Silvercorp Metals Inc. (“Silvercorp” or the
“Company”) (TSX/NYSE American: SVM) reported its financial and
operating results for the first quarter ended June 30, 2019 (“Q1
Fiscal 2020”). All amounts are expressed in US Dollars.
Q1 FISCAL YEAR 2020
HIGHLIGHTS
- Ore production up 9% compared to the prior year quarter;
- Silver produced and sold up 27% to approximately 1.9 million
ounces, gold produced and sold up 43% to 1,000 ounces, lead
produced and sold up 20% to 17.8 million pounds, and zinc produced
and sold up 15% to 7.3 million pounds, compared to the prior year
quarter;
- Revenue up 1% to $45.6 million compared to $45.1 million in the
prior year quarter, primarily due to the increase in metals sold
and offset by 6% decrease in silver, 25% decrease in lead, and 40%
decrease in zinc realized selling prices;
- Net income attributable to equity shareholders of $12.6
million, or $0.07 per share, compared to $10.9 million or $0.06 per
share in the prior year quarter;
- Cash production cost per tonne of ore processed1 of $68.85,
compared to $69.05 in the prior year quarter;
- Cash cost per ounce of silver1, net of by-product credits, of
negative $2.17, compared to negative $7.54 in the prior year
quarter;
- All-in sustaining cost per ounce of silver1, net of by-product
credits, of $5.69, compared to $0.41 in the prior year
quarter;
- Cash flow from operations of $19.9 million, compared to $21.1
million in the prior year quarter;
- Paid dividend of $2.1 million, or $0.0125 per share, to equity
shareholders; and,
- Strong balance sheet with $121.0 million in cash and cash
equivalents and short-term investments, an increase of $5.7 million
or 5% compared to March 31, 2019.
1 Non-IFRS measure. Please refer to section 10 of the
corresponding MD&A for reconciliation.
FINANCIALS
Net income attributable to equity
shareholders of the Company in Q1 Fiscal 2020 was $12.6
million, or $0.07 per share, compared to $10.9 million, or $0.06
per share in the three months ended June 30, 2018 (“Q1 Fiscal
2019”).
In Q1 Fiscal 2020, the Company’s financial
results were mainly impacted by the following: i) an increase of
27%, 20%, and 15% in amount of silver, lead, and zinc metals
sold, respectively; offset by ii) a decrease of 6%, 25% and 40% in
the net realized selling price for silver, lead and
zinc.
Sales in Q1 Fiscal 2020 were
$45.6 million, up 1% compared to $45.1 million in the prior year
quarter. Silver, gold and base metal sales represented $23.6
million, $1.1 million, and $20.9 million, respectively, compared to
silver, gold and base metals sales of $19.8 million, $0.7 million,
and $24.6 million, respectively, in the prior year quarter. The
increase of volume of metals sold resulted in an increase of
approximately $8.9 million in revenue, while the decrease of net
realized selling prices resulted in a decrease of approximately
$8.4 million in revenue in the current quarter.
Cost of sales in Q1 Fiscal 2020
was $25.1 million compared to $20.3 million in Q1 Fiscal
2019. The cost of sales included $18.0 million cash
production costs (Q1 Fiscal 2019 - $14.3 million), $1.3 million
mineral resources tax (Q1 Fiscal 2019 - $1.2 million), and $5.9
million depreciation and amortization charges (Q1 Fiscal 2019 -
$4.7 million). The increases in cash production costs and
depreciation and amortization expensed were mainly due to more
metals sold. The increase in mineral resources tax was associated
with the increase in revenue.
Gross profit
margin in Q1 Fiscal 2020 of 45%, compared to 55%
in Q1 Fiscal 2019. Ying Mining District’s gross profit margin was
48% compared to 59% in the prior year quarter, while GC Mine’s
gross profit margin was 31% compared to 39% in the prior year
quarter. The decrease of gross margin was mainly due to the
decrease in metal prices.
General and
administrative expenses in Q1 Fiscal 2020 were
$4.5 million, compared to $4.5 million in Q1 Fiscal 2019.
Income tax recovery in Q1
Fiscal 2020 was $0.5 million compared to an income tax expense of
$6.5 million in Q1 Fiscal 2019. In Q1 Fiscal 2020, the Company
recorded current income tax expenses of $1.8 million (Q1 Fiscal
2019 – $5.9 million), and a deferred income tax recovery of $2.2
million (Q1 Fiscal 2019 – expense of $0.5 million). The deferred
income tax recovery was mainly related to the tax benefit
recognized arising from the disposal of the XHP Project.
Cash flows provided by operating
activities in Q1 Fiscal 2020 were $19.9 million, slightly
lower than the $21.1 million in Q1 Fiscal 2019.
The Company ended the quarter with $121.0
million in cash and cash equivalents and short-term investments, an
increase of $5.7 million or 5% compared to $115.3 million as at
March 31, 2019.
Working capital as at June 30, 2019 was $110.8
million, an increase of $13.8 million or 14%, compared to $96.9
million working capital as at March 31, 2019.
OPERATIONS AND DEVELOPMENT
In Q1 Fiscal 2020, on a consolidated basis, the
Company mined 257,392 tonnes of ore, an increase of 9% compared to
236,697 tonnes in Q1 Fiscal 2019. The increase in ore mined
was mainly due to an increase of 13% or 19,854 tonnes of ore mined
at the Ying Mining District. Correspondingly, ore milled also
increased by 9% to 259,542 tonnes, compared to 237,740 tonnes in Q1
Fiscal 2019.
In Q1 Fiscal 2020, the Company sold 1.9 million
ounces of silver, 1,000 ounces of gold, 17.8 million pounds of
lead, and 7.3 million pounds of zinc, up 27%, 43%, 20%, and 15%,
respectively, compared to 1.5 million ounces of silver, 700 ounces
of gold, 14.9 million pounds of lead, and 6.3 million pounds of
zinc in Q1 Fiscal 2019. As at June 30, 2019, the Company had
inventories of 4,247 tonnes of silver-lead concentrate and 285
tonnes of zinc concentrate, compared to 3,248 tonnes of silver-lead
concentrate and 368 tonnes of zinc concentrate as at March 31,
2019.
