SAC May Presentation 2012

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

VALUE. GROWTH. VISION

Corporate Presentation May 2012

TSX: SAC, US OTC: SOHAF www.soamsilver.com

Cautionary Notes

2

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. Investors are advised to review the Company’s Annual Information Form filed at www.sedar.com for a detailed discussion of investment risks. 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. Cautionary note regarding reserve and resource estimates The material in this presentation has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of U.S. securities laws. Unless otherwise indicated, all resource and reserve estimates included in this presentation have been prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining and Metallurgy Classification System. NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (“SEC”), and resource and reserve information contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “reserves”. Investors should also understand that “inferred mineral 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 mineral resource” will ever be upgraded to a higher category. The estimation of quantities of resources and reserves is complex, based on significant subjective assumptions and forward-looking information, including assumptions that arise from the evaluation of geological, geophysical, engineering and economic data for a given ore body. This data could change over time as a result of numerous factors, including new information gained from development activities, evolving production history and a reassessment of the viability of production under different economic conditions. Changes in data and/or assumptions could cause reserve estimates to substantially change from period to period. No assurance can be given that the indicated level of mineral will be produced. Actual production could differ from expected production and an adverse change in mineral prices could make a reserve uneconomic to mine. Variations could also occur in actual ore grades and recovery rates from estimates.

http://www.sedar.com/

Investment Highlights

3

• 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-gallium resources

o Updated 2011 PEA study doubles estimated production to 13.2 M oz silver, 80 tonnes of indium and 15 tonnes of gallium per year, for first 5 yrs

o NI 43-101-qualified Indicated resource of 230.3 million ozs silver, 1,481 tonnes of indium and 1,082 tonnes of gallium and an Inferred resource of 140 million ozs silver, 935 tonnes indium and 1,001 tonnes gallium.

Escalones: high potential copper-gold-silver deposit with an Inferred resource of 3.8 billion lbs of copper and 610,000 oz of gold and 16.8 million ozs silver

• Well-defined business plan to drive shareholder value • More than $230 worth of metal in the ground per share (>$100 of silver, >$100 of

copper, and >$30 of indium and gallium1

• Attractive investment value relative to peers at low value per oz • Anticipated low cost silver production at approximately $2.94/oz of silver2 • Strong focus on community relations to proactively facilitate mutually beneficial

relationships

South American Silver Corp.

1) $25/oz silver, $3/lb copper, $700/kg indium and gallium 2) Net of base metal credits

World-Class Deposits

4

Two large-scale assets in South America Malku Khota, silver-indium project, Bolivia

(100%) • Pre-Feasibility level update in Q2 2012 with

Feasibility work starting in H2 2012 • Bulk mineable open-pit, sediment hosted deposit • Low capital and operating costs as a heap leach

or milling operation • Potential to be one of the worlds top producing

silver and indium mines • Resource expansion potential with only 4 km of a

15 km trend drill tested on the 50 sq km property

1)Silver Equivalent (Ag Eq) calculated using total contained metal using base case metal pricing (Ag at $18/oz, In at $500/kg , Ga at $500/kg, Cu at $3/lb, Pb at $0.90/lb, and Zn at $0.90).

Total Contained Metal

Silver Indium Gallium Aq Eq1

Moz Tonnes Tonnes Moz

M&I 230 1,481 1,082 354 Inferred 140 935 1,001 240

In Situ Grade

Tonnes Silver Indium Gallium Aq Eq1

Millions g/t g/t g/t g/t M&I 255 28.10 5.8 4.3 43.77

Inferred 230 18.9 4.1 4.3 33.04

World-Class Deposits

5

Two large-scale assets in South America

1)Copper Equivalent (Cu Eq) calculated using total contained metal for copper ($3/lb), gold ($1200/oz), silver ($22/oz), and molybdenum ($16/lb) and has not been adjusted for metallurgical recoveries.

Escalones, copper-gold-silver project, Chile (100%)

• Inferred Resource of 3.8 billion lbs of Cu, 56.9 million lbs of Mo, 610,000 ozs of Au and 16.8 million ozs of Ag

• Phase II exploration program underway to include up to 7,000 meters of follow-up drilling

• Step-out testing of the known mineralized zones and testing of new geophysical targets

• Located within a world-renowned copper district near the world’s largest underground copper mine, El Teniente

In Situ Grade

Tonnes Copper Gold Silver Moly Cu Eq1

Millions % g/t g/t ppm % 420.6 0.41 0.05 1.24 61.39 0.49

Total Contained Metal

Copper Gold Silver Moly Cu Eq1

Mlbs Ozs Moz Mlbs Mlbs

Inferred 3,835 610,000 16.8 56.9 4,503

Emerging Opportunity for Mining in Bolivia

6

• Bolivia has been undergoing significant change over the past 6 years under the Morales administration including a new constitution with indigenous rights

