Trading Symbol:
TSX: SVM
NYSE AMERICAN: SVM
VANCOUVER, BC, Aug. 5, 2021 /CNW/ - Silvercorp Metals Inc.
("Silvercorp" or the "Company") (TSX: SVM) (NYSE American: SVM)
reported its financial and operating results for the first quarter
ended June 30, 2021 ("Q1 Fiscal
2022"). All amounts are expressed in US Dollars, and figures may
not add due to rounding.
Q1 FISCAL 2022 HIGHLIGHTS
- Mined 231,235 tonnes of ore and milled 243,077 tonnes of ore,
down 9% and 7% compared to the prior year quarter due primarily to
slow downs during contract renewal negotiations with mining
contractors, which were successfully completed as announced
July 13, 2021;
- Sold approximately 1.6 million ounces of silver, 1,000 ounces
of gold, 16.8 million pounds of lead, and 7.3 million pounds of
zinc, representing decreases of 12%, 9%, and 20% in silver, gold
and lead sold, and an increase of 4% in zinc sold, compared to the
prior year quarter;
- Revenue of $58.8 million, up 26%
compared to $46.7 million in the
prior year quarter;
- Net income attributable to equity shareholders of $12.2 million, or $0.07 per share, compared to $15.5 million, or $0.09 per share in the prior year quarter;
- Adjusted earnings attributable to equity shareholders of
$15.8 million, or $0.09 per share, compared to $9.6 million, or $0.05 per share in the prior year quarter. The
adjustments were made to remove the impacts from non-recurring
items, share-based compensation, foreign exchange, mark-to-market
equity investments, and the share of associates' operating
results.
- Income from mine operations in Q1 Fiscal 2022 was $25.5 million, up 32% compared to $19.3 million in prior year quarter.
- Cash flow from operations of $36.5
million, up 21% or $6.4
million compared to $30.1
million in the prior year quarter;
- Cash cost per ounce of silver, net of by-product credits, of
negative $1.43 compared to negative
$1.48 in the prior year quarter;
- All-in sustaining cost per ounce of silver, net of by-product
credits, of $7.46, compared to
$5.61 in the prior year quarter;
- Paid $2.2 million of dividends to
the Company's shareholders;
- Invested $5.0 million in
Whitehorse Gold Corp. ("WHG") to increase the Company's ownership
interest in WHG by 2.5% to 29.5%; and,
- Strong balance sheet with $214.4
million in cash and cash equivalents and short-term
investments, up $15.3 million or 8%
compared to $199.1 million as at
March 31, 2021. This does not include
the investments in associates and equity investment in other
companies, having a total market value of $243.2 million as at June
30, 2021.
CONSOLIDATED FINANCIAL RESULTS
|
Three months ended
June 30,
|
|
2021
|
2020
|
Changes
|
Financial
|
|
|
|
Revenue (in
thousands of $)
|
$
|
58,819
|
$
|
46,705
|
26%
|
Mine operating
earnings (in thousands of $)
|
25,504
|
19,285
|
32%
|
Net income
attributable to equity shareholders
|
12,212
|
15,491
|
-21%
|
Earnings per
share - basic ($/share)
|
0.07
|
0.09
|
-22%
|
Adjusted earnings
attributable to equity shareholders
|
15,771
|
9,566
|
65%
|
Adjusted earning
per share - basic ($/share)
|
0.09
|
0.05
|
80%
|
Net cash generated
from operating activities (in thousands of $)
|
36,452
|
30,142
|
21%
|
Capitalized
expenditures (in thousands of $)
|
11,172
|
10,220
|
9%
|
Cash and cash
equivalents and short-term investments (in thousands of
$)
|
214,426
|
178,386
|
20%
|
Working capital
(in thousands of $)
|
188,905
|
153,732
|
23%
|
Metals
sold
|
|
|
|
Silver (in
thousands of ounces)
|
1,642
|
1,872
|
-12%
|
Gold (in
thousands of ounces)
|
1.0
|
1.1
|
-9%
|
Lead (in
thousands of pounds)
|
16,810
|
20,885
|
-20%
|
Zinc (in
thousands of pounds)
|
7,255
|
6,958
|
4%
|
Average
Selling Price, Net of Value Added Tax and Smelter
Charges
|
|
|
|
Silver
($/ounce)
|
20.70
|
13.99
|
48%
|
Gold
($/ounce)
|
1,508
|
1,343
|
12%
|
Lead
($/pound)
|
0.86
|
0.69
|
25%
|
Zinc
($/pound)
|
1.02
|
0.60
|
70%
|
Net income attributable to equity shareholders of the
Company in Q1 Fiscal 2022 was $12.2
million or $0.07 per share,
compared to $15.5 million or
$0.09 per share in three months ended
June 30, 2020 ("Q1 Fiscal 2021").
