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Silver Mines Limited

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September 16, 2024 at 7:50 AM (MDT)|Broadmoor Hotel & Resort

Jo Battershill

Managing Director

Jo Battershill commenced as CEO/MD of Silver Mines Limited at the start of 2024.

Prior to joining Silver Mines, Jo has had a highly-successful career spanning almost 30 years in mining, business development and finance both in Australia and internationally. Jo's previous experience includes the Managing Director role at AIM listed Anglesey Mining plc, Managing Director of Canaccord in London - running the sales and distribution of Australian equities into the UK and Europe markets, Executive Director at UBS in both London and Sydney and a VP role with Citigroup in Sydney. Prior to moving into the equity markets and financial services industry, Jo spent 10 year with WMC Resources in various operational and business development roles within the Nickel Business Unit.

This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

Firstly, I just like to thank everyone for being here at such an early time in the morning. I don't think I've ever attended a conference at this time, let alone presented at this time. Just go straight into the introduction here. And it would be fair to say that we would, we would prefer to be giving a slightly different message this year than we are giving this time last year for, for, for those that were present. They would have heard my predecessor talk about the planning consent from the new South Wales Department of Planning being in place and all systems go with respect to the optimization of the 2018 feasibility study. Unfortunately, whilst the optimization study is well advanced and we're expecting some results to be to be available in the next 2 to 3 weeks. We sadly lost our new South Wales Planning consent. It was revoked in the court of appeal for New South Wales. So why was it revoked? Well, it was nothing to do with Koalas or lead or any environment, environmental related or biodiversity aspects, which is what the green lobby and the Environmental defense office will have you believe we've done nothing wrong? No one's done anything wrong. It was a, it was a very minor point of administrative law that had not been followed. I think it's important to differentiate at this point that it's very different to the federal decision undertaken on, on regions, resources for the section 10. that, that's a disgraceful decision and, and hopefully it will be, will be revoked in, in, in the Australian Senate. Ours is a very minor state issue that that we believe will be resolved in time. What is the way forward? We'll have a much clearer view on that over the next 3 to 4 weeks, it would be fair to say that we've had some very positive discussions with both the Department of Natural Resources in New South Wales and the Planning Department. Just prior to departing Australia for, for, for America, for these conferences, we had a face to face meeting with the with the, with the state Minister for Natural Resources in New South Wales. I told her we'd been meeting with some of the world's largest silver and gold investors. And what did she want me to say to them? And she said without, without batting an eye, she said, tell them you've got the full support of the new South Wales government. So we believe we do and we believe that you know, we will have AAA much clearer path forward over the next 3 to 4 weeks. So what does silver mines have? We have one of the largest undeveloped silver projects in the world. It's 190 million ounces of silver with 395 396 million ounces of silver equivalent. It is the largest undeveloped silver project in Australia. It's an advanced project with almost 100 million ounces in reserves of which 70 million ounces of silver. So very good leverage to to to the to the strong silver price environment. The grade of that reserve is about 100 g or just over 100 g, silver equivalent and about 70 g silver. Excuse me, also, we have over 2 2100 square kilometers, excuse me, of highly prospective ground within the Macquarie Ark. And we'll come on to that a little bit later. The share trading history on this on this slide is is, is is fairly unforgiving, but I think it shows three things. It demonstrates that prior to losing the planning consent, recently silver mines had exceptionally strong historical correlation to the silver price, which is what investors are after. Unfortunately, as you can see towards the the the the the right hand side there, it also shows the impact of losing your consent when you are a single asset, single commodity company. However, I think importantly, what it also shows is that there's exceptional upside to when we get the permit back, which we, we believe we will get that consent back on the ESG side. We're very pleased to have partnered with Jamie Strauss's team at Digby. And our first score last year within this process was a highly credible triple B rating which we believe reflects the robust processes around our technical design, environmental and social studies and assessments. Now, we, we, we, we very much realize that this is a starting point and there's a lot of work to do. And we, and we, we, we look forward to the rest of that journey. Why silver look, I mean, for most people in this room, it's, it's it's fairly obvious. And I would point out that within the Australian market, Silver's a bit of an orphan really. It's ii I mean, I would argue there's only really ever been two successful silver developments of, of any scale. One being broken Hill and the other being South 32. the rest have been relatively small and quite disappointing both economically and technically subsequently Australian investors have tended to to, to avoid silver stocks. and, and, and, and, and perhaps that's understandable given the, the, the plethora of, of, of strong operating gold stocks to choose from. However, we