In Q1 Fiscal 2020, the consolidated total mining
and cash mining costs were $77.40 and $55.45 per tonne, up 4% and
2% compared to $74.39 and $54.47 per tonne, respectively in Q1
Fiscal 2019. The increase in cash mining costs was mainly due to i)
an overall 3% increase in the mining contractors’ rate when
two-year term mining contracts renewed at the Ying Mining District
in the current quarter, and ii) more ore mined using resuing mining
method at the GC Mine. The consolidated total milling and cash
milling costs in Q1 Fiscal 2020 were $12.49 and $10.63 per tonne,
down by 12% and 9% compared to $14.16 and $11.73 per tonne,
respectively, in Q1 Fiscal 2019.
Correspondingly, the consolidated cash
production cost per tonne of ore processed in Q1 Fiscal 2020 was
$68.85, a slight decrease compared to $69.05 in the prior year
quarter, and below the Company’s Fiscal 2020 annual guidance of
$$71.80.
In Q1 Fiscal 2020, the consolidated cash cost
per ounce of silver, net of by-product credits, was negative $2.17,
compared to negative $7.54, in the prior year quarter. The
increase in cash cost per ounce of silver, net of by-product
credits, was mainly due to a decrease of $5.42 per ounce of silver
in by-product credits resulting from lower by-product metal prices
and more volume of silver sold. The consolidated all-in sustaining
cost per ounce of silver, net of by-product credits, was $5.69
compared to $0.41 in Q1 Fiscal 2019. The increase was mainly
due to i) the increase of cash cost per ounce of silver, net of
by-product credits as discussed above, and ii) a $3.0 million
increase in sustaining capital expenditures.
In Q1 Fiscal 2020, on a consolidated basis,
approximately 31,618 metres or $0.9 million worth of diamond
drilling (Q1 Fiscal 2019 – 34,848 metres or $1.0 million) and
12,656 metres or $3.1 million worth of preparation tunnelling (Q1
Fiscal 2019 – 10,782 metres or $3.2 million) were completed and
expensed as mining preparation costs. In addition, approximately
21,392 metres or $7.4 million worth of horizontal tunnels, raises,
ramps and declines (Q1 Fiscal 2019 – 17,466 metres or $6.5 million)
were completed and capitalized.
1. Ying Mining District, Henan Province,
China
Ying Mining District |
Q1 2020 |
|
Q4 2019 |
|
Q3 2019 |
|
Q2 2019 |
|
Q1 2019 |
|
|
June 30, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
June 30, 2018 |
|
Ore Mined
(tonne) |
176,584 |
|
111,032 |
|
174,152 |
|
180,662 |
|
156,730 |
|
Ore Milled
(tonne) |
177,681 |
|
107,039 |
|
184,684 |
|
172,200 |
|
155,929 |
|
Head
Grades |
|
|
|
|
|
Silver
(gram/tonne) |
330 |
|
324 |
|
296 |
|
308 |
|
323 |
|
Lead
(%) |
4.6 |
|
4.5 |
|
4.1 |
|
4.6 |
|
4.5 |
|
Zinc
(%) |
0.9 |
|
0.9 |
|
0.8 |
|
0.9 |
|
1.1 |
|
Recoveries |
|
|
|
|
|
Silver
(%) |
95.8 |
|
95.5 |
|
95.6 |
|
96.1 |
|
96.0 |
|
Lead
(%) |
95.9 |
|
96.1 |
|
95.2 |
|
95.6 |
|
96.3 |
|
Zinc
(%) |
58.3 |
|
63.7 |
|
50.2 |
|
51.2 |
|
54.5 |
|
Metal
Sales |
|
|
|
|
|
Silver (in thousands of
ounce) |
1,662 |
|
1,141 |
|
1,545 |
|
1,765 |
|
1,313 |
|
Gold (in thousands of
ounce) |
1.0 |
|
0.7 |
|
1.1 |
|
1.0 |
|
0.7 |
|
Lead (in thousands of
pound) |
14,835 |
|
10,310 |
|
15,156 |
|
17,359 |
|
13,313 |
|
Zinc (in thousands of
pound) |
2,090 |
|
2,464 |
|
381 |
|
1,648 |
|
2,133 |
|
Cash mining costs ($ per
tonne) |
63.05 |
|
65.24 |
|
63.04 |
|
58.65 |
|
63.49 |
|
Shipping costs ($ per
tonne) |
4.04 |
|
3.97 |
|
4.27 |
|
4.26 |
|
4.31 |
|
Cash milling costs ($ per
tonne) |
9.15 |
|
12.57 |
|
10.49 |
|
8.54 |
|
10.30 |
|
Cash production costs ($ per
tonne) |
76.24 |
|
81.78 |
|
77.80 |
|
71.45 |
|
78.10 |
|
All-in sustaining production costs
($/tonne) |
129.14 |
|
141.63 |
|
135.47 |
|
108.75 |
|
121.87 |
|
|
|
|
|
|
|
Cash costs per ounce of silver
($) |
(1.44 |
) |
(3.02 |
) |
(1.74 |
) |
(2.80 |
) |
(6.25 |
) |
All-in sustaining costs per ounce of
silver ($) |
4.82 |
|
3.28 |
|
5.80 |
|
1.52 |
|
(0.28 |
) |
|
|
|
|
|
|
In Q1 Fiscal 2020, the total ore mined at the Ying Mining
District was 176,584 tonnes, up 13% compared to 156,730 tonnes
mined in the prior year quarter. Ore milled was 177,681
tonnes, up 14% compared to 155,929 tonnes in Q1 Fiscal
2019.
Head grades were 330 grams per ton (“g/t”) for
silver, 4.6% for lead, and 0.9% for zinc, compared to 323 g/t for
silver, 4.5% for lead, and 1.1% for zinc in the prior year quarter.
The Company continues to achieve improvements in dilution control
using its “Enterprise Blog” to assist and manage daily operations.
