06 3.34
ST-2637 0.61 2126 1.49 0.12
ST-2638 0.15 1114 0.63 0.05
ST-2640 0.18 1025 0.33 0.00
ST-2641 1.43 3615 0.82 0.05
ST-2644 0.37 1087 0.51 0.05
ST-2645 0.46 765 0.36 0.05
ST-2646 0.18 672 0.25 0.00
ST-2648 1.22 480 0.15 0.16
ST-2653 0.27 624 0.44 0.05
ST-2654 0.49 946 0.28 0.05
ST-2655 0.52 435 0.13 0.00
ST-2656 0.09 1797 0.69 0.00
ST-2658 0.85 829 0.21 0.08
ST-2659 0.88 3044 0.70 0.09
ST-2661 0.37 477 0.16 0.17
ST-2662 0.40 2901 1.11 0.20
ST-2664 0.46 511 0.21 0.05
ST-2665 1.10 634 0.24 0.05
Average 0.55 1516 0.61 0.20
SunshineVeinSunshine Vein
A focus on shallow targets:
Sunshine Vein Extension
Discovery
33
Sterling Tunnel Station C Vertical Section
Vertical Section Looking West Summarizing 10 Vein Intercepts
7490_asbuildst_tunnel_level
st_tunnel_level
6725_asbuild
1300
ST-264
012
50
1200
1150
1100
1050
1000
950
ST-2
641
1050
900
1000
ST-2
642
850
950
850
900
800
800
850
750
29.9
0
23.1
0
0.7
30
800
750
700
ST-2
643
1200
750
119.
80
1150
23.3
065
0
700
1100
700
1050
600
650
650
1000
950
550
600
600
900
ST
-263
6
1000
850
550
500
950
ST-2644
1150
900
550
800
1100
850
6980_asbuild
20.30
800
1050
500
35.000
27.00
5.21
7.600
24.50
50.000
1.0
2
750
450
1000
750
ST-2
634
1400
1350
1300
50012
50
950
1200
700
3.3
40
9.3
7
1150
700
1100
900
450
1050
650
1000
183.90
1.25
1.56
2.22
24.50
9.92
850
8.19
400
950
650
ST-2
633
700
ST-263
9
450
600
900
800
750
850
650
600
400
700
550
750
800
600
750
350
650
400
3.3
816
.80
1.5
4
550
700
500
700
550
600
350
650
650
500
450
500
550
600
350
1250
1300
1200
1350
1150
300
3.09
1100
21.200
17.10
3.100
1.71
14.30
10.500
1400
600
ST-2638
1050
1000
450
950
550
500
450
400
900
550
300
st_tunnel_level
25.60
32.509.71
850
500
450
400
300
800
400
500
250
750
350
450
400
21.70
700
450
250
350
350
650
400
250
300
600
350
400
200
300
300
350
550
3.9
70
4.9
520
0
350
500
500
450
300
550
250
400
0.4
70
200
600
250
300
0.7
00
250
450
650
350
300
9.8
3
28.2
00
700
250
400
1.4
70
17.6
0
150
250
21.5
0
300
750
200
150
200
350
200
250
150
800
200
250
300
5.8
6
1.9
40
200
0.4
50
850
2.4
7
0.4
70
200
150
250
150
150
800
850
750
100
39.2
0
2.8
2090
0
700
6.7
7
196.
001.
78
3.5
3
19.4
0
1387
.00
2.6
09.
70
900
200
900
850
950
950
650
62.00
35.30
2.88
32.00
800
1000
1.43
14.400
9.83
750
7.16
6.850
2.19 10
50
150
600
700
1000
1100
650
ST-2
629
100
1150
550
600
1200
150
100
37.3
0
4.1
40
550
0.8
90
1.9
813
.80
14.2
00
500
200
1250
13.9
0
13.6
00
500
ST-263
7
950
150
650
450
600
450
700
1.5
515
.70
49.4
01.
89
108.