• The Andean social movement toward greater local and indigenous autonomy is well developed in Bolivia

• Local indigenous support is the key to project success • Mining is Bolivia’s second largest economic sector

after Oil/Gas and is seen as a fundamental industry • Three major silver mines have been built within last

5 years under the current administration by Pan American Silver, Coeur D’Alene and Sumitomo Sumitomo’s San Cristobal mine: 3rd largest silver

mine and 6th largest zinc mine in the world *

• South American Silver’s management team has nearly 20 yrs experience in Bolivia

• Bolivian government has expressed support for SAC’s projects and their strong interest in encouraging private investment in the mining sector

*Image from : Sumitomo Metals and Mining http://www.sumitomocorp.co.jp/english/special/project_04/index.html

A developing resource based economy

• SAC is seeing strong local support from the Coalition of the local land owning indigenous Allyus

• Coalition lobbying on behalf of the project with National and Provincial government

Community Relations

7

A key to successful project development

TSX:SAC US OTC:SOHAF

• Programs modeled after success at Sumitomo’s San Cristobal mine and Newmont’s Inti Raymi mines in Bolivia

• Impact & Benefit agreements in place with land owning Allyus Scholarships/ Contributions to local schools Support for community health initiatives Involvement of the community in environmental monitoring Exploration related job training with local communities Promotion of traditional and cultural activities

• Instituting animal health initiatives to improve local economy which is based on subsistence farming and herding Vaccination program and veterinary treatment of herd animals Breeding program to improve herd quality and productivity

• Working with local indigenous communities to facilitate economic and business development related to project services and support

Share Capitalization

8

TSX:SAC, US OTC:SOHAF

Issued & Outstanding Fully Diluted3 Warrants2 Options1

114.6M 133.1M 8.2M 10.3M • ~$200 million I/O and in-the-money Market Capitalization(4)(5)

• Average 3 mo. trading volume 150,000 shares/day • ~$38 million in cash(6)

Asian Technology Strategic Investment • High technology materials manufacturers and Indium/Gallium end users from Taiwan, Hong Kong, Korea, and Japan

Private Equity Ownership • Zamin (UK) • Izurium (UK) Largest Institutional Ownership • Sprott Asset Management • Front Street • US Global

(1) Weighted avg .exercise price $1.20 CAD (2) Weighted avg. exercise price $1.76 (3) As of April 30 2012 (4) As of April 26, 2012 (5) Issued and 123.2 M outstanding shares+ in the money warrants and options (6) As of April 30, 2012

8% 9%

8%

8%

18% 22%

27%

South American Silver Investor Breakdown

Management

Asian Technology Groups

Zamin Private Equity

Izurium Private Equity

Private Investors

Institutional

Retail

Adding Value Through Resource Growth

9

Total resources for both Malku Khota and Escalones 1) Ag Eq calculated using total contained metal for silver ($22/oz) and gold ($1200/oz) only 2) Total combined tonnes of indium and gallium 3) Cu Eq calculated using total contained metal for copper ($3/lb), lead ($0.90/lb), zinc ($0.90/lb), and molybdenum ($16/lb) only

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In & Ga Inferred Resource (In+Ga only)

In & Ga M&I Resource (In+Ga only)

Ag Eq Inferred Resource (Ag+Au only)

Ag Eq M&I Resource (Ag+Au only)

Cu Eq M&I Resource (Cu+Pb+Zn only)

Cu Eq Inferred Resource (Cu+Pb+Zn only)

IPO $20 M

Ag Moz In+Ga tonnes

6000

4500

3000

1500

Cu Mlbs

Total resources with value shown relative to silver

$3 M Financing

$36 M Financing

2 Oz Ag Eq/share

4 Oz Ag Eq/share

8 Oz Ag Eq/share

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Silvercrest US Gold Sulliden MAG Silver Orko GoldenMinerals

Wildcat TahoeResources

So.AmericanSilver

Levon Bear Creek

M&I Resources

Inferred Resources

Comparative Silver Resources in the Americas

10 Source: BMO Capital Markets,Canaccord and Intierra, for silver only Note: All companies have projects in South and/or North America

One of the largest development stage silver resources M

illio

ns o

f Silv

er O

unce

s

Additional value of Indium and Gallium

location Mexico Mexico Peru Mexico MexicoMexico

PeruMexico Guatemala Bolivia /Chile Mexico Peru

Avg Mine Grade (g/t)

89.5 65 13 538 125 182 72 383 58 19 38

Mining Method OP/UG OP OP UG OP/UG UG OP UGOpen Pit

Heap LeachOP OP

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

So.AmericanSilver

Golden Minerals Orko Tahoe Resources MAG Silver Aurcana InternationalMinerals

US Silver Corp

Enterprise Value per Silver Resource Oz

11

By project development stage

Source: Canaccord and Intierra, Share prices as of March 22 2012 Note: All companies have projects in South and/or North America as shown on slide 11

Development Stage Average ~$2/oz

Advanced Development Stage Average ~$4/oz

EV of >$0.64 based on 230.3 million M&I oz Ag

South American

Silver Corp.