In Q1 Fiscal 2020, the Ying Mining District sold
approximately 1.7 million ounces of silver, 14.8 million pounds of
lead, and 2.1 million pounds of zinc, compared to 1.3 million
ounces of silver, 13.3 million pounds of lead, and 2.1 million
pounds of zinc in the prior year quarter. As at June 30, 2019, Ying
Mining District had inventories of 4,208 tonnes of silver-lead
concentrate and 200 tonnes of zinc concentrate, compared to 3,150
tonnes of silver-lead concentrate and 250 tonnes of zinc
concentrate as at March 31, 2019.
Total and cash mining costs per tonne at the
Ying Mining District in Q1 Fiscal 2020 were $91.47 and $63.05 per
tonne, respectively, compared to $89.57 and $63.49 per tonne in the
prior year quarter. The decrease in the per tonne cash mining cost
was mainly due to i) lower per tonne fixed costs allocation
resulting from the increase in ore mined, offset by ii) an overall
3% increase in mining contractors’ rate when the two-year term
mining contracts were renewed in the current quarter.
Total and cash milling costs per tonne at the
Ying Mining District in Q1 Fiscal 2020 were $10.93 and $9.15,
compared to $12.60 and $10.30 in Q1 Fiscal 2019. The decrease of
per tonne milling costs was mainly due to lower per tonne fixed
costs allocation resulting from the increase in ore milled.
Correspondingly, the cash production cost per
tonne of ore processed in Q1 Fiscal 2020 at the Ying Mining
District was $76.24, compared to $78.10 in the prior year
quarter.
Cash cost per ounce of silver, net of by-product
credits, in Q1 Fiscal 2020 at the Ying Mining District, was
negative $1.44 compared to negative $6.25 in the prior year
quarter. The increase was mainly due to a decrease of $4.53 per
ounce of silver in by-product credits resulting from the decrease
in metal prices and more silver sold. All-in sustaining cost
per ounce of silver, net of by-product credits, in Q1 Fiscal 2020
at the Ying Mining District was $4.82 compared to negative $0.28 in
the prior year quarter. The increase was mainly due to higher cash
cost per ounce of silver, net of by-product credits and an increase
of $2.5 million in sustaining capital expenditures.
In Q1 Fiscal 2020, approximately 23,648 metres
or $0.6 million worth of diamond drilling (Q1 Fiscal 2019 – 26,849
metres or $0.6 million) and 6,395 metres or $1.7 million worth of
preparation tunnelling (Q1 Fiscal 2019 – 5,541 metres or $1.6
million) were completed and expensed as mining preparation costs at
the Ying Mining District. In addition, approximately 20,895 metres
or $7.1 million worth of horizontal tunnels, raises, ramps and
declines (Q1 Fiscal 2019 – 16,928 metres or $6.0 million) were
completed and capitalized.
2. GC Mine, Guangdong Province, China
GC Mine |
Q1 2020 |
|
Q4 2019 |
|
Q3 2019 |
|
Q2 2019 |
|
Q1 2019 |
|
|
June 30, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
June 30, 2018 |
|
Ore Mined
(tonne) |
80,808 |
|
50,368 |
|
86,126 |
|
67,757 |
|
79,967 |
|
Ore Milled
(tonne) |
81,861 |
|
52,865 |
|
86,792 |
|
67,528 |
|
81,811 |
|
Head
Grades |
|
|
|
|
|
Silver
(gram/tonne) |
95 |
|
101 |
|
84 |
|
78 |
|
87 |
|
Lead
(%) |
1.9 |
|
1.8 |
|
1.6 |
|
1.4 |
|
1.3 |
|
Zinc
(%) |
3.4 |
|
3.3 |
|
3.1 |
|
2.8 |
|
2.9 |
|
Recovery
Rates |
|
|
|
|
|
Silver
(%) |
76.8 |
|
81.3 |
|
80.5 |
|
76.7 |
|
75.3 |
|
Lead
(%) |
88.7 |
|
91.5 |
|
91.6 |
|
91.2 |
|
87.1 |
|
Zinc
(%) |
85.7 |
|
85.7 |
|
85.5 |
|
83.3 |
|
84.8 |
|
Metal
Sales |
|
|
|
|
|
Silver (in thousands of
ounce) |
193 |
|
173 |
|
167 |
|
136 |
|
150 |
|
Lead (in thousands of
pound) |
3,007 |
|
2,360 |
|
2,644 |
|
2,063 |
|
1,583 |
|
Zinc (in thousands of
pound) |
5,244 |
|
4,874 |
|
3,730 |
|
3,240 |
|
4,244 |
|
Cash mining cost ($ per
tonne) |
38.83 |
|
40.58 |
|
34.17 |
|
41.25 |
|
36.78 |
|
Cash milling cost ($ per
tonne) |
13.85 |
|
18.52 |
|
14.08 |
|
11.45 |
|
14.46 |
|
Cash production cost ($ per
tonne) |
52.68 |
|
59.10 |
|
48.25 |
|
52.70 |
|
51.24 |
|
All-in sustaining production costs
($/tonne) |
67.33 |
|
72.11 |
|
56.88 |
|
67.58 |
|
61.91 |
|
|
|
|
|
|
|
Cash cost per ounce of silver
($) |
(8.38 |
) |
(10.23 |
) |
(12.32 |
) |
(10.81 |
) |
(18.81 |
) |
All-in sustaining cost per ounce of
silver ($) |
(0.96 |
) |
(4.97 |
) |
(6.54 |
) |
(2.03 |
) |
(11.36 |
) |
|
|
|
|
|
|
In Q1 Fiscal 2020, the total ore mined at the GC Mine was 80,808
tonnes compared to 79,967 tonnes in the prior year quarter. Ore
milled was 81,861 tonnes compared to 81,811 tonnes in the prior
year quarter.
Average head grades of ore processed at the GC
Mine were 95 g/t for silver, 1.9% for lead, and 3.4% for zinc,
compared to 87 g/t for silver, 1.3% for lead, and 2.9% for zinc in
the prior year quarter. Recovery rates of ore processed were
76.8% for silver, 88.7% for lead, and 85.7% for zinc, compared to
75.3% for silver, 87.1% for lead, and 84.8% for zinc in Q1 Fiscal
2019.
