ON THE ROAD TO PRODUCTION Minco Silver Corporation November 2010
Disclaimer Forward Looking Statements Except for the statements of historical fact, the information contained herein is of a forward-looking nature. Such forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievement of the Company to be materially different from any future results, performance or achievements expressed or implied by statements containing forward-looking information. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that statements containing forward looking information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on statements containing forward looking information. Readers should review the risk factors set out in the Company s prospectus and the documents incorporated by reference. Cautionary Note to U.S. Investors Concerning Estimates of Inferred Resources This presentation uses the term Inferred Resources. U.S. investors are advised that while this term is recognized and required by Canadian regulations, the Securities and Exchange Commission does not recognize it. Inferred Resources have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Resources may not form the basis of feasibility or other economic studies. U.S. investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.
Minco Silver Corporation Shares & Capitalization Oct. 31, 2010 Shares outstanding 47,976,387 Warrants 1,150,000 Options 4,411,668 Fully Diluted 53,538,055 Analytical Coverage Oct. 31, 2010 Raymond James Brad Humphrey BMO Andrew Kaip Haywood Chris Thompson 52 week Hi/Lo C$1.55 - C$6.70 Union Securities Brian Mok CAPITALIZATION Oct. 31, 2010 Market Capitalization Working Capital Debt C$260M C$21M Nil SHAREHOLDERS Minco Gold 27.10% IDG / et al 22.51% CDN. Institutions 8.70% U.S.A Institutions 10.39% 1
Senior Management Team Dr. Ken Z. Cai Chairman & C.E.O. Ph.D. in Mineral Economics - Queen s University, Canada 26 years experience in mineral exploration, project evaluation, finance, and company management High level contacts with the Chinese government and within the mining community Dr. Dianmin Chen V.P. Operations Ph.D. in Mining Geomechanics - University of Wollongong, Australia Senior mining engineer with 28 years of experience in mine construction, operations, management, project development, strategic planning and corporate management Worked for Rio Tinto, Barrick, & Sino Gold, CITIC Pacific Mining Based at Fuwan site Fully comprehensive in the Chinese language/culture 2
Senior Management Team Dwayne Melrose, P.Geo. V.P. Exploration Over 25 years experience in mineral exploration and mine production Former Exploration Manager of the Kumtor Gold Mine with significance success, responsible for discovery of new high grade SB Zone Worked within Canada, USA, Kazakhstan, Kyrgyz Republic and China Paul Zhang, C.A., C.P.A.(IL) V.P. Finance & C.F.O. Chartered Accountant (Canada), Certified Public Accountant (Illinois, USA); Extensive experience with TSX listed entities in CFO capacity Over 10 years of senior financial/accounting management experience, particularly with TSX and US listed entities with operations in China Fully comprehensive in the Chinese language/culture. 3
Fuwan Silver Project Located in Guangdong Province, 45 km southwest of Guangzhou, China s 4 th largest city. Foshan Minco is the operating company for the Fuwan Silver Project and holds 100% of the exploration permits. Ownership of Foshan Minco Fuwan Silver 90% Minco Silver 10% carrying interest by Guangdong Geological Exploration & Development Corporation, a government entity Large land package: Over 200 km 2 with only a small portion explored to date 4
Exploration Permits 3 permits covering 205 km 2 Only company working this area 3 additional showings in immediate area Only worked one showing or 3% of property to date Excellent potential to upgrade current indicated and inferred resources 10km strike could host 400 mill oz (approx) 5
Regional Explorations Excellent Regional Potential 50,000 Soil Samples taken Strong gold-silver anomalies Geophysics program completed Excellent potential to upgrade current indicated and inferred resources Belt could host total 400 million ounces of silver Work on regional once in production Fuwan Silver Belt has a 10 km strike length THREE LARGE ADDITIONAL SHOWINGS 6