12

Increasing value with project advancement Discovery

Resource Definition

PEA

PFS

FS Permits

Construct

Production

Increased value through resource

expansion

2x-5x potential Increase in Market cap

Take-Over offers or Partnerships common

at this stage

2x-3x potential Increase in Market cap

Early Stage Exploration & Development

Advanced Development Stage

(Reserves)

Production

Escalones Project

Malku Khota Project

$2/oz

$4/oz

$9/oz

Average Enterprise Value per Oz of Silver by Stage

Incr

easi

ng M

arke

t Val

ue

Source: Recent average enterprise value per ounce of silver at various development stages for North and South American-based projects. Canaccord, BMO Capital markets and Intierra

Development Stage Value Curve Potential value growth with project advancement

Arian Extorre

Golden Predator

Orko

Tahoe

Bear Creek

Silver Crest

Silvermex

Troy

MAG

Alexco

Allied Nevada

Coeur d'Alene

Endeavour

First Majestic

Great Panther

Hecla Hochschild

Pan American Silver

Silver Standard

10

100

1000

$50 $500 $5,000

Tota

l Res

ourc

e S

ize

(Moz

's)

Enterprise Value (US$ Millions)

Total Resource Ag Equivalent using (Ag +Au only at $25/oz and $1000/oz values) Source: Canaccord and Intierra, Share prices as of May09 2012 Note: All companies have projects in South and/or North America

Current Silver Company Market Valuations by Resource Size & Development Stage

13

Size of circle represents market valuation premium in EV/oz

500

$2,000

Developers Adv. Developers Producers

$1,000 $100 $200 $300

MK MK MK

2012 PFS/FS

2011 PEA

South American Silver Malku Khota

Current Value Production

MK Value at Avg Valuation for each development stage

Positive Silver Fundamentals

14

A paradigm shift for silver? • Major shift in supply/demand dynamic over past several years

• Silver still well below inflation adjusted highs of $140/oz ($50 in 1980)

• Silver is a “hybrid” precious and industrial metal due to its scarcity and unique properties including superior electrical and thermal conductivity, malleability, reflectance, and catalytic/biologic reactivity

• High levels of investment demand and industrial/technology demand continued in 2011

• Total annual mine production grew only 1.4% last year with a drop in primary silver production and reduced contribution of by-product silver from copper mining

• Projected mine supply based on planned projects and declining production from many existing mines anticipated to move into future shortfall vs consumption for technology and other industrial use over the next several years

• Few major new deposit discoveries and growing time lag from time of discovery to metal production are significant constraints to new supply

Source: 1) GFMS World Silver Survey 2012 2) Byron Capital Markets Equity Research February 2012

Silver Supply/Demand Fundamentals

15

• 8 of the top 15 silver producers declined in production in 2011 vs. 2010(1)

• Top two Ag producers dropped by 11 million ounces with global production up only 1.4% • Demand growth expected to continue to outstrip production growth(2)

Source: 1) GFMS World Silver Survey 2012 2) BMO Capital Markets Global Mining Research April 2011

Investment demand

Industrial demand

+1.4% mine production

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World Silver Supply

Mine production

Secondary Supply and Scrap

Government Sales

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World Silver Demand Industrial Applications

Photography

Jewelry and Silverware

Investment and Coins

Growing Demand for Silver in Technology

16

Breakdown of key technology/industrial uses for silver

Source: CPM Silver Yearbook 2010

Mill

ions

of S

ilver

Oz

0

100

200

300

400

500

77 79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09 11p

Photovoltaic

Catalysts, alloys, solders and biocides

Electronics

20 Moz/yr Avg technology Ag consumption increase

over last 10 years

Silver Primary & By-Product Production(1)

17

• 70% of silver is by-product production from base metals and gold • By-product silver production is largely silver price inelastic • Reduced by-product silver production anticipated going forward from base metals(2)

Source: 1) GFMS World Silver Survey 2005-2012 2) BMO Capital Markets Global Mining Research April 2011

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Copper Gold

Silver Price

Indium & Gallium – Two Key Strategic Metals

18

Rapidly growing market for high-tech uses Uses • Indium-tin oxide (ITO) a key component of flat panel displays (FPDs) and touch screens • High-efficiency CIGS (copper, indium, gallium, selenide) photo-voltaic thin-film solar

panels, and LED lighting • Fiber optics, specialized and transparent semiconductors Supply • 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

*

* Image from http://gotpowered.com

flat panel displays LED lighting thin film solar

Indium & Gallium Fundamentals

19

Compelling supply/demand dynamics

Indium and Gallium Supply/Demand dynamics • Indium and gallium highlighted in UN and US DOE studies as a critical technology

metals in potential shortage, along with several key rare earth metals, due to rapidly increasing growth, low recycling rates and low primary production