00
550
750
400
800
500
150
400
100
850
450
350
100
150
900
350
400
8.0
70
7.5
0
1000
100
3.7
5
1.7
10
300
100
950
350
100
300
250
100
300
1000
ST-
2630
250
100
200
50
1050
250
100
50
50
9.01
5.130
150
200
200
400
350
50
450
300
50
350
50
300
400
500
250
250
150100
50
450
150
50
550
500
600
1100
550
200
450
650
50
5.710
45.20
200
400
700
750
350
50
500
50
800
300
150
600
100
150
23.90
850
250
256.0
07.1
7
300
350
100
250
400
200
450
900
550
200
50
500
100
150
950
650
0.440
100
150
550
100
100
1000
50
600
50
600
15.6
0
1150
9.6
2
118.
30
50
10.3
0
2.5
30
5050
650
1050
50
700
0
0
000
00000
0
00
00
0
0
000
150
700
100
11.6
90
61.6
0
0.4
20
25.0
0
29.5
00
15.6
0
6.3
90
23.7
00
71.2
0
50
200
1100
50
250
3.58
1.90
40.50
650
1.35
750
3.3
2
300
1150
750
2.3
9
0.6
70
100
4.950
2.24
800
350
1200
400
150
4.35
1.570
1200
850
700
800
450
900
200
ST-2628
500
950
11.1
00
6.0
8
0.5
00
1.4
3
1.0
90750
2.6
7
1.8
00
2.8
8
1.4
60
44.0
0
550
850
250
1250
ST-2
635
1000
600
1050
300
800
650
40.1
0
61.9
00
50.1
0
59.8
00
900
1100
700
350
1150
750
63.90
850
950
0.6
00
32
.60
400
800
1200
0.8
40
1.0
8
850
450
ST-2
627
900
1000
900
500
950
950
1050
30.80
59.200
41.90
78.200
79.100
74.60
19.700
8.32
8.35
0.620
3.87
550
1000
ST-263
1
1000
600
1100
650
ST
-262
4
1150
700
750 1200
1.62
12.10
9.43
800
850
1250
900
1300
950
ST-2
625
1000
45.600
46.90
4.36
3.920
1.150
313.00
7.63
1050
ST-2632
40
0 X
60
0 X
80
0 X
10
00
X
12
00
X
14
00
X
16
00
X
18
00
X
1200 Y
1400 Y
1600 Y
1800 Y
2000 Y
2200 Y
2400 Y
2600 Y
2800 Y
3000 Y
Sunshine Vein
10 Vein
DRILL STATION C Sterling Tunnel Elevation
South Yankee Boy Split Vein
Sunshine 900 Level
Sunshine 500 Level
6725 Bulk
Sample Stope
DDHIDInterceptLength
(m)
Ag
(grams/tonne)Cu(%) Pb(%)
ST-2624 0.09 1118 1.47 0.60
ST-2625 0.21 1375 0.11 61.90
ST-2625 0.06 1718 0.63 59.80
ST-2627 0.61 804 1.03 0.84
ST-2628 1.30 1063 0.47 12.80
ST-2631 1.13 1234 0.10 55.87
ST-2632 1.55 1824 0.71 15.89
ST-2635 0.24 477 0.13 13.60
ST-2635 0.46 473 0.07 14.20
ST-2637 1.22 143 0.02 4.71
ST-2638 0.67 336 0.09 9.90
ST-2644 0.37 483 0.08 20.27
Average 0.66 921 0.41 22.53
10Vein
10 Vein
A focus on shallow targets:
10 Vein Discovery
Sunshine Silver Mine:Exploration Results
New Discovery South Yankee Boy Split Vein: Trial Mining
3434
• 1.1 Meter Wide Vein• Grading 2,152 g/t Ag, 1.02% Cu, 2.43% Pb
• 2.2 Meter Wtd. Avg. Mining Width• Grading 1,049 g/t Ag, 0.50% Cu, 1.18% Pb
• 0.3 Meter Wide Vein • Grading 3,869 g/t Ag, 2.05% Cu, 0% Pb
• 1.68 Meter Wtd. Avg. Mining Width• Grading 1,322 g/t Ag, 0.65% Cu, 0.12% Pb
Sunshine Silver Mine: 2014 NI 43-101 Compliant Resource Estimate & PEA
35
Full production mining rate 1,200 tpd
Silver grade 24.8 oz/ton (≈850 g/t)
Silver recovery 92% in Upper; 96% in Lower
Silver production (peak) 10 to 12 million ounces (9.4M average LOM)
Cash costs $9.16/oz
All-In sustaining costs $11.86/oz
NPV(5%)1 $570M
Payback period 6 years
Mine life 24 years
2014 Preliminary Economic Assessment by Tetra Tech & MTB Project Management Professionals