Adjusted earnings attributable to equity shareholders of
the Company in Q1 Fiscal 2022 was $15.8
million, or $0.09 per share,
compared to $9.6 million, or
$0.05 per share Q1 Fiscal 2021. The
adjustments were made to remove the impacts from non-cash and
unusual items, including elimination of share-based compensation,
foreign exchange loss, share of loss in associates, gain or loss on
mark-to-market equity investments, and one-time items.
In Q1 Fiscal 2022, the Company's consolidated financial results
were mainly impacted by i) an increase of 48%, 12%, 25%, and 70%,
respectively, in the realized selling prices for silver, gold, lead
and zinc; offset by ii) a decrease of 12%, 9%, and 20%,
respectively, in silver, gold, and lead sold; iii) lower
production; and iv) the depreciation of the US dollar against the
Company's functional currencies, mainly the Chinese yuan and the
Canadian dollar.
Revenue in Q1 Fiscal 2022 was $58.8 million, up 26% or $12.1 million compared to $46.7 million in Q1 Fiscal 2021. The increase was
mainly due to i) an increase of $19.3
million arising from the increase in the net realized
selling metal prices; ii) an increase of $1.3 million arising from the increase in the
quantities of zinc sold; offset by iii) a decrease of $8.5 million arising from the decrease in the
quantities of silver, gold, and lead sold. Revenues from silver,
gold, and base metal were $34.0
million, $1.5 million, and
$23.3 million, respectively, up 30%,
2%, and 22%, respectively, compared to $26.2
million, $1.5 million, and
$19.0 million in Q1 Fiscal 2021.
Revenue from the Ying Mining District was $47.4 million, up 19%, compared to $39.7 million in Q1 Fiscal 2021. Revenue from the
GC Mine was $11.4 million, up 62%,
compared to $7.0 million in Q1 Fiscal
2021.
Income from mine operations in Q1 Fiscal 2022 was
$25.5 million, up 32% compared to
$19.3 million in prior year quarter.
Income from mine operations at the Ying Mining District was
$21.2 million, up 20% compared to
$17.6 million in Q1 Fiscal 2021.
Income from mine operations at the GC Mine was $4.4 million, up 144% compared to $1.8 million in Q1 Fiscal 2021.
Cash flow provided by operating activities in Q1
Fiscal 2022 was $36.5 million, up 21%
or $6.3 million, compared to
$30.1 million in Q1 Fiscal 2021.
The Company ended the quarter with $214.4
million in cash, cash equivalents and short-term
investments, up 8% or $15.3 million,
compared to $199.1 million as at
March 31, 2021.
Working capital as at June 30,
2021 was $188.9 million, up 3%
or $4.9 million, compared to
$184.0 million as at March 31, 2021.