• Mainland China is estimated to control 60-70% of the global indium market through mining and as a by-product of smelting zinc

• China is the largest consumer of indium and has imposed export quotas and tariffs like on other key high-technology specialty metals such as heavy rare earths

• Indium market estimated to see 15-20% annual growth with most indium produced as by product of zinc refining growing at 1-3% annually

• Current indium and gallium price ~$600-700/kg up from global economic lows during 2008-2009 of $400-500/kg

• Gallium market estimated to be a conservative 15% annual growth rate which could increase significantly with more rapid growth in LED lighting and photovoltaics

Malku Khota annual indium and gallium production • Malku Khota projected to be one of the world’s largest indium & gallium producers

(80 tonnes and 15 tonnes per year) • Potential to represent 10% or more of global mine supply of indium and over 5% of

global supply for gallium • Opportunities for project financing from off-take agreements for indium & gallium

Sources: (1) US Dept. of Energy Critical Materials Strategy, Dec. 2010. (2)United Nations Environment Programme (UNEP) Special Report on Strategic Metals ,May 2011 .

Indium Supply

20

Mine production by country

USGS Mineral Commodity Summaries, January 2012 Roskill Indium report 2010 Other company reports 2011

Tonn

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ium

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Mexico USA Australia Canada Peru Bolivia China

Mainland China estimated to control 60-70% of the global indium market through mining and smelting

• Bolivia is the second largest producer of indium outside of mainland China • 60% of Indium consumption in 2011 from Japan

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

Solar Energy

LED Lighting

LCD Flat Panels

Indium Demand Growth

21

Growing 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 December 2010

End-

use

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(tonn

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production level

5 year projected demand growth

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Price

Indium Fundamentals World indium demand vs price (1969-2011*)

Source: (1) Indium: Global Industry Markets and Outlook, 9th Edition 2010 (Roskill) *2011-2013 Data are estimates (2) 2011-2015 Estimates US Dept. Of Energy Critical Materials Strategy Dec. 2010. 16

Indi

um D

eman

d Indium

Price/kg ($US)

X

Recent Indium Price

US Dept of Energy Projections

Silver and Indium Mining in Bolivia

23

One of the world’s premier silver and indium mining districts • One of the world’s largest historical producing

regions with billions of ounces silver • Highly prospective & under-explored relative

to other parts of the Andean region

• 8 major mines since 2005: Glencore/Xtrata – Sinchi Wayra Mines 2005

• 5 mines – Comibol JV’s and 100% private Sumitomo - San Cristobal Mine 2007

• 100% Sumitomo private ownership • World’s 3rd largest silver mine (19.4 Moz/yr),

6th largest zinc mine with significant indium Coeur D’Alene - San Bartolome 2008

• JV with State Mining Company Comibol • CDE’s second largest mine at 7.5 Moz/yr

Pan American Silver – San Vicente 2009 • 50%-50% JV with Comibol • 4th largest mine for PAAS at 3.1 Moz/yr

South American Silver – Malku Khota • 100% SAC private ownership • Positioned to be next major mine in Bolivia

Sources: Company reports and CPM 2011 Silver Yearbook

Porco Glencore/Xtrata

Bolivar Glencore/Xtrata

Poopo Glencore/Xtrata

Coliquiri Glencore/Xtrata

Malku Khota Project

24

One of the world’s largest silver-indium resources

1) Average for the first 5 years of production 2) See March 31, 2011 News Release for detailed resource estimate 3) Total contained metal using base case prices (Ag: $18/oz, In: $500/kg,

Ga: $500/kg, Cu: $3/lb, Pb: $0.90/lb, Zn: $0.90/lb USD) 4) Economic cut-off grade comprised only of silver and indium

Silver (Moz)

Indium (tonnes)

Gallium (tonnes)

Copper (MLbs)

Lead (MLbs)

Zinc (MLbs)

AgEq3

(Moz)

M&I 230 1,481 1,082 120 453 247 354 Inferred 140 935 1,001 102 362 246 240

Malku Khota Project – 2011 Resource Estimate2

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

Average grade first five years: • Silver: 42.2 g/t (58 g/t Ag Eq)1 • Indium: 7.55 g/t • Economic cut-off grade <15 g/t (at $18/oz Ag)2, 4

Malku Khota Project

25

Low projected capital and operating costs with established infrastructure • 50 square km, 100% owned, road accessible project • Low capital and operating costs on a per ounce basis • Potential to be one of the top primary silver and indium producing mines at 13.2 Moz

silver per year and 80 tonnes of indium1 • Project base case annual cash flows and NPV’s more than doubled • Open pit, bulk mineable and very scalable • Commercial electricity and natural gas nearby