believe that silver is a material of innovation, it's got unique properties, there's a vast number of uses and is a, is a significant store of wealth that trades in, in, in parallel with gold. On the supply and demand side, new minds are few and far between demand growth is strong as evidenced by solar and, and, and five G and, and many electrical and industrial applications. And interestingly, there's, there's some fairly strong demand statistics that don't really get publicized too too aggressively in the media like other metals. for instance, Indian imports of silver in the first six months of this year are 100 and 46 million ounces. That's up 700% year on year from 18 million. Fundamentally for silver deficits are increasing. Production is flat down and stockpiles. Surface stockpiles are shrinking. Yeah, the solar industry is, is a is a classic case in point. The the growth of solar has has been absolutely exponential. Is it going to be maintained at those sort of growth rates? I don't know that's not for me to answer, but I believe the destination or the direction of travel is set with respect to this journey. The solar industry is an inexhaustible fuel source. And in 2023 the the world installed 200 gigawatts of new capacity which takes generating capacity to just over one terawatt. That's up 10 fold in the last 10 years to meet the decarbonisation targets set by 2050 set by global governments that's gotta grow by 70 times now, personally, I don't believe those numbers are achievable. I just don't think there's enough silver in the ground. However, it puts us in a, in a, in a very strong position for, for, for growth in both silver volumes and, and, and silver pricing. One of the benefits we have from being in New South Wales is that New South Wales government has put in place its, its own critical minerals and high tech metal strategy. Now, whilst we haven't seen many benefits of this yet, we believe that it will provide a very strong point of differentiation and, and, and argument with the the the well with the government and the planning department in in in reinstating our planning consents. So again, we, we, we look forward to continuing those discussions in terms of bows itself. Look, it's, it's a terrific location. It's 3.5 hours northwest of Sydney in New South Wales. it's not desert, it's, yeah, we're not, we're not looking at fly and fly out operations. It's a, it's an enormous resource base still potential to grow both at depth and a long strike. And, and it's, it's well advanced. As, as I mentioned earlier, the them excuse me, the the mineral base was, was expanded by about 56 per cent in early 2023. Going into the optimization, we had the benefit of of an additional 50,000 m of drilling from the 2018 feasibility study. Now, we don't expect to see the same level of uplift in the mineral reserve when we put the optimization numbers out. But we believe there is there is strong potential to, to see this mine extended beyond this initial 15 year mine plan. We're targeting initial production certainly over the 1st 7 to 8 years of between five and 5.5 million ounces of silver equivalent. III I I'd like to be able to, to, to provide a bit more clarity on on the the numbers. But unfortunately, we're, we're sort of calling that timeline between the 2018 numbers and, and, and the optimization and, and the 28 numbers, 2018 numbers are, are, are a little bit stale. This is a very quick snapshot of that feasibility study. This is a flitch plan of the open bit shows demonstrates good continuity of mineralization of the high grade mineralization 29.9 million tons. So basically 30 million tons of reserves. It's a fif 14 year mine or actual mining life and a 16.5 year processing life over 50 million ounces of silver, a very, very low strip ratio and some associated by product credits. In terms of the optimization program, we, we're we're looking at making some changes to this design. All positive the key aspects I just want to touch on. Firstly, on the tailings, the current plan is for, for, for a large hydraulic conventional hydraulic tails. We're looking at converting that to a dry stack tail over the next 2 to 3 months. Excuse me, the work will be finalized on that overall, we're looking at a much smaller footprint. One of the complaints during the public consultation period was the size. So we've taken taken that into consideration the open pit is smaller, there was a power line that needs to be moved. We've removed the necessity to do that, which is both positive from a permanent perspective and economics and encouraging on the metallurgical and processing side. Historically, we were looking at two flotation streams here, one for a silver lead concentrate and the other was a, was a zinc concentrate. However, at the start of this year, we, we, we looked at sort of pulling a few levers with respect to that me with, with, with respect to the metallurgy. And I've come up with a design now that is a single float, a bulk float, excuse me. So it's a, a single concentrate, a high grade silver concentrate with, with around 27 to 28% lead and zinc. the benefits of that are are are numerous in, in that it gives us better silver recoveries over the life of the operation. It gives us better pay ability. because the silver that went through into the zinc concentrate is only 70% payable. So we've increased that but it also dramatically reduces the variability which from a planning perspective is very important. And as I said, feasibility study optimization is is is well underway targeted for completion in this half of the year. And, and we'll throw that into the mix with the discussions around the new South Wales development application. It's very important to add that we're not finished here by any stretch of the imagination. We don't have a druid spinning on, on, on the depth extensions just yet. We, we, we, we, we're about to start drilling on another project just to the north. But what