In Q1 Fiscal 2020, GC Mine sold approximately
193,000 ounces of silver, 3.0 million pounds of lead, and 5.2
million pounds of zinc, compared to 150,000 thousand ounces of
silver, 1.6 million pounds of lead, and 4.2 million pounds of zinc
in the prior year quarter.
Total and cash mining costs per tonne at the GC
Mine in Q1 Fiscal 2020 were $46.64 and $38.83 per tonne, an
increase of 5% and 6% respectively, compared to $44.62 and $36.78
per tonne, respectively, in Q1 Fiscal 2019. The increase in the
cash mining cost was mainly due to an increase of $2.63 per tonne
in mining contractors’ cost resulting from more ore mined using
re-suing mining method. Total and cash milling cost per tonne at
the GC Mine in Q1 Fiscal 2020 were $15.88 and $13.85, a decrease of
7% and 4%, respectively, compared to $17.14 and $14.46,
respectively, in Q1 Fiscal 2019.
Correspondingly, the cash production cost per
tonne of ore processed in Q1 Fiscal 2020 at the GC Mine was $52.68,
an increase of 3% compared to $51.24 in the prior year
quarter.
Cash cost per ounce of silver, net of by-product
credits, at the GC Mine, was negative $8.38 compared to negative
$18.81 in the prior year quarter. The increase was mainly due to a
decrease of $13.61 per ounce of silver in by-product credits
resulting from the decrease in metal prices and more silver sold.
All-in sustaining cost per ounce of silver, net of by-product
credits, in Q1 Fiscal 2020 at the GC Mine was negative $0.96
compared to negative $11.36 in the prior year quarter. The increase
was mainly due to the increase in the cash cost per ounce of
silver, net of by-product credits, as discussed
above.
In Q1 Fiscal 2020, approximately 7,970 metres or
$0.3 million worth of underground diamond drilling (Q1 Fiscal 2019
– 7,999 metres or $0.4 million) and 6,261 metres or $1.4 million
worth of tunnelling (Q1 Fiscal 2019 – 5,241 metres or $1.6 million)
were completed and expensed as mining preparation costs at the GC
Mine. In addition, approximately 497 metres or $0.3 million worth
of horizontal tunnels, raises, ramps and declines (Q1 Fiscal 2019 –
538 metres or $0.5 million) were completed and capitalized.
3. XHP Project, Henan Province, China
In April 2019, Henan Found, the Company’s 77.5%
owned subsidiary, entered into a share transfer agreement (the
“Agreement”) with an arm’s-length private Chinese company to
dispose of the XHP Project. Pursuant to the Agreement, Henan Found
sold its 100% equity interest in SX Gold, the holding company of
the XHP Project, for $7.3 million (RMB ¥50 million), and forgave
the amount of $1.1 million (RMB ¥7.5 million ) SX Gold owes to
Henan Found. The transaction was completed and a gain of $1.5
million was recognized in Q1 Fiscal 2020.
Mr. Guoliang Ma, P.Geo., Manager of Exploration
and Resources of the Company, is the Qualified Person as defined by
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects (“NI 43-101”) and has reviewed and given consent to the
technical information contained in this news release.
This earnings release should be read in
conjunction with the Company's Management Discussion &
Analysis, Financial Statements and Notes to Financial Statements
for the corresponding period, which have been posted on SEDAR under
the Company’s profile at www.sedar.com and are also available
on the Company's website at www.silvercorp.ca.
About Silvercorp
Silvercorp is a profitable Canadian mining
company producing silver, lead and zinc metals in concentrates from
mines in China. The Company’s goal is to continuously create
healthy returns to shareholders through efficient management,
organic growth and the acquisition of profitable projects.
Silvercorp balances profitability, social and environmental
relationships, employees’ wellbeing, and sustainable development.
For more information, please visit our website at
www.silvercorp.ca.
For further information
Silvercorp Metals Inc.Lon Shaver Vice
PresidentPhone: (604) 669-9397Toll Free 1(888) 224-1881Email:
investor@silvercorp.ca Website:
www.silvercorp.ca
CAUTIONARY DISCLAIMER - FORWARD-LOOKING
STATEMENTS
Certain of the statements and information in
this news release constitute “forward-looking statements” within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and “forward-looking information” within the
meaning of applicable Canadian provincial securities laws
(collectively, “forward-looking statements”). Any statements or
information that express or involve discussions with respect to
predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or performance (often, but not always,
using words or phrases such as “expects”, “is expected”,
“anticipates”, “believes”, “plans”, “projects”, “estimates”,
“assumes”, “intends”, “strategies”, “targets”, “goals”,
“forecasts”, “objectives”, “budgets”, “schedules”, “potential” or
variations thereof or stating that certain actions, events or
results “may”, “could”, “would”, “might” or “will” be taken, occur
or be achieved, or the negative of any of these terms and similar
expressions) are not statements of historical fact and may be
forward-looking statements. Forward-looking statements relate
to, among other things: the price of silver and other metals; the
accuracy of mineral resource and mineral reserve estimates at the
Company’s material properties; the sufficiency of the Company’s
capital to finance the Company’s operations; estimates of the
Company’s revenues and capital expenditures; estimated production
from the Company’s mines in the Ying Mining District and the GC
Mine; timing of receipt of permits and regulatory approvals;
availability of funds from production to finance the Company’s
operations; and access to and availability of funding for future
construction, use of proceeds from any financing and development of
the Company’s properties.
Forward-looking statements are subject to a
variety of known and unknown risks, uncertainties and other factors
that could cause actual events or results to differ from those
reflected in the forward-looking statements, including, without
limitation, risks relating to: fluctuating commodity prices;
calculation of resources, reserves and mineralization and precious
and base metal recovery; interpretations and assumptions of mineral
resource and mineral reserve estimates; exploration and development
programs; feasibility and engineering reports; permits and
licences; title to properties; property interests; joint venture
partners; acquisition of commercially mineable mineral rights;
financing; recent market events and conditions; economic factors
affecting the Company; timing, estimated amount, capital and
operating expenditures and economic returns of future production;
integration of future acquisitions into the Company’s existing
operations; competition; operations and political conditions;
regulatory environment in China and Canada; environmental risks;
foreign exchange rate fluctuations; insurance; risks and hazards of
mining operations; key personnel; conflicts of interest; dependence
on management; internal control over financial reporting; and
bringing actions and enforcing judgments under U.S. securities
laws.
