2013 Q3 Presentation

1. Q3 2013 Conference Call
November 13, 2013
TSX:USA
OTCQX:USGIF

2. Forward Looking Statement – Safe Harbour
Certain information in this presentation may contain forward-looking statements. This information is based on current expectations that are subject to
significant risks, assumptions and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forwardlooking statements. All statements, other than statements of historical fact, included in the presentation, including, without limitation, statements
regarding potential mineralization and reserves, exploration results, and future plans and objectives of U.S. Silver & Gold, are forward-looking
statements. Words such as “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “intend”, “believe” and other similar expressions are forwardlooking statements. Forward-looking statements are not guarantees of future results and conditions but rather reflect our current views with respect to
future events and are subject to risks, uncertainties, assumptions and other factors, and actual results and future events could differ materially from
those anticipated in such statements. There can be no assurance that such forward-looking statements will prove to be accurate. U.S. Silver & Gold
assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the
forward looking-statements unless and until required by securities laws applicable to the U.S. Silver & Gold. Additional information identifying risks
and uncertainties is contained in filings by U.S. Silver & Gold with the Canadian securities regulators, which filings are available at www.sedar.com.
An additional Cautionary Note to Investors – In the event that we use certain terms in this presentation, such as “resource”, “measured resource”,
“indicated resource” and “inferred resource”. U.S. investors are cautioned that, while such terms are recognized and required by Canadian Securities
Laws, the United States Securities and Exchange Commission does not recognize them. Under U.S. standards, mineralization may not be classified
as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time
the reserve determination has been made. U.S. investors should not assume that all or any part of measured or indicated resources will ever be
converted into reserves. In addition, “inferred resources” have a great amount of uncertainty as to their existence and as to whether they can be
mined legally or economically. Accordingly, information concerning descriptions of mineralization in this presentation may not be comparable to
information made public by companies that are subject to the SEC’s Industry Guide 7.
Mr. Jim Atkinson, Vice President, Exploration and a Qualified Person under Canadian Securities Administrators guidelines has approved the
applicable contents of this presentation.
For further information on the Galena Complex, please refer to the technical report entitled “Technical Report, Galena Complex, Shoshone County
Idaho” dated March 22, 2013 and available on the U.S. Silver & Gold Inc. SEDAR profile at www.sedar.com.
Some of the potential quantities and grades disclosed are conceptual in nature, there has been insufficient exploration to define a mineral resource on
all of the mineralization at the Galena Complex and it is uncertain if further exploration will result in certain targets being delineated as a mineral
resource.
2

3. Roadmap to Success
•
•
Strategic
Objective
To expand silver
production profitably
through the development
of our own projects and
consolidation of
complementary projects
Continued execution on cost savings and
operational improvements.
Further strengthen the balance sheet.
•
Fast track the high-grade areas of the
Caladay Zone into production.
•
Align exploration, processing and capital
synergies with assets in Silver Valley.
•
Seek accretive acquisition opportunities.
5.0M oz Ag by end of 2015
3

4. U.S. Silver & Gold
• Operating profit of $0.7 million at Galena Mine
excluding severance costs related to Small Mine
Plan.
Q3 2013
Achievements
• Cash costs reduced 13% year-over-year to $17.67
per ounce, all-in sustaining costs reduced by 30%
to $23 per ounce.
• Commenced production of silver/copper areas
adjacent to Caladay Zone with production on track
to deliver 100 tons per day by year-end.
• Restructured debt from short term to long term, and
completed $5.78 million private placement.
• Sold non-core mining claims for approximately
$2.85 million.
• October production of approximately 175,000
ounces at average grade over 15 ounces per ton.
Committed to increasing shareholder value
4
4

5. Q3 Key Statistics - Galena Mine Complex
Q3-2013
Q3-2012
40,746
56,488
11.84
10.03
Lead head grade (%)
4.47
5.05
Copper head grade (%)
0.40
0.32
Silver recoveries (%)
96.4
96.1
Lead recoveries (%)
92.5
91.6
Copper recoveries (%)
96.0
96.1
Silver produced (oz.)
464,850
544,104
Lead produced (lbs.)
705,665
1,429,449
Copper produced (lbs.)
244,653
259,445
Silver sold (oz.)
505,613
602,401
Lead sold (lbs.)
684,737
1,415,361
Copper sold (lbs.)
265,962
263,242
$21.40
$27.68
Realized lead price ($/lb.)
$0.96
$0.92
Realized copper price ($/lb.)
$3.24
$3.24
$17.67
$20.29
Tons milled
Silver head grade (oz./ton)
Realized silver price ($/oz.)
Silver cash costs ($/oz.)
• Reduction in tons milled as expected
following 30% reduction in staffing.
• 18% increase in silver grade mined
for the quarter.
• Silver and copper recoveries
consistent year-over-year.
• Significant reduction in cash costs
due to implementation of Small Mine
Plan.
• Q4 plan on track.
2013 focus on most profitable ounces
5
5

6. U.S. Silver & Gold
• Operating stopes reduced from over 25 to
approximately 15.
Small Mine
Plan Update
• Silver equivalent cut-off grade increased 30% to
above 15 oz/ton.
• Staffing at Galena Complex reduced from 388 to
255.
• Coeur Shaft put on care and maintenance.
• Levels 2800, 3000, 3200, 4300 and 5500 put on
care and maintenance.
• Capital expenditures limited to mine development
directly in support of SMP.
• Exploration focused on increasing confidence of
high-grade resources adjacent to current mine
infrastructure and Caladay Zone.
Committed to increasing shareholder value
6
6