1) Average for the first 5 years of production

Malku Khota Drilling

26

Grade thickness map

• 115 drill holes in current resource with updated resource 2011

• Updated resource results increase total Measured and Indicated oz to 230 Moz Ag (a 60% increase in M&I oz) plus an additional 140 M inferred Ag oz

• 2012 program to target conversion of in

pit inferred resources to M&I resources and & test lateral and depth expansion

• Wide zones of disseminated, sediment hosted mineralization begins at surface with 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


Mineralized Sandstones

OPEN

OPEN

OPEN

Malku Khota Mineralization

27

• Broad zones of continuous sediment hosted mineralization • Open at depth and along trend

LMD048: 286 meters grading 76 g/t AgEq Grade thickness values of over 21,500 g-m AgEq


OPEN

OPEN

Production Processes

28

From ore to metal

• Large scale shovel and truck open pit mine

• Oxide ore crushed in preparation for direct leaching

• Four years of confirmatory metallurgical test work with SGS labs on acid leach process

• Acid-chloride leaching captures silver, indium, copper, lead, zinc, gallium and gold

• Metal recovery in several steps: • Acid recovery • Silver-gold-copper cementation • Indium-gallium precipitation • Lead and zinc sulfides

• Downstream processing to metal products


Crushing

Leaching

Metal Recovery & Processing

Open Pit Mining

Silver, Gold, Copper

Indium & Gallium ingots

Lead & Zinc concentrates

Malku Khota Economic Assessment, May 20111

29

(1)In US dollars (2)LOM = Life of Mine (3)First 5 years of production (avg/yr)

Development Capex Mining Rate Life of Mine Ore Mined (LOM)2

Average Silver Grade 3

Average Indium Grade3

Ag Eq grade

158 M 1,184 191 M 135 M 88 M 212,962

10.5 M 78.9 12.7 M 9 M 5.87 M 14,198 Base Case

$185 M/yr $1,261 M $704 M 37.7% 27 months

$287 M/yr $2,528 M $1482 M 63% 19 months

Mid Case

Total LOM

Annual

$411 million 40,000 tpd Heap Leach 15 years 200 M tonnes 42.4 g/t 7.55 g/t 58 g/t

First 5 years

Recent $430 M/yr $4,298 M $2571 M 92.9% 15 months

Metal Prices ($US)4

Base Case (3 yr avg)

Silver : $18/oz Indium : $500/kg Gallium: $500/kg

$25/oz $570/kg $570/kg

Mid Case (2 yr avg)

Recent (1 yr avg)

$35/oz $650/kg $730/kg

13.2 M 80.7 12.48 M 4.42 M 5.64 M 15,184

71%

15%

6% 5% 3%

Share of Gross Revenue (at base case prices)

Silver

Indium &GalliumCopper

Lead

Zinc

First 5 years cash flow Net cash flow NPV (5% discount rate)1

Internal Rate of Return Payback period (years)

Recovered Metals Silver (oz) Indium (tonnes) Lead (lbs) Zinc (lbs) Copper (lbs) Gallium (kgs)

(4) Base Case: 3 yr avg prices as of May 2011 Mid Case: 2 yr avg prices as of May 2011 Recent Case: 1 yr avg prices as of May 2011

Updated Economic Assessment Anticipated June 2012

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Primary Silver Project Annual Production Rates

30 Source: CPM Silver Yearbook 2011 *Based on mine production of 13.2 Moz /year for first five years

Malku Khota one of largest emerging producers at over 13 Moz/yr

Producing Mine

Development Stage Project

BHP

Billit

on

Fres

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Barr

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Sum

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Target to increase production to 18-20 Moz

Global Silver Industry Cash Cost Curve

31

High quality long-life, low-cost silver production Cumulative Percentile of Silver Mine Production Cost Total C

ash Cost Per O

unce of Silver

Industry Average Cash Cost $7.25/oz

Malku Khota Estimated Production Cost

Source: GFMS World Silver Survey 2012 (1) Avg first 5 years of production (2) Silver cash costs after credits ($US)/oz (3) 3 year average price: Ag $18, In $500, Ga $500, Cu $3, Pb $0.90, Zn $0.90 2 year average price: Ag $25, In $570, Ga $570, Cu $3.70, Pb $1, Zn $1 1 year average price: Ag $35, In $650, Ga $730, Cu $4.30, Pb $1.20, Zn $1.10 , all as of May 2011

Lowest 25% Percentile Cash Costs

Escalones Copper-Gold-Silver project, Chile

32

High potential, large-scale target

Inferred Copper (%)

Gold (g/t)

Silver (g/t)

Moly (ppm)

Cu Eq (%)

Copper (Mlbs)

Gold (Ozs)

Silver (Mozs)

Moly (Mlbs)

Cu Eq1

(Mlbs) Tonnes

420 M 0.41 0.05 1.24 61.39 0.49 3,835 610,000 16.8 56.9 4,503

• 70 square km, road accessible, large scale system in well established mining district