these slides demonstrate is again, you know, strong continuity of the high grade mineralization within the, within the open pit, but also some quite exceptional grades at depth. Now the all body does morph somewhat as you, as you, as you step down, it, you, you, you, you lose the width but you gain the grade. And Encouragingly, as you can see from the Bandara zone, on the right hand side there, we are starting to see gold in the system. And towards, towards the, the, the deeper portion of that, we are seeing some child prate as well. So potentially getting into the, the, the the hotter part of the system. What this demonstrates certainly from the, the narrow high grade hits though is that at some point in the future, you know, there is there is some work to do here on, on potentially introducing a higher grade underground. So just to conclude on Bowden's look, it's one of the largest undeveloped silver projects in the world. It's a single open cut mine with uncomplicated mining. It's a low strip ratio with standard metallurgy. The initial mine life of 16 years is we think conservative. And we can see potential expansion opportunities from both underground and extensions to the open pit. I just want to quickly touch on exploration. We, we have an enormous land package here over half million acres. And we have another package of land a bit further west at TNA, which is the southern extensions of excuse me, of the, of the MC Phil trend. Hm I just want to touch here on, on the Barrow Creek prospect, which is the red star just north of Bowden's, it's about five Ks north of Bowden's. as you can see from the, the, the top, right. I mean, we, we, we are on the, the most eastern limb of the Macquarie Arc. We, we essentially own the entirety of that eastern limb about 80 kilometers. and it's massively under explored and highly prospective with Barrow Creek. It sits on the on the northern rim of the Bowden's called Era Complex. So very analogous with the with the Bowden's deposit itself, it was discovered or the, the prospect was discovered from stream sediment results for, for gold copper silver in, in 1989 by cr a. we're very excited by the fact that it, that it does appear to be on the edge of one of these collapse school areas which we can see both in in, in, in conventional geophysics and, and, and some recent seismic studies we've done on the mapping. We, we're seeing extensive Ralston volcanics with rite bretches alterations of, of light silica. We're seeing dark gray quartz veins with low temperature quartz and we're seeing visible mineralization within the volcanic plastic units. We're seeing pyrite with iron staining and some quarter grains por we've just finished up, we're just finishing up a very close space gravity survey around the around the project and we received our drill permits for this last week. So over the course of the next 3 to 4 weeks, you know, we do expect to be having the rigs turning and, and, and, and looking for the next balance. And to the south there, Komba very quickly. I mean, that was a discovery made by, by CR A in 1997. There's all grade sections from surface, we're currently negotiating land access down there. And we would like to be down there drilling at some point in the next 3 to 6 months as well. But land access agreements will determine that. And Alex, I think I'll, I'll, I'll leave it there. I think for questions Alright, thanks. If there's any questions from the floor is a microphone roaming around? No. Ok. I'll, I'll start with one just on the, the permitting obviously key. I don't know if you can give any indication on that timeline around your proposals and then the the regulatory response un un unfortunately not yet. Look, I think when, when the decision was first handed down, we, we were, we were eight, firstly, very, very shocked. And secondly, a little bit confused given that we hadn't done anything wrong. Look, I mean, the worst case, worst case scenario on the day was that we were going to have to start again, which pick a timeline between 18 months and four years. But we're now we're now very confident that that's not the situation. Excuse me, we, we, we've, we've had some expert legal advice that would suggest that we should be able to just drop back into the planning process. And whether that's three months, six months, 12 months. But I think it would be in that time frame rather than anything longer and being a critical mineral. you know, does that help it get over the line in New South Wales? Is that a boost for the project? Well, yeah, I mean, as I mentioned in the presentation there, you know, they, they, they have the critical mineral strategy. And, and we were really sort of first cab off the rank in terms of permitting and, and potential development. And unfortunately, the government, it was, it was one of the budgetary cuts last year in terms of some of the support. However, in our discussions with the Department of Natural Resources, they're very keen to demonstrate support. And the, the, the critical mineral strategy is, is, has been something that's been mentioned quite a lot in those discussions. Yeah. Ok. Just a quick final question, I suppose you've so it's a bit a bit unusual in Australia is how do you see the education piece around its industrial uses, critical uses? Is, is that an upside for the company? Oh, look, absolutely. I mean, yeah, we've, we've, I, I've had meetings with retail investors that, that don't realize just the the amount of silver that goes into, into, into a solar panel. And New South Wales is, has got one of the highest take ups of, of solar power generation in the world. So, yeah, I mean, iiii I see it as significant upside and I, I've chatted to a few of the other silver companies in Australia and you know, we, we, we, we're all trying to push the same message. Ok. I think that's all the time we have. Thanks so much for that. Thank you.


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