7. Production Highlights
Galena Production
20
25,000
20,000
$33.19/oz
$32.77/oz
$31.96/oz
$31.11/oz
16
$30.33/oz
15,000
$28.80/oz
14
$25.20/oz
10,000
$23.01/oz
12
$21.84/oz
$21.11/oz
$22.56/oz
$21.92/oz
5,000
$19.71/oz
10
Ore milled, tons
Grade, oz/ton Ag equivalent
18
0
8
Oct‐12
Jan‐13
Apr‐13
Tonnage
Grade
Jul‐13
Oct‐13
Silver Price
Silver equivalent calculated using $22.00/oz silver, $0.90/lb lead and $3.25/lb copper
Reducing tons, increasing grade
7
7

8. Executing On Cost Savings And Operational
Improvements
$35.00
$30.00
Q3 2012
$25.00
Q4 2012
Q1 2013
Q2 2013
$20.00
Q3 2013
Q4 2013 (Expected)
$15.00
$10.00
Cash Cost *
All In Sustaining Cash Cost **
*Calculated per silver industry standards
**Silver industry cash cost plus all development, capital expenditures, exploration spending and mine G&A
Trending in the right direction
8
8

9. Q3 2013 Financial Highlights
• Realized silver price down 23% to $21.40 per
ounce vs. $27.68 per ounce in Q3, 2012.
Is the SMP
Delivering
Results?
• SMP and fiscal constraint delivering positive
results:
•
•
•
•
Q3 cash costs down 13% year-over-year and 5% yearto-date.
Q3 all-in sustaining costs down approximately 30% yearover-year.
Capital and exploration spending down $18 million yearover-year and $14 million from 2013 budget.
G&A costs reduced by $2 million year-over-year.
• Galena operating profit of $0.7 million excluding
costs related to SMP.
• Cash and cash equivalents of $5.8M as at
September 30, 2013 and net working capital of
$11.3 million.
Galena Mine operating profit of $0.7 million
9

10. 2013 Exploration Update
• Exploration budget reduced to $0.7 million
for second half of 2013.
Galena
Complex
• Going forward, focus will be on implementing
SMP and increasing grade mined to be
profitable at current silver prices.
• Exploration work is focused on:
•
Expanding the Caladay Zone
•
Block modelling and evaluating existing drill results
•
Developing high-grade silver resources close to
existing infrastructure.
• Production from silver/copper areas adjacent
to Caladay Zone helping understanding of
geology and providing new drill stations.
Continue to grow resource base
10

11. Galena Complex - Long Section
Existing
Resource
Existing
Resource
Caladay resources represent potential for bulk mining zone
11

12. Caladay Zone – 4900 Level: Milkshake Vein
N
0
Scale
250
Feet
Caladay
Zone
(Silver - Lead)
191 feet
10.9’ width
Silver - Copper
Targets
20.2 opt Ag
Lower Grade Area
November 2013
Close proximity to existing mine infrastructure
12

13. 2013 Silver Guidance
• Third quarter production in line with expectations
2.1-2.2M
oz Ag
•
•
Production within budget.
Cash costs slightly higher due to severance payments and
labour requirement for low-grade stope closure.
• Guidance on track:
•
$15.50-$17.50
Ag Cash Costs/oz
•
•
Galena Complex expected to deliver 850,000 – 1,000,000
during second half of 2013.
Q4 expected to be the lowest cost quarter of the year.
Approximately 175,000 ounces produced in October is a
great start.
• Profitable silver production can be increased
quickly if silver price recovers to the $28-30 /
ounce range:
•
•
•
At Galena, 10-15 stopes closed properly for future
production.
Coeur Mine resources are prepared for re-start.
Caladay Zone expansion plans can be accelerated further.
Focused on mining profitable ounces
13

14. U.S. Silver & Gold
Q4, 2013
and Beyond
• Continued focus on fiscal restraint and mining
increased cut-off grades.
• Continued emphasis on balance sheet
preservation.
• Continued exploration, development and
increased production from Caladay Zone.
• Focus development capital to remove the
bottleneck between 4900 and 5500 levels
and access known high grade veins already
in reserves.
Fiscal restraint, balance sheet preservation
14
14

15. How Much Production Does $1,000 Buy?*
* As of November 13, 2013 and based on public disclosure documents. Market data and other statistical information used in this presentation may be based on independent industry publications,
government publications, reports by market research firms, or other published independent sources. Some data is also based on U.S. Silver & Gold’s good faith estimates that are derived from its
review of internal data and information, as well as the sources listed above. Although U.S. Silver & Gold believes these sources are reliable, U.S. Silver & Gold has not independently verified the
information and cannot guarantee its accuracy or completeness.
Highest leverage to silver price15
15

16. Invest in U.S. Silver & Gold
• Producing 2.1 – 2.2 million Ag oz.
Highest silver
production
leverage per
$1,000 invested in
silver industry.
• Executing on cost reductions and higher
grade production.
• Development of Caladay Zone on-track,
current production from adjacent
silver/copper areas
• 100% owned, royalty free.
• Fully permitted.
• Excess hoisting and milling capacity.
• Experienced management team.
• Catalysts in place for improved valuation.
Focused on improving share price
16

17. Contact
Darren Blasutti, President & CEO
dblasutti@us-silver.com
416-848-9503
Nicole Richard, Investor Relations
nrichard@us-silver.com
416-848-9503
www.us-silver.com