• Located near one of the worlds largest underground copper mines at El Teniente

• Inferred Resource of 3.8 billion lbs of copper, 56.9 million lbs of molybdenum, 610,000 ozs of gold and 16.8 million ozs of silver

• Phase II exploration program underway

1) Cu Eq calculated using total contained metal at $3.00/lb Cu, $1200/oz Au, $22/oz Ag, and $16/lb Mo and has not been adjusted for metallurgical recoveries

Escalones Project Logistics

33

Ownership: 100% through lease Location: 35km E of El Teniente Elevation: 3800m • 70 square kilometer property

• Road accessible located 100 km southeast of Santiago

• Gas pipeline across property

Excellent existing infrastructure

SAC property Gas pipeline Access Road

31 TSX:SAC US OTC:SOHAF

Drill Results Grade Thickness Map

34

Large-scale copper-gold-silver system • Open to expansion down dip

and laterally • 30 diamond drill holes

(12,666 meters) and 43 channel and road cuts (>2,100 meters) with >10,934 assay values collected through 2011

• Limited testing of porphyry system with most holes in replacement /skarn style mineralization

TSX:SAC US OTC:SOHAF 32

CuEq GT AuEq GT Copper (%) x Thickness (m) Gold (g/t) x Thickness (m)

0 – 10 CuEq% GT 10 – 50 CuEq% GT

50 – 100 CuEq% GT

100 – 200 CuEq% GT

>= 200 CuEq% GT

0 – 17 AuEq GT 17 – 85 AuEq GT

85 – 171 AuEq GT

171 – 342 AuEq GT

>= 342 AuEq GT

Metal Prices

Copper - $1/lb Gold - $1000/oz Silver - $15/oz Moly - $15/lb

Pending 2012 Holes

Escalones

35

Geological cross-section • Enriched zones with high grades of replacement style mineralization starting at surface

at over >1% copper with significant gold and silver

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


Alto Bajo

Capstone

Copper Mountain

Imperial

Quadra FNX

Augusta

Candente

Copper Fox

Nevada

Taseko

Hana

Lumina NGEx

Northern Dynasty

Panoro

Redhawk

Western Copper

1000

10000

100000

$50 $500

Tota

l Res

ourc

e S

ize

(Mlb

s C

u)

Enterprise Value (US$ Millions)

36

Current Copper Company Market Valuations by Resource Size & Development Stage Size of circle represents market valuation premium in EV/lb

Developers Adv. Developers Producers

Escalones Current Stage

$100

2.1 cents/lb Avg Value 2.7 cents/lb 10.4 cents/lb

PFS/FS

Production

Escalones Value at Avg Valuation for each development stage

$300 $1000 $2000

ESC ESC ESC

Source: Canaccord Report Jan 2012 using Cu Eq

Project Milestones

37

Value drivers over the next 6-12 months

• Malku Khota, silver-indium-gallium project, Bolivia Updated resource estimate & PEA more than doubles annual production to

13.2 M oz of silver, 80.7 tonnes of indium and 15 tonnes of gallium per year* Cash flows, project valuations and rates of return significantly expanded over

previous studies Exploration program underway to support a planned 20,000 meters of in-fill

and expansion drilling • Updated Economic Assessment in Q2 2012 • Feasibility work to begin in H2 2012

• Escalones, copper-gold-silver porphyry project, Chile Phase I exploration and geophysics program completed Initial resource estimate completed Phase II exploration program underway to support a planned 7,000 meters of

drilling • Resource update mid-2012 • Preliminary Economic Assessment in Q4 2012

*Average first five years of production

0

10

20

30

40

50

60

70

Silver ETF Alexco TahoeResources

Sulliden MAG Silver Orko Silvercrest GoldenMinerals

SilverStandard

Bear Creek So.AmericanSilver

Leveraged to Silver

38

Value of silver per dollar invested

SAC has some of the best leverage to silver of any development stage company with over $65 of silver value per $1 invested

Source: Canaccord as of January 24, 2012, Share prices updated Feb 2 2012 Note: all companies have projects in South and/or North America Calculated using $25/oz Ag. Dollar value of silver per $1 invested = (silver resource/shares outstanding) x $25/oz silver) divided by share price Value only shown for silver with no contribution from other metals. Cu value calculated using $2.25

Silver value per $1 invested

Average value of silver ~$16 of silver per $1 invested*

Additional value of Indium and Gallium

South American Silver Corp.

Additional value of Copper

Why South American Silver?