This list is not exhaustive of the factors that
may affect any of the Company’s forward-looking statements.
Forward-looking statements are statements about the future and are
inherently uncertain, and actual achievements of the Company or
other future events or conditions may differ materially from those
reflected in the forward-looking statements due to a variety of
risks, uncertainties and other factors, including, without
limitation, those referred to in the Company’s Annual Information
Form under the heading “Risk Factors”. 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, described or
intended. Accordingly, readers should not place undue
reliance on forward-looking statements.
The Company’s forward-looking statements are
based on the assumptions, beliefs, expectations and opinions of
management as of the date of this news release, and other than as
required by applicable securities laws, the Company does not assume
any obligation to update forward-looking statements if
circumstances or management’s assumptions, beliefs, expectations or
opinions should change, or changes in any other events affecting
such statements. For the reasons set forth above, investors should
not place undue reliance on forward-looking statements.
SILVERCORP METALS INC. |
Consolidated Statements of Financial Position |
(Unaudited - Expressed in thousands of U.S. dollars) |
|
|
As at June 30, |
|
|
As at March 31, |
|
|
|
2019 |
|
|
|
2019 |
|
ASSETS |
|
|
|
Current
Assets |
|
|
|
Cash and cash equivalents |
$ |
49,323 |
|
|
$ |
67,441 |
|
Short-term investments |
|
71,712 |
|
|
|
47,836 |
|
Trade and other receivables |
|
3,345 |
|
|
|
467 |
|
Current portion of lease receivable |
|
120 |
|
|
|
- |
|
Inventories |
|
10,409 |
|
|
|
10,836 |
|
Due from a related party |
|
3,022 |
|
|
|
3,022 |
|
Income tax receivable |
|
5,222 |
|
|
|
1,301 |
|
Prepaids and deposits |
|
2,755 |
|
|
|
3,958 |
|
|
|
145,908 |
|
|
|
134,861 |
|
Non-current
Assets |
|
|
|
Long-term prepaids and deposits |
|
567 |
|
|
|
769 |
|
Long-term portion lease receivable |
|
310 |
|
|
|
- |
|
Reclamation deposits |
|
7,781 |
|
|
|
7,953 |
|
Investment in an associate |
|
42,706 |
|
|
|
38,703 |
|
Other investments |
|
10,720 |
|
|
|
9,253 |
|
Plant and equipment |
|
69,323 |
|
|
|
68,617 |
|
Mineral rights and properties |
|
228,386 |
|
|
|
238,920 |
|
TOTAL ASSETS |
$ |
505,701 |
|
|
$ |
499,076 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Current
Liabilities |
|
|
|
Accounts payable and accrued liabilities |
$ |
27,293 |
|
|
$ |
29,856 |
|
Current portion of lease obligation |
|
603 |
|
|
|
- |
|
Bank Loan |
|
- |
|
|
|
4,475 |
|
Deposits received |
|
2,889 |
|
|
|
3,040 |
|
Income tax payable |
|
4,343 |
|
|
|
502 |
|
|
|
35,128 |
|
|
|
37,873 |
|
Non-current
Liabilities |
|
|
|
Long-term portion of lease obligation |
|
2,048 |
|
|
|
- |
|
Deferred income tax liabilities |
|
31,336 |
|
|
|
34,334 |
|
Environmental rehabilitation |
|
13,189 |
|
|
|
13,688 |
|
Total Liabilities |
|
81,701 |
|
|
|
85,895 |
|
|
|
|
|
Equity |
|
|
|
Share capital |
|
231,563 |
|
|
|
231,269 |
|
Share option reserve |
|
16,149 |
|
|
|
15,898 |
|
Reserves |
|
25,409 |
|
|
|
25,409 |
|
Accumulated other comprehensive loss |
|
(44,542 |
) |
|
|
(41,864 |
) |
Retained earnings |
|
126,393 |
|
|
|
116,734 |
|
Total equity
attributable to the equity holders of the Company |
|
354,972 |
|
|
|
347,446 |
|
|
|
|
|
Non-controlling
interests |
|
69,028 |
|
|
|
65,735 |
|
Total Equity |
|
424,000 |
|
|
|
413,181 |
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
$ |
505,701 |
|
|
$ |
499,076 |
|
|
|
|
|
|
SILVERCORP METALS INC. |
Consolidated Statements of Income |
(Unaudited - Expressed in thousands of U.S. dollars, except for per
share figures) |
|
|
Three Months Ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
Sales |
$ |
45,576 |
|
$ |
45,125 |
|
Cost of sales |
|
|
Production costs |
|
18,000 |
|
|
14,277 |
|
Mineral resource taxes |
|
1,251 |
|
|
1,249 |
|
Depreciation and amortization |
|
5,869 |
|
|
4,748 |
|
|
|
25,120 |
|
|
20,274 |
|
Gross profit |
|
20,456 |
|
|
24,851 |
|
|
|
|
General and administrative |
|
4,548 |
|
|
4,472 |
|