Consolidated OPERATIONAL RESULTS
|
Three months ended
June 30,
|
|
2021
|
2020
|
Changes
|
Ore Production
(tonne)
|
|
|
|
Ore
mined
|
231,235
|
254,555
|
-9%
|
Ore
milled
|
243,077
|
262,326
|
-7%
|
Metal
Proudction
|
|
|
|
Silver (in
thousands of ounces)
|
1,474
|
1,752
|
-16%
|
Gold (in thousands
of ounces)
|
1.0
|
1.1
|
-9%
|
Lead (in thousands
of pounds)
|
15,878
|
20,077
|
-21%
|
Zinc (in thousands
of pounds)
|
7,198
|
7,533
|
-4%
|
Cash
Costs
|
|
|
|
Cash cost per ounce
of Silver, net of by-product credits($)
|
(1.43)
|
(1.48)
|
3%
|
All-in sustaining
cost per ounce of silver, net of by-product credits
($)
|
7.46
|
5.61
|
33%
|
Cash production
cost per tonne of ore processed ($)
|
77.55
|
67.05
|
16%
|
All-in sustaining
cost per tonne of ore processed ($)
|
131.48
|
112.59
|
17%
|
In Q1 Fiscal 2022, on a consolidated basis, the Company mined
231,235 tonnes of ore, down 9% or 23,320 tonnes, compared to
254,555 tonnes in Q1 Fiscal 2021. Ore milled in Q1 Fiscal 2022 was
243,077 tonnes, down 7% or 19,249 tonnes, compared to 262,326
tonnes in Q1 Fiscal 2021. The decrease was primarily a result of
the Company's mining contract renewal negotiation at the Ying
Mining District as reported in the Company's news releases dated
July 13 and April 28, 2021. Contracts were renewed for
an additional 2 years in mid May
2021, and the Company expects to increase production
in the remaining three quarters and meet its annual guidance.
In Q1 Fiscal 2022, the Company produced approximately 1.5
million ounces of silver, 1,000 ounces of gold, 15.9 million pounds
of lead, and 7.2 million pounds of zinc, compared to 1.8
million ounces of silver, 1,100 ounces of gold, 20.1 million pounds
of lead, and 7.5 million pounds of zinc sold in Q1 Fiscal
2021.
Compared to Q1 Fiscal 2021, the Company's consolidated per tonne
costs in the current quarter were mainly impacted by i) 9%
appreciation of the Chinese yuan against the US dollar resulting in
higher costs presented in the US dollar; ii) an average 7% increase
in frontline workers' pay rate, iii) lower production at the
Ying Mining District resulting in higher per tonne fixed cost
allocation, and iv) an overall of 14.5% increase in mining
contractors' fee rate at the Ying Mining District as reported
previously in the Company's news release dated May 20, 2021. The consolidated cash
production cost and all-in sustaining production cost per tonne of
ore processed were $77.55 and
$131.48, up 16% and 17%,
respectively, compared to $67.05 and
$112.59 in Q1 Fiscal 2021, but both
were in line with the Company's Fiscal 2022 annual guidance.
In Q1 Fiscal 2022, the consolidated cash cost per ounce of
silver, net of by-product credits, was negative $1.43, compared to negative $1.48 in the prior year quarter. The increase was
mainly due to the increase in per tonne cash production costs as
discussed above, offset by an increase of $4.16 in by-product credits per ounce of silver.
Sales from lead and zinc in Q1 Fiscal 2022 amounted to $21.8 million, up $3.3
million, compared to $18.5
million in Q1 Fiscal 2021.
The consolidated all-in sustaining cost per ounce of silver, net
of by-product credits, was $7.46,
compared to $5.61 in Q1 Fiscal
2021. The increase was mainly due to the increase in per
tonne all-in sustaining production cost, offset by an increase of
$4.16 in by-product credits per ounce
of silver.
In Q1 Fiscal 2022, on a consolidated basis, a total of 107,913
metres or $4.6 million worth of
diamond drilling were completed (Q1 Fiscal 2021 – 36,697 metres or
$1.1 million), of which approximately
50,666 metres or $1.3 million worth
of underground drilling were expensed as part of mining costs (Q1
Fiscal 2021 – 36,697 metres or $1.1
million) and approximately 57,247 metres or $3.3 million worth of exploration drilling were
capitalized (Q1 Fiscal 2021 – nil). In addition, approximately
6,955 metres or $2.8 million worth of
preparation tunnelling were completed and expensed as part of
mining costs (Q1 Fiscal 2021 – 10,142 metres or $2.6 million), and approximately 17,263 metres or
$6.6 million worth of tunnels,
raises, ramps and declines were completed and capitalized (Q1
Fiscal 2021 – 26,375 metres or $9.0
million).