1 PEA technical report metal price assumptions are Ag = $21.26/oz, Cu = $3.00/lb, Pb = $0.96/lb & Sb = $5.00/lb
Ag Cu Pb Zn Ag Eq Ag Cu Pb Zn Ag Eq
(Mt) (g/t) (%) (%) (%) (g/t) (Moz) (Mlbs) (Mlbs) (Mlbs) (Moz)
Measured 1.12 843 843 30.3 0.0 0.0 0.0 30.3
Indicated 1.87 752 752 45.2 0.0 0.0 0.0 45.2
Total Meas. & Ind. 2.98 786 0.00% 0.00% 0.00% 786 75.5 0.0 0.0 0.0 75.5
Inferred 8.17 842 0.22% 0.35% 0.02% 880 221.3 39.6 63.1 3.6 231.4
Total Resources 11.16 827 0.16% 0.26% 0.01% 855 296.8 39.6 63.1 3.6 306.8
Grade Contained MetalOre
Tonnes
Sunshine Silver Mine: Largest Mineral Rights Holder in Idaho’s Silver Valley
36
Sunshine seized the opportunity during the sector downturn to become the largest mineral rights owner in Idaho’s Silver Valley, one of the world’s most prolific silver districts
Sunshine Pine Creek District
First Target: 75 MM OZ Silver
750+ MM Pounds Lead, Zinc & Copper
Sunshine East District
First Target: 15 MM OZ Silver
150+ MM Pounds Copper, Lead & Zinc
Sunshine-South
First Target: 150 MM OZ Silver
750+ MM Pounds Copper, Lead & Zinc
Sunshine Mine
First Target: 400 MM OZ Silver and open at depth
1.5+ B Pounds Copper, Lead & Zinc
Sunshine-Coeur d A’lene
First Target: 50 MM OZ Silver
500+ MM Pounds Copper, Lead & Zinc
Sunshine Silver Mine: Purchased Sunshine Refinery in 2013
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• A unique opportunity to be the only vertically integrated silver mining operation in the United States, having acquired the Sunshine Refinery in October 2013, and changed its name to Sunshine Mining & Refining Corporation
The Refinery makes Sunshine a Unique Silver Vehicle:
• Provides vertical integration from mining to refining of 99.98% pure silver bullion & possibly antimony metal
• Offers significant capital and operating expense savings vs. construction of new refinery or external processing of all silver-bearing concentrates
• Reduces risk of regulatory approval or delays as refinery is approved for operation under Sunshine’s existing federal water discharge permit
• Certified for direct delivery to COMEX
Sunshine Mine & Los Gatos:Size & Grade vs. Development Peers
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Resource Size (100%) & Grade of Construction-Development Peers(1)
(1) Peers per company public disclosure; All resource sizes are shown on a 100% basis and include Measured, Indicated & Inferred resources
The Sunshine & Los Gatos deposits are amongst the highest grade Ag deposits vs. their Silver Development Peers. MAG (shown in green) & Sunshine (shown in blue) are the only companies in the “Construction” phase
297
227
84
15
99
140
32
53
33
63
216
280
359
53
827
465
363
281248
181166
132106
8565
42 40 270
100
200
300
400
500
600
700
800
900
0
50
100
150
200
250
300
350
400
Silv
er R
eso
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e G
rad
e (g
/tA
g)
Re
sou
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Siz
e (M
oz)