Government fees and other taxes |
|
594 |
|
|
802 |
|
Foreign exchange loss (gain) |
|
854 |
|
|
(788 |
) |
Loss on disposal of plant and equipment |
|
142 |
|
|
10 |
|
Gain on disposal of mineral rights and properties |
|
(1,477 |
) |
|
- |
|
Share of loss in associate |
|
281 |
|
|
279 |
|
Dilution gain on investment in associate |
|
(723 |
) |
|
- |
|
Reclassification of other comprehensive loss upon |
|
|
ownership dilution of investment in associate |
|
(21 |
) |
|
- |
|
Other expense (income) |
|
199 |
|
|
63 |
|
Income from operations |
|
16,059 |
|
|
20,013 |
|
|
|
|
Finance income |
|
929 |
|
|
796 |
|
Finance costs |
|
(175 |
) |
|
(134 |
) |
Income before income taxes |
|
16,813 |
|
|
20,675 |
|
|
|
|
Income tax expense |
|
(488 |
) |
|
6,498 |
|
Net income |
$ |
17,301 |
|
$ |
14,177 |
|
|
|
|
Attributable to: |
|
|
Equity holders of the Company |
$ |
12,607 |
|
$ |
10,921 |
|
Non-controlling interests |
|
4,694 |
|
|
3,256 |
|
|
$ |
17,301 |
|
$ |
14,177 |
|
|
|
|
Earnings
per share attributable to the equity holders of the
Company |
|
Basic earnings per share |
$ |
0.07 |
|
$ |
0.07 |
|
Diluted earnings per share |
$ |
0.07 |
|
$ |
0.06 |
|
Weighted Average Number of Shares Outstanding -
Basic |
|
169,991,268 |
|
|
167,263,945 |
|
Weighted Average Number of Shares Outstanding -
Diluted |
|
170,753,967 |
|
|
170,230,705 |
|
|
|
|
|
SILVERCORP METALS INC. |
Consolidated Statements of Cash Flow |
(Unaudited - Expressed in thousands of U.S. dollars) |
|
|
Three Months Ended June 30, |
|
|
|
2019 |
|
|
2018 |
|
Cash provided
by |
|
|
Operating
activities |
|
|
Net income |
$ |
17,301 |
|
$ |
14,177 |
|
Add (deduct) items not affecting cash: |
|
|
Finance costs |
|
175 |
|
|
134 |
|
Depreciation, amortization and depletion |
|
6,220 |
|
|
5,053 |
|
Share of (income) loss in associate |
|
281 |
|
|
279 |
|
Dilution gain on investment in associate |
|
(723 |
) |
|
- |
|
Reclassification of other comprehensive loss upon ownership |
|
dilution of investment in associate |
|
(21 |
) |
|
- |
|
Income tax expense |
|
(488 |
) |
|
6,498 |
|
Finance income |
|
(929 |
) |
|
(796 |
) |
Loss on disposal of plant and equipment |
|
142 |
|
|
10 |
|
Gain on disposal of mineral rights and properties |
|
(1,477 |
) |
|
- |
|
Share-based compensation |
|
325 |
|
|
456 |
|
Reclamation expenditures and deposits |
|
(17 |
) |
|
(4 |
) |
Income taxes paid |
|
(1,919 |
) |
|
(3,088 |
) |
Interest received |
|
929 |
|
|
796 |
|
Interest paid |
|
(73 |
) |
|
- |
|
Changes in non-cash operating working capital |
|
155 |
|
|
(2,367 |
) |
Net cash provided by operating activities |
|
19,881 |
|
|
21,148 |
|
|
|
|
Investing
activities |
|
|
Mineral rights and properties |
|
|
Capital expenditures |
|
(6,770 |
) |
|
(5,729 |
) |
Proceeds on disposals |
|
4,691 |
|
|
- |
|
Plant and equipment |
|
|
Additions |
|
(2,171 |
) |
|
(1,221 |
) |
Proceeds on disposals |
|
1 |
|
|
27 |
|
Other investments |
|
|
Acquisition |
|
- |
|
|
- |
|
Investment in associate |
|
(3,023 |
) |
|
- |
|
Net redemption (purchases) of short-term investments |
|
(24,075 |
) |
|
13,262 |
|
Principal received on lease receivable |
|
27 |
|
|
- |
|
Net cash provided by
(used in) investing activities |
|
(31,320 |
) |
|
6,339 |
|
|
|
|
Financing
activities |
|
|
Bank loan |
|
|
Proceeds |
|
- |
|
|
4,527 |
|
Repayment |
|
(4,369 |
) |
|
- |
|
Principal payments on lease obligation |
|
(101 |
) |
|
- |
|
Non-controlling interests |
|
|
Distribution |
|
- |
|
|
(3,329 |
) |
Cash dividends distributed |
|
(2,125 |
) |
|
(2,095 |
) |
Proceeds from issuance of common shares |
|
220 |
|
|
502 |
|
Net cash used in financing activities |
|
(6,375 |
) |
|
(395 |
) |
Effect of exchange rate changes on cash and cash
equivalents |
|
(304 |
) |
|
(3,422 |
) |
|
|
|
Increase in cash and cash equivalents |
|
(18,118 |
) |
|
23,670 |
|
Cash and cash equivalents, beginning of the
period |
|
67,441 |
|
|
49,199 |
|
Cash and cash equivalents, end of the period |
$ |
49,323 |
|
$ |
72,869 |
|
|
|
|
SILVERCORP
METALS INC. |
Mining Data |
(Expressed in
thousands of U.S. dollars, except for mining data figures) |
|
Consolidated |
Three months ended June