INDIVIDUAL MINE OPERATING PERFORMANCE
Ying Mining
District
|
Q1
2022
|
Q4
2021
|
Q3
2021
|
Q2
2021
|
Q1
2021
|
|
June 30,
2021
|
March 31,
2021
|
December 31,
2020
|
September
30, 2020
|
June 30,
2020
|
Ore Production
(tonne)
|
|
|
|
|
|
Ore
mined
|
142,907
|
112,561
|
182,268
|
181,020
|
174,176
|
Ore
milled
|
155,407
|
131,725
|
162,905
|
179,083
|
177,689
|
Head
grades
|
|
|
|
|
|
Silver
(gram/tonne)
|
279
|
280
|
297
|
288
|
293
|
Lead
(%)
|
4.2
|
3.9
|
4.3
|
4.4
|
4.6
|
Zinc
(%)
|
0.8
|
0.8
|
0.8
|
0.7
|
0.8
|
Recovery
rates
|
|
|
|
|
|
Silver
(%)
|
94.7
|
93.7
|
93.9
|
94.4
|
94.7
|
Lead
(%)
|
95.7
|
95.1
|
96.4
|
96.1
|
96.2
|
Zinc
(%)
|
59.7
|
65.0
|
63.3
|
57.9
|
63.8
|
Cash
Costs
|
|
|
|
|
|
Cash cost per ounce
of Silver, net of by-product credits($)
|
0.80
|
1.20
|
(1.12)
|
(0.14)
|
(0.87)
|
All-in sustaining
cost per ounce of silver, net of by-product credits
($)
|
6.54
|
10.00
|
5.24
|
6.63
|
4.14
|
Cash production
cost per tonne of ore processed ($)
|
92.79
|
98.13
|
83.09
|
80.06
|
76.21
|
All-in sustaining
cost per tonne of ore processed ($)
|
138.55
|
155.14
|
133.07
|
132.36
|
116.99
|
Metal
Production
|
|
|
|
|
|
Silver (in
thousands of ounces)
|
1,283
|
1,083
|
1,464
|
1,525
|
1,544
|
Gold (in thousands
of ounces)
|
1.0
|
0.3
|
0.9
|
1.1
|
1.2
|
Lead (in thousands
of pounds)
|
13,278
|
10,504
|
14,361
|
16,080
|
16,941
|
Zinc (in thousands
of pounds)
|
1,519
|
1,496
|
1,857
|
1,643
|
1,920
|
In Q1 Fiscal 2022, a total of 89,189 metres or $3.9 million worth of diamond drilling were
completed (Q1 Fiscal 2021 – 28,485 metres or $0.8 million) at the Ying Mining District, of
which approximately 31,942 metres or $0.7
million worth of underground drilling were expensed as part
of mining costs (Q1 Fiscal 2021 – 28,485 metres or $0.8 million) and approximately 57,247 metres or
$3.3 million worth of exploration
drilling were capitalized (Q1 Fiscal 2021 – nil). In addition,
approximately 6,501 metres or $2.5
million worth of preparation tunnelling were completed and
expensed as part of mining costs (Q1 Fiscal 2021 – 6,207 metres or
$1.8 million), and approximately
12,973 metres or $5.4 million worth
of horizontal tunnels, raises, ramps, and declines were completed
and capitalized (Q1 Fiscal 2021 – 23,108 metres or $7.8 million).