39

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

• More than $230 worth of metal in the ground per share (>$100 of silver, >$100 of copper, and >$30 of indium and gallium)1

• Attractive investment value relative to peers at low value per oz

• Exposure to rapidly growing indium and gallium high-technology market

• New copper-gold-silver resource and expansion at Escalones

• Continued investor outreach to broaden market awareness of Company

37 1) $25 /oz silver, $3 /lb copper, $700/kg indium and gallium

40

TSX: SAC OTC: SOHAF

Phone: 604.681.6926 1.855.681.6926

www.soamsilver.com Appendix


Emerging Opportunity for Mining in Bolivia

41

Economic Trends • World Bank/IMF supportive of economic policy

changes resulting in one of the fastest growing economies in South America over past 3 years

• Bolivia has joined the Mercosur trade organization with Brazil as largest regional trading partner

• Political relations with U.S. have been normalized • Moody’s & Fitch sovereign bond ratings upgraded • Strong emphasis by government on poverty

reduction, through economic development, and anti-corruption

S

Foreign investment highlights • Kores of S.Korea to invest in Corocoro copper

project • Recent announced investments by Citic of China

and LG/Posco of S.Korea to develop major lithium projects

• Petrobras of Brazil—Latin America’s largest publicly traded oil company – investing US$1B of new capital into the Bolivian gas fields

• Repsol of Spain investing $1.6 billion to increase gas production in Bolivia

• Petrobras and Repsol announced new exploration initiatives in Bolivia in early 2011

Bolivia’s emerging resource based economy • Three major silver mines built within last five

years by Pan American Silver, Coeur D’Alene and Sumitomo

• Planned $32 billion 5-7 year infrastructure build-out by Bolivian government to support resource industry

• One of the world’s premier silver districts with billions of ounces of silver production

• Mining second largest economic sector * Chart source: IMF Western Hemisphere Report Fall 2011

0.0

1.0

2.0

3.0

4.0

5.0

6.0GDP % Output Growth 3yr avg

42

Resource Summary

Mineral resources in the above table were estimated as of March 30, 2011 for the Preliminary Economic Assessment Update Technical Report for Malku Khota by Allan Armitage, Ph.D., P.Geo, of GeoVector Management Inc. 1) The resource cut-off grade of 10 g/t silver equivalent is based only on the values of silver at $16/oz and indium at $550/kg. 2) The silver equivalent calculation uses base case metal pricing ( Ag at $18/oz, In at $500/kg , Ga at $500/kg, Cu at $3/lb, Pb at $0.90/lb, and Zn at $0.90).

Mineral resources in the above table are as reported in the Dec 19 2011 Press Release using estimates prepared by Allan Armitage, Ph.D., P.Geo, and J. Campbell, BSc, PGeo of GeoVector Management Inc. 3) An economic cut-off grade of 0.2% copper equivalent represents a metal price of approximately $2.50/lb copper. 4) Copper Equivalent (Cu Eq %) calculations use $3.00/lb Cu, $1200/oz Au, $22/oz Ag, and $16/lb Mo and have not been adjusted for metallurgical recoveries

5) Ag Eq is calculated using total silver and gold contained metals at $1200/oz Au and $22/oz Ag 6) Cu Eq is calculated using total Cu, Pb, Zn, and Mo contained metals at $3/lb (Cu), $0.90/lb (Pb), $0.90/lb (Zn) and $16/lb (Mo).

MALKU KHOTA In Situ Grade Total Contained Metal

Approx. 10 g/t Ag Cutoff1 Ag In Ga Cu Pb Zn Ag Eq2 Ag In Ga Cu Pb Zn Ag Eq2

Resource Tonnes g/t g/t g/t % % % g/t Moz tonnes tonnes Mlbs Mlbs Mlbs Moz Category Millions

Measured 31.0 33.40 6.10 4.50 0.02 0.07 0.02 49.00 33.32 188.00 139.0 13.9 49 16 48.55

Indicated 224.0 27.30 5.80 4.30 0.02 0.07 0.05 43.20 196.96 1,293.00 943.0 106.4 405 231 311.45

Total M&I 255.0 28.10 5.80 4.30 0.02 0.07 0.04 43.77 230.28 1,481.00 1,082.0 120.3 453 247 358.80

Inferred 230.0 18.90 4.1 4.3 0.02 0.07 0.05 33.04 140.03 935 1,001 102 362 246 244.36

ESCALONES In Situ Grade Total Contained Metal Approx. 0.2% Cu Cutoff3 Cu Au Ag Mo Cu Eq4 Cu Au Ag Mo Cu Eq4

Resource Tonnes % g/t g/t ppm % Mlbs Ozs Moz Mlbs Mlbs Category Millions

Inferred 420.6 0.41 0.05 1.24 61.39 0.49 3,835 610,160 16.8 56.9 4,503

TOTAL RESOURCES Total Contained Metal - Malku Khota and Escalones Combined Ag Au Ag Eq5 In Ga In + Ga Cu Pb Zn Moly Cu Eq6

Resource Moz Kozs Moz tonnes tonnes tonnes Mlbs Mlbs Mlbs Mlbs Mlbs Category M&I 230.28 230.3 1,481.00 1,082.0 2,563.0 120.3 453 247 330 Inferred 156.83 610.16 190.11 935.00 1001.00 1936.00 3937.02 362.16 246.15 56.87 4,423