30, |
|
|
2019 |
|
2018 |
|
Changes |
|
|
|
|
|
|
Production
Data |
|
|
|
Mine
Data |
|
|
|
|
Ore Mined
(tonne) |
257,392 |
|
236,697 |
|
9 |
% |
|
Ore Milled
(tonne) |
259,542 |
|
237,740 |
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
Head
Grades |
|
|
|
|
Silver
(gram/tonne) |
254 |
|
242 |
|
5 |
% |
|
Lead
(%) |
3.7 |
|
3.4 |
|
10 |
% |
|
Zinc
(%) |
1.7 |
|
1.7 |
|
0 |
% |
|
|
|
|
|
|
Recovery
Rates |
|
|
|
|
Silver
(%) |
93.5 |
|
93.4 |
|
0 |
% |
|
Lead
(%) |
94.8 |
|
95.1 |
|
0 |
% |
|
Zinc
(%) |
75.7 |
|
72.3 |
|
5 |
% |
|
|
|
|
|
Cost
Data |
|
|
|
+ |
Mining cost per tonne of ore mined
($) |
77.40 |
|
74.39 |
|
4 |
% |
|
Cash mining cost per tonne of ore
mined ($) |
55.45 |
|
54.47 |
|
2 |
% |
|
Depreciation and amoritzation
charges per tonne of ore mined
($) |
21.95 |
|
19.92 |
|
10 |
% |
|
|
|
|
|
+ |
Unit shipping costs
($) |
2.77 |
|
2.85 |
|
-3 |
% |
|
|
|
|
|
+ |
Mining cost per tonne of ore milled
($) |
12.49 |
|
14.16 |
|
-12 |
% |
|
Cash milling cost per tonne of ore
milled ($) |
10.63 |
|
11.73 |
|
-9 |
% |
|
Depreciation and amoritzation
charges per tonne of ore milled
($) |
1.86 |
|
2.43 |
|
-23 |
% |
|
|
|
|
|
+ |
Cash production cost per tonne of
ore processed ($) |
68.85 |
|
69.05 |
|
0 |
% |
+ |
All-in sustaining cost per tonne of
ore processed ($) |
120.16 |
|
112.67 |
|
7 |
% |
|
|
|
|
|
+ |
Cash cost per ounce of Silver, net
of by-product credits ($) |
(2.17 |
) |
(7.54 |
) |
-71 |
% |
+ |
All-in sustaining cost per tonne of
ore processed ($) |
5.69 |
|
0.41 |
|
1288 |
% |
|
|
|
|
|
Concentrate inventory |
|
|
|
|
Lead concentrate
(tonne) |
4,247 |
|
5,650 |
|
-25 |
% |
|
Zinc concentrate
(tonne) |
285 |
|
380 |
|
-25 |
% |
|
|
|
|
|
Sales
Data |
|
|
|
Metal
Sales |
|
|
|
|
Silver (in thousands of
ounces) |
1,855 |
|
1,463 |
|
27 |
% |
|
Gold (in thousands of
ounces) |
1.0 |
|
0.7 |
|
43 |
% |
|
Lead (in thousands of
pounds) |
17,842 |
|
14,896 |
|
20 |
% |
|
Zinc (in thousands of
pounds) |
7,334 |
|
6,377 |
|
15 |
% |
|
|
|
|
|
Revenue |
|
|
|
|
Silver (in thousands of
$) |
23,558 |
|
19,823 |
|
19 |
% |
|
Gold (in thousands of
$) |
1,082 |
|
692 |
|
56 |
% |
|
Lead (in thousands of
$) |
15,178 |
|
17,051 |
|
-11 |
% |
|
Zinc (in thousands of
$) |
5,152 |
|
7,412 |
|
-30 |
% |
|
Other (in thousands of
$) |
606 |
|
147 |
|
312 |
% |
|
|
45,576 |
|
45,125 |
|
1 |
% |
Average Selling Price, Net of Value
Added Tax and Smelter Charges |
|
|
|
|
Silver ($ per
ounce) |
12.70 |
|
13.55 |
|
-6 |
% |
|
Gold ($ per
ounce) |
1,082.00 |
|
989 |
|
9 |
% |
|
Lead ($ per
pound) |
0.85 |
|
1.14 |
|
-25 |
% |
|
Zinc ($ per
pound) |
0.70 |
|
1.16 |
|
-40 |
% |
|
|
|
|
|
|
SILVERCORP
METALS INC. |
Mining Data |
(Expressed in
thousands of U.S. dollars, except for mining data figures) |
|
Ying Mining
District |
Three months ended June
30, |
|
|
2019 |
|
2018 |
|
Changes |
|
|
|
|
|
|
Production
Data |
|
|
|
Mine
Data |
|
|
|
|
Ore Mined
(tonne) |
176,584 |
|
156,730 |
|
13 |
% |
|
Ore Milled
(tonne) |
177,681 |
|
155,929 |
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|
Head
Grades |
|
|
|
|
Silver
(gram/tonne) |
330 |
|
323 |
|
2 |
% |
|
Lead
(%) |
4.6 |
|
4.5 |
|
3 |
% |
|
Zinc
(%) |
0.9 |
|
1.1 |
|
-16 |
% |
|
|
|
|
|
|
Recovery
Rates |
|
|
|
|
Silver
(%) |
95.8 |
|
96.0 |
|
0 |
% |
|
Lead
(%) |
95.9 |
|
96.3 |
|
0 |
% |
|
Zinc
(%) |
58.3 |
|
54.5 |
|
7 |
% |
|
|
|
|
|
Cost
Data |
|
|
|
+ |
Mining cost per tonne of ore mined
($) |
91.47 |
|
89.57 |
|
2 |
% |
|
Cash mining cost per tonne of ore
mined ($) |
63.05 |
|
63.49 |
|
-1 |
% |
|
Depreciation and amoritzation
charges per tonne of ore mined
($) |
28.42 |
|
26.08 |
|
9 |
% |
|
|
|
|
|
+ |
Unit shipping costs
($) |
4.04 |
|
4.31 |
|
-6 |
% |
|
|
|
|
|
+ |
Mining cost per tonne of ore milled
($) |
10.93 |
|
12.60 |
|
-13 |
% |
|
Cash milling cost per tonne of ore
milled ($) |
9.15 |
|
10.30 |
|
-11 |
% |
|
Depreciation and amoritzation
charges per tonne of ore milled
($) |
1.78 |
|
2.30 |
|
-23 |
% |
|
|
|
|
|
+ |
Cash production cost per tonne of
ore processed ($) |
76.24 |
|
78.10 |
|
-2 |
% |
+ |
All-in sustaining cost per tonne of
ore processed ($) |
129.14 |
|
121.87 |
|
6 |
% |
|
|
|
|
|
+ |