GC
Mine
|
Q1
2022
|
Q4 2021
|
Q3
2021
|
Q2
2021
|
Q1
2021
|
|
June 30,
2021
|
March 31,
2021
|
December 31,
2020
|
September
30, 2020
|
June 30,
2020
|
Ore Production
(tonne)
|
|
|
|
|
|
Ore
mined
|
88,328
|
50,511
|
97,177
|
86,833
|
80,379
|
Ore
milled
|
87,670
|
48,949
|
97,743
|
84,850
|
84,637
|
Head
grades
|
|
|
|
|
|
Silver
(gram/tonne)
|
80
|
87
|
82
|
81
|
93
|
Lead
(%)
|
1.5
|
1.7
|
1.4
|
1.8
|
1.9
|
Zinc
(%)
|
3.3
|
3.3
|
3.5
|
3.4
|
3.4
|
Recovery
rates
|
|
|
|
|
|
Silver
(%)
|
84.1
|
81.9
|
82.6
|
82.5
|
82.8
|
Lead
(%)
|
89.3
|
89.7
|
89.6
|
89.2
|
89.8
|
Zinc
(%)
|
89.3
|
88.2
|
89.7
|
87.3
|
87.3
|
Cash
Costs
|
|
|
|
|
|
Cash cost per ounce
of Silver, net of by-product credits($)
|
(17.96)
|
(12.80)
|
(14.43)
|
(12.70)
|
(6.59)
|
All-in sustaining
cost per ounce of silver, net of by-product credits
($)
|
(7.98)
|
0.52
|
(1.05)
|
(1.78)
|
2.41
|
Cash production
cost per tonne of ore processed ($)
|
52.90
|
58.56
|
54.07
|
48.47
|
47.08
|
All-in sustaining
cost per tonne of ore processed ($)
|
71.67
|
87.69
|
78.63
|
69.07
|
65.84
|
Metal
Production
|
|
|
|
|
|
Silver (in
thousands of ounces)
|
190
|
112
|
212
|
182
|
209
|
Lead (in thousands
of pounds)
|
2,600
|
1,652
|
2,750
|
3,006
|
3,136
|
Zinc (in thousands
of pounds)
|
5,679
|
3,176
|
6,816
|
5,490
|
5,613
|
In Q1 Fiscal 2022, approximately 18,724 metres or $0.6 million worth of underground diamond
drilling (Q1 Fiscal 2021 – 8,212 metres or $0.3 million) and 454 metres or $0.3 million of tunnelling (Q1 Fiscal 2021 –
3,458 metres or $0.8 million) were
completed and expensed as mining preparation costs at the GC Mine.
In addition, approximately 4,290 metres or $1.2 million of horizontal tunnels, raises, and
declines were completed and capitalized (Q1 Fiscal 2021 – 3,267
metres or $1.2 million).
CONFERENCE CALL DETAILS
A conference call to discuss these results will be held
tomorrow, Friday, August 6, at
9:00 am PDT (12:00 pm EDT). To participate in the conference
call, please dial the numbers below.
Canada/USA TF: 888-664-6383
International Toll: 416-764-8650
Conference ID: 22851634
Participants should dial-in 10 – 15 minutes prior to the start
time. A replay of the conference call and transcript will be
available on the Company's website at www.silvercorp.ca.
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
consented to the technical information contained in this news
release.
This earnings release should be read in conjunction with the
Company's Management Discussion & Analysis ("MD&A"),
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. This
earnings release refers to various alternative performance
(non-IFRS) measures, such as adjusted earnings and adjusted
earnings per share, cash cost and all-in sustaining cost per ounce
of silver, net of by-product credits, cash production cost and
all-in sustaining production cost per tonne of ore processed and
working capital. These measures are widely used in the mining
industry as a benchmark for performance, but do not have
standardized meanings under IFRS as an indicator of performance and
may differ from methods used by other companies with similar
description. Accordingly, to facilitate a better
understanding of these measures as calculated by the Company,
please refer to section 10 – Alternative Performance (Non-IFRS)
Measures of the corresponding MD&A for detailed description and
reconciliation.
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.
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: global economic and social impact of COVID-19;
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.
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SOURCE Silvercorp Metals Inc