43


Relative Stock Performance SAC vs. key silver & gold indices

Silver price peak Producer and Explorer/Developer Equities Peak December 2010

Silver Producers peak

SAC

Gold Price Peak

Correction in Explorer/Developers Accelerates into the end of the year

44


Relative performance of Gold/Silver and the Producer/Development stage equity indices

Silver price peak

Gold Price Peak

Correction in Explorer/Developers Accelerates into the end of the year

Producer and Explorer/Developer Equities Peak December 2010

Explorer/Developers and Producer Equities undervalued relative to metals

Historically, metals and miners move together

Potential value gain to equities to catch up with metals prices

Long Term Silver Ratios with Copper & Gold

45

Traditional benchmarks being challenged

Source: 1) Ian McAvity’s Deliberations On World Markets, May 4 2011

Silver showing relative strength

Criticality Index for Clean Energy/Technology Development

46

Showing Forecast Supply Shortages of Most Important Metals

Sources: (1) US Dept. of Energy Critical Materials Strategy, Dec. 2010.

Dy

Ga Ce La Te

In Eu

Nd Tb Y

Li Co Pr

Sm

Nd Dy

Ga In Li Te

Eu Y Tb

Ce Co La Pr

Sm

Short Term (0-5 Years) Long Term (5-15 Years)

4

3

2

1

4

3

2

1

1 2 3 4

Impo

rtanc

e

to c

lean

ene

rgy

Impo

rtanc

e

to c

lean

ene

rgy

1 2 3 4

low

low

high

high

Supply Risk Supply Risk low low high high

Important Near Critical Critical

Management


Greg Johnson - President &CEO & Director

25 years mining industry experience in corporate finance, project development and exploration. Co-founder of NovaGold; played a key role in growing that company from $50 million in value to over $2 billion market capitalization, advanced 3 major projects through to Feasibility.

Ralph Fitch -Executive Chairman Explorationist with Over 40 years of global experience, a co-founder of South American Silver Former Chief Geologist for Chevron Minerals. Several major discoveries in South America

Phillip Brodie-Hall -Chief Operating Officer

Over 35 years experience in engineering construction and project development. He has participated in nearly every aspect of evaluation, feasibility studies and project development in the mining industry.

William Filtness -Chief Financial Officer Chartered Accountant with over 20 years of financial experience in the mining industry.

David Dreisinger -Vice President of Metallurgy

Professor and Industrial Research Chair in Hydrometallurgy at the University of British Columbia. He is actively involved in developing and commercializing hydrometallurgical process at a number of mines worldwide.

Felipe Malbran - Vice President of Exploration

Over 25 years experience in exploration management in South America including key roles in the discovery of Malku Khota, Vizcachitas, and Escalones.

James Mallory -Vice President of Operations & Social Responsibility

Over 30 years of mining industry experience in large-scale mine management, operations and construction for companies including Barrick (Placer Dome), Silver Standard, and NovaGold.

Andrew Clark -Manager of Project Implementation

Over 30 years global industry experience in the development, design, management and construction of industrial mining projects.

Richard Doran -Vice President & Corporate Secretary

Extensive industry experience including with General Minerals and as Marketing Manager for Chevron Minerals.

Xavier Gonzales Yutronic -General Manager Compañía Minera Malku Khota S.A.

Experience in management, finance, and community relations in the mining industry including with Glencore, and Comsur S.A.

Directors


Ralph Fitch - Executive Chairman Explorationist with Over 40 years of global experience, a co-founder of South American Silver Former Chief Geologist for Chevron Minerals. Several major discoveries in South America

Antonio Canton Consultant and director to a number of international companies in marketing, finance and real estate.

Paul Haber Chartered Accountant and a Certified Public Accountant, and previously CFO of a TSX-V company and Chairman of the Audit Committee for South American Silver.

Peter Harris Mining engineer with over 40 years of industry experience including construction and operation of over 20 mines around the world with groups such as Barrick (Placer Dome) and NovaGold.

Greg Johnson – President & CEO 25 years mining industry experience in corporate finance, project development and exploration. Co-founder of NovaGold; played a key role in growing that company from $50 million in value to over $2 billion market capitalization, advanced 3 major projects through to Feasibility.

William Murray Engineer in the mining industry with over 35 years of experience in construction management and project evaluation with groups including Fluor Daniel, Denison Mines, Optimum Project Services and Anglo American Corp.

John Watson President of a TSX -V listed company and Manager of a limited liability corporation in commercial real-estate.

Tina Woodside Head of Gowlings’ corporate finance department and practices corporate and securities law focused on corporate finance, M&A and corporate governance matters.

SAC May Presentation 2012

Business

Transcript of SAC May Presentation 2012