Fuwan Silver Deposit Longitudinal section Silver zones are shallow (250-450m deep), high grade, flat-lying, and strata bound Hosted within Carboniferous limestone unconformity overlain by Triassic sandstone Eight silver zones controlled by a NE trending syncline Total strike length is 2,800 metres, deposit remains open along strike to the southwest and down dip to the southeast 7
Project Infrastructure Excellent infrastructure Accessible by paved highway and nearby waterway Power, water, fuel and supplies easily obtainable Paved highway near Fuwan Fuwan Silver Deposit Power Plant Fuwan Township Pop. 30,000 Property accommodates tailings, waste disposal, & processing plant sites General labour readily accessible Supporting industries in close proximity Eastern view from Fuwan Deposit 8
HIGHLIGHTS (July 09 - July10) Delivered positive Bankable Feasibility on the Fuwan Project Obtained majority of permits for the Fuwan Project Engaged experienced VP Operations to build & operate Fuwan mine Closed $17.25 million in non-brokered private placements Concluded Sterling matter with positive outcome Received initiating coverage from BMO and Haywood Increased analytical coverage target prices 9
Fuwan Feasibility Study Highlights Study Completed by Wardrop, NERIN & ERM to International Standards Only Reserves of 55 million oz are used in the Study Reserve/Resources 55 million oz Silver classified as probable reserve 103 million oz Silver classified as indicated & inferred resources Mining Decline access Underground mechanized mining Combination of cut & fill, drift & fill, room & pillar Processing 3,000 tpd, conventional floatation, 5.5 million oz per annum End products of two concentrates: silver/lead; zinc/silver Metallurgical silver recovery of 91% Economics Capex: $73.1 M Opex: $34.42/tonne of ore processed NPV: $111.5 M Pre-tax IRR: 33.20% Payback: 2.3 years - Silver Price used: $13.57/ounce - Discount rate: 6% 10
International Bankable Feasibility Study (IFS) completed in September 2009 Key Indicators Results ($ = US dollar) Probable Reserve of Silver (9.118 Mt averaging 189 g/t of Silver) 55 million ounces Mine Life 9.2 years Metallurgical Silver Recovery 91% Average Annual Recovery of Silver 5.5 million ounces Operating Costs (per tonne ore processed) (Mining = $18.01; Processing = $9.90; Tailings = $1.13; G&A = $4.78; Surface = $0.60) $34.42 Cash Cost per Payable ounce of Silver $5.65 Pre-Production Capital Costs $73.1 million Total Revenue $648.2 million Total Operating Cost $313.8 million Total Royalty Payment $24.3 million Total Operating Cash Flow $310.0 million NPV @ 8% Discount Rate $95.3 million NPV @ 6% Discount Rate $111.5 million Pre-Tax IRR 33.20% Payback Period of Pre-Production Capital Costs 2.3 years Construction Period 20 24 months ~~Silver Price used in above study $13.57 per oz (Base Case)~~ (3 year rolling average as at April 29, 2009) 11
Reserve / Resource Statement* (NI 43-101) Classification tonnes Ag Ag Au Pb Zn (g/t) (oz) (g/t) (%) (%) Probable Reserve (diluted - In Situ) 9,118,000 189 55,300,000 0.15 0.20 0.57 ~~~ all of the economics contained in the IFS are derived from the Probable Reserves only ~~~ Indicated Resources** Fuwan Permits *** 4,830,000 188 28,968,000 0.17 0.20 0.56 Changkeng Permits - **** 2,027,000 142 9,235,000 0.40 0.20 0.61 Total Indicated Resources 6,857,000 173 38,203,000 0.24 0.20 0.57 Inferred Resources** Fuwan Permits 10,241,000 171 56,147,000 0.26 0.26 0.72 Changkeng Permits **** 1,049,000 212 7,136,000 0.29 0.37 0.86 Total Inferred Resources 11,290,000 174 63,283,000 0.26 0.27 0.73 ***NI 43-101 compliant, P&E Engineering ( May 2008) 40 g/t cut off *** Probable reserves were subtracted from the Indicated resources at the Fuwan Permit **** Resources reported on the Changkeng permit represents 51% of the actual resource s and reflects Minco s actual ownership. 12
Probable Reserves Layout Longitudinal section 13
Reserves and Resources Layout CHANGKENG DEPOSIT NORTH SHAFT FUWAN DEPOSIT VENT West Vent Shaft WASTE ROCK PROCESSING PLANT ADMIN SERVICES TAILINGS EXPLOSIVE MAGAZINE Red = Probable reserves Silver = Indicated & Inferred 14
Surface Layout MINE AREA PROCESSING PLANT WASTE ROCK TAILINGS ADMIN SERVICES EXPLOSIVES MAGAZINE 15