Cash cost per ounce of Silver, net
of by-product credits ($) |
(1.44 |
) |
(6.25 |
) |
-77 |
% |
+ |
All-in sustaining cost per tonne of
ore processed ($) |
4.82 |
|
0.28 |
|
-1821 |
% |
|
|
|
|
|
Concentrate inventory |
|
|
|
|
Lead concentrate
(tonne) |
4,208 |
|
5,250 |
|
-20 |
% |
|
Zinc concentrate
(tonne) |
200 |
|
200 |
|
0 |
% |
|
|
|
|
|
Sales
Data |
|
|
|
Metal
Sales |
|
|
|
|
Silver (in thousands of
ounces) |
1,662 |
|
1,313 |
|
27 |
% |
|
Gold (in thousands of
ounces) |
1.0 |
|
0.7 |
|
43 |
% |
|
Lead (in thousands of
pounds) |
14,835 |
|
13,313 |
|
11 |
% |
|
Zinc (in thousands of
pounds) |
2,090 |
|
2,133 |
|
-2 |
% |
|
|
|
|
|
Revenue |
|
|
|
|
Silver (in thousands of
$) |
21,730 |
|
18,350 |
|
18 |
% |
|
Gold (in thousands of
$) |
1,082 |
|
692 |
|
56 |
% |
|
Lead (in thousands of
$) |
12,693 |
|
15,275 |
|
-17 |
% |
|
Zinc (in thousands of
$) |
1,664 |
|
2,516 |
|
-34 |
% |
|
Other (in thousands of
$) |
605 |
|
134 |
|
351 |
% |
|
|
37,774 |
|
36,967 |
|
2 |
% |
Average Selling Price, Net of Value
Added Tax and Smelter Charges |
|
|
|
|
Silver ($ per
ounce) |
13.07 |
|
13.98 |
|
-7 |
% |
|
Gold ($ per
ounce) |
1,082 |
|
989 |
|
-9 |
% |
|
Lead ($ per
pound) |
0.86 |
|
1.15 |
|
-25 |
% |
|
Zinc ($ per
pound) |
0.80 |
|
1.18 |
|
-32 |
% |
|
|
|
|
|
|
SILVERCORP
METALS INC. |
Mining Data |
(Expressed in
thousands of U.S. dollars, except for mining data figures) |
|
GC
Mine |
Three months ended June
30, |
|
|
|
2019 |
|
2018 |
|
Changes |
|
|
|
|
|
|
Production
Data |
|
|
|
Mine
Data |
|
|
|
|
Ore Mined
(tonne) |
80,808 |
|
79,967 |
|
1 |
% |
|
Ore Milled
(tonne) |
81,861 |
|
81,811 |
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Head
Grades |
|
|
|
|
Silver
(gram/tonne) |
95 |
|
87 |
|
9 |
% |
|
Lead
(%) |
1.9 |
|
1.3 |
|
42 |
% |
|
Zinc
(%) |
3.4 |
|
2.9 |
|
16 |
% |
|
|
|
|
|
|
Recovery
Rates |
|
|
|
|
Silver (%)
* |
76.8 |
|
75.3 |
|
2 |
% |
|
Lead
(%) |
88.7 |
|
87.1 |
|
2 |
% |
|
Zinc
(%) |
85.7 |
|
84.8 |
|
1 |
% |
|
|
|
|
|
Cost
Data |
|
|
|
+ |
Mining cost per tonne of ore mined
($) |
46.64 |
|
44.62 |
|
5 |
% |
|
Cash mining cost per tonne of ore
mined ($) |
38.83 |
|
36.78 |
|
6 |
% |
|
Depreciation and amoritzation
charges per tonne of ore mined
($) |
7.81 |
|
7.84 |
|
0 |
% |
|
|
|
|
|
+ |
Mining cost per tonne of ore milled
($) |
15.88 |
|
17.14 |
|
-7 |
% |
|
Cash milling cost per tonne of ore
milled ($) |
13.85 |
|
14.46 |
|
-4 |
% |
|
Depreciation and amoritzation
charges per tonne of ore milled
($) |
2.03 |
|
2.68 |
|
-24 |
% |
|
|
|
|
|
+ |
Cash production cost per tonne of
ore processed ($) |
52.68 |
|
51.24 |
|
3 |
% |
+ |
All-in sustaining cost per tonne of
ore processed ($) |
67.33 |
|
61.91 |
|
9 |
% |
|
|
|
|
|
+ |
Cash cost per ounce of Silver, net
of by-product credits ($) |
(8.38 |
) |
(18.81 |
) |
-55 |
% |
+ |
All-in sustaining cost per tonne of
ore processed ($) |
(0.96 |
) |
(11.36 |
) |
-92 |
% |
|
|
|
|
|
Concentrate inventory |
|
|
|
|
Lead concentrate
(tonne) |
39 |
|
400 |
|
-90 |
% |
|
Zinc concentrate
(tonne) |
85 |
|
180 |
|
-53 |
% |
|
|
|
|
|
Sales
Data |
|
|
|
Metal
Sales |
|
|
|
|
Silver (in thousands of
ounces) |
193 |
|
150 |
|
29 |
% |
|
Lead (in thousands of
pounds) |
3,007 |
|
1,583 |
|
90 |
% |
|
Zinc (in thousands of
pounds) |
5,244 |
|
4,244 |
|
24 |
% |
|
|
|
|
|
Revenue |
|
|
|
|
Silver (in thousands of
$) |
1,828 |
|
1,473 |
|
24 |
% |
|
Lead (in thousands of
$) |
2,485 |
|
1,776 |
|
40 |
% |
|
Zinc (in thousands of
$) |
3,488 |
|
4,896 |
|
-29 |
% |
|
Other (in thousands of
$) |
1 |
|
13 |
|
-92 |
% |
|
|
7,802 |
|
8,158 |
|
-4 |
% |
Average Selling Price, Net of Value
Added Tax and Smelter Charges |
|
|
|
|
Silver ($ per ounce)
** |
9.47 |
|
9.82 |
|
-4 |
% |
|
Lead ($ per
pound) |
0.83 |
|
1.12 |
|
-26 |
% |
|
Zinc ($ per
pound) |
0.67 |
|
1.15 |
|
-42 |
% |
|
|
|
|
|
* Silver recovery
rate consists of 54.24% from lead concentrates (Q1 Fiscal 2019 -
49.6%) and 22.58% from zinc concentrates (Q1 Fiscal 2019 -
25.7%). |
** GC Silver sold
in zinc concentrates is subjected to higher smelter and refining
charges which lowers the net silver selling price. |
|
|
|
|
|
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