Permitting Process Approved Chinese exploration report approved by MOLAR (Ministry of Land and Resources) Chinese Feasibility Study Project Approved by the Gaoming County government Soil and Water Conservation Plan Mining Area Permit approved by MOLAR Land use permit Geological Hazard Assessment Technical Panel Review of the Regulatory Environmental Impact Assessment (EIA) Approval Pending Administrative Approval of Regulatory EIA Mine Development Plan Preliminary Safety Assessment In Progress Project Application 16
Silver Price (US$/oz) Trade Weighted US Dollar Silver Price (US$/oz) Silver vs US Dollar Precious Metal Characteristics Historical expectation to trade in line with gold, with norm of 55:1 for gold-to-silver price ratio Gold-to-silver price ratio declined from over 80, but still significant room for improvement Used as an inflation hedge (similar to gold) $120 $110 $100 Trade Weighted US$ Silver Price $24 $20 $16 In gold bull markets, silver has historically outperformed $90 $12 Increasing Demand Fundamentals from Industrial Uses Uncertain Supply Fundamentals Silver stands to benefit from global economic recovery due to industrial uses Economic stimulus measures should fuel demand significant amount of stimulus money remaining to be spent in U.S. should support short-term demand Strong growth in emerging market economies to support demand in the short and longer term overall demand for industrial silver expected to rebound 7-8% in 2010 Diminishing mine supply limited large scale development projects in pipeline Significant amount of supply sourced as by-product of mining for other metals persistent uncertainty around silver supply Relatively high currency levels in producing countries further discouraging expansion of supply $60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 $25 $20 $18 $15 $10 $80 $70 Source: Bloomberg Silver Price Outlook (Research Analysts vs. Forward Curve) $5 $23 $23 $22 $22 $19 $18 $16 $22 Full Analyst Range Analyst Range Excluding Top and Bottom 15% Street Median Consensus Prices Forward Curve $22 $22 $15 $15 $15-2010 2012 2014 2016 Source: Equity research, Bloomberg and Thomson Financial Note: Forward curve converted to real prices based on 2% assumed annual inflation $8 $4 - Silver market fundamentals support further strength in the silver price 17
2008 Performance 2009 Performance 2010 YTD Performance Gold Spot 6% Intermediate Base Metals 340% Silver Developers 53% Silver Spot (23%) Gold Developers 286% Intermediate Gold 43% Senior Gold (24%) Junior Gold 189% Gold Developers 39% Intermediate Gold (25%) Senior Diversified 152% Junior Gold 35% Junior Gold (44%) Silver Producers 142% Silver Spot 35% S&P TSX (47%) Intermediate Gold 132% Silver Producers 34% Gold Developers (53%) Silver Developers 112% Gold Spot 22% Silver Producers (57%) S&P TSX 51% Intermediate Base Metals 18% Silver Developers (61%) Silver Spot 48% Senior Gold 16% Senior Diversified (63%) Senior Gold 29% S&P TSX 10% Intermediate Base Metals (83%) Gold Spot 25% Senior Diversified 10% Source: Bloomberg Note: Performance based on US dollar returns, adjusted for dividends and splits; see Appendix B for index constituents Silver developers have outperformed silver price year-to-date; silver producers have performed in-line 18
Quick Silver Facts SILVER THE INDISPENSIBLE METAL USES TODAY Electronics such as computers, cell phones, televisions Coatings, automotive, clothing, medical applications Most silver used cannot be recycled, which demands continuous new supply WE SELL Directly to smelter at competitive world pricing WHERE WE RANK WHEN IN PRODUCTION #1 in China (among its silver producers) #7 as a primary silver producer (based on the 2007 Brook Hunt s Silver Report) 19
OBJECTIVE To become a mid tier silver producer Annual production of 5 to 10 million oz of silver 2010 The Road Ahead Completion of permitting for Fuwan project Project financing Commence mine construction in Q4 2010 20
Relative Performance Remember SILVERCORP? (excerpt from RJ Analytical Report by Brad Humphrey) Minco Today Strong Growth Potential for Minco Silver 21
2772-1055 West Georgia St. PO Box 11176 Vancouver, B.C. V6E 3R5 1. 888. 288. 8288 T 604. 688. 8002 F 604. 688. 8030 info@mincosilver.ca www.mincosilver.ca TSX: MSV