VANCOUVER, BC, Nov. 3, 2022
/PRNewswire/ - Silvercorp Metals Inc. ("Silvercorp" or the
"Company") (TSX: SVM) (NYSE American: SVM) reported its financial
and operating results for the three months ended September 30, 2022 ("Q2 Fiscal 2023"). All
amounts are expressed in US dollars, and figures may not add due to
rounding.
HIGHLIGHTS FOR Q2 FISCAL
2023
- Mined 290,981 tonnes of ore, milled 291,643 tonnes of ore, and
produced approximately 1.8 million ounces of silver, 1,200 ounces
of gold, 18.0 million pounds of lead, and 6.0 million pounds of
zinc;
- Sold approximately 1.8 million ounces of silver, 1,200 ounces
of gold, 17.3 million pounds of lead, and 5.9 million pounds of
zinc, for revenue of $51.7
million;
- Realized adjusted earnings attributable to equity shareholders
of $6.8 million, or $0.04 per share. The adjustments were made to
remove impacts from impairment charges, share-based compensation,
foreign exchange, mark-to-market equity investments, and the share
of associates' operating results;
- Reported net loss attributable to equity shareholders of
$1.7 million, or $0.01 per share, with the loss mainly due to an
impairment charge of $20.2 million
against the La Yesca Project;
- Generated cash flow from operating activities of $14.1 million;
- Cash costs per ounce of silver, net of by-product credits, of
$0.77;
- All-in sustaining costs per ounce of silver, net of by-product
credits, of $8.25;
- Spent and capitalized $2.9
million on exploration drilling, $9.4
million on underground development, and $1.2 million on construction of the new mill and
tailings storage facility;
- Spent $1.2 million to buy back
503,247 common shares of the Company under its Normal Course Issuer
Bid; and
- Strong balance sheet with $201.0
million in cash and cash equivalents and short-term
investments. The Company holds further equity investment portfolio
in associates and other companies with a total market value of
$111.0 million as at September 30, 2022.
CONSOLIDATED FINANCIAL RESULTS
Net loss attributable to equity shareholders of the
Company in Q2 Fiscal 2023 was $1.7
million or $0.01 per
share, compared to net income of $9.4
million or $0.05 per
share in the three months ended September
30, 2021 ("Q2 Fiscal 2022").
In Q2 Fiscal 2023, the Company's consolidated financial results
were mainly impacted by i) an increase of 3%, and 50%,
respectively, in silver and gold sold, and a decrease of 22% in
zinc sold; ii) a decrease of 18%, 11%, and 5%, respectively, in the
realized selling price for silver, gold, and lead, and an increase
of 5%, in the realized selling prices for zinc; iii) a foreign
exchange gain of $4.3 million arising
from the appreciation of the US dollar against the Company's
functional currencies, mainly the Chinese yuan and Canadian dollar;
iv) a loss of $1.6 million on equity
investments; and v) an impairment charge of $20.2 million against the La Yesca
Project.
Revenue in Q2 Fiscal 2023 was $51.7 million, down 11% compared to $58.4 million in Q2 Fiscal 2022. The decrease is
mainly due to the decrease of net realized selling prices for
silver, gold and lead.
Income from mine operations in Q2 Fiscal 2023 was
$14.4 million, down 39% compared to
$23.6 million in Q2 Fiscal 2022.
Income from mine operations at the Ying Mining District was
$12.9 million, compared to
$19.3 million in Q2 Fiscal 2022.
Income from mine operations at the GC Mine was $1.5 million, compared to $4.5 million in Q2 Fiscal 2022.
Cash flow provided by operating activities in Q2
Fiscal 2023 was $14.1 million, down
$16.8 million compared to
$30.9 million in Q2 Fiscal 2022.
The Company ended Q2 Fiscal 2023 with $201.0 million in cash, cash equivalents and
short-term investments, down 6% or $11.9
million, compared to $212.9
million as at March 31, 2022.
The decrease is mainly due to a negative translation impact of
$15.6 million on cash and cash
equivalents arising from the appreciation of the US dollar against
the Canadian dollar and Chinese yuan.
Working capital as at September 30,
2022 was $170.9 million, down
8% compared to $186.3 million as at
March 31, 2022.
CONSOLIDATED OPERATIONAL RESULTS
In Q2 Fiscal 2023, the Company mined 290,981 tonnes of ore, down
1% compared to 292,468 tonnes in Q2 Fiscal 2022. Ore milled in Q2
Fiscal 2023 was 291,643 tonnes, up 7% compared to 271,816 tonnes in
Q2 Fiscal 2022.
In Q2 Fiscal 2023, the Company produced approximately 1.8
million ounces of silver, 1,200 ounces of gold, 18.0 million pounds
of lead, and 6.0 million pounds of zinc, representing increases of
6%, 50% and 2%, respectively, in silver, gold and lead production,
and a decrease of 20% in zinc production over Q2 Fiscal 2022.
In Q2 Fiscal 2023, the consolidated production costs were
$86.07 per tonne, up 2% compared to
$84.75 per tonne in Q2 Fiscal 2022.
The all-in sustaining production costs per tonne of ore processed
in Q2 Fiscal 2023 were $127.48, down
6% compared to $135.76 in Q2 Fiscal
2022.
In Q2 Fiscal 2023, the consolidated cash costs per ounce of
silver, net of by-product credits, were $0.77, compared to negative $1.65 in the prior year quarter. The increase was
mainly due to a $1.6 million decrease
in by-product credits and a $2.6
million increase in expensed production costs.
The consolidated all-in sustaining costs per ounce of silver,
net of by-product credits, were $8.25
compared to $7.35 in Q2 Fiscal 2022.
The increase was mainly due to the increase in cash costs per ounce
of silver offset by a decrease of $2.2
million in administrative expenses, mineral resources tax,
and sustaining capital expenditures.
EXPLORATION AND DEVELOPMENT
In Q2 Fiscal 2023, on a consolidated basis, a total of 88,506
metres or $4.2 million worth of
diamond drilling were completed (Q2 Fiscal 2022 –
124,544 metres or $6.2 million),
of which approximately 45,365 metres or $1.3
million worth of underground drilling were expensed as part
of mining costs (Q2 Fiscal 2022 – 91,970 metres or $2.4 million) and approximately 43,141 metres or
$2.9 million worth of drilling were
capitalized (Q2 Fiscal 2022 – 32,574 metres or $3.8 million). In addition, approximately 10,340
metres or $4.0 million worth of
preparation tunnelling were completed and expensed as part of
mining costs (Q2 Fiscal 2022 – 9,953 metres or $3.4 million), and approximately 21,187 metres or
$9.4 million worth of tunnels,
raises, ramps and declines were completed and capitalized (Q2
Fiscal 2022 – 20,501 metres or $8.3
million).
In Q2 Fiscal 2023, a total of 5,525 metres or $0.5 million worth of drilling were completed and
capitalized at the Kuanping Project. The application for a mining
permit is pending review and approval by the relevant provincial
government authorities.
As of September 30, 2022, a total
of $2.5 million in expenditures have
been incurred on the construction of the new 3,000 tonnes per day
flotation mill (the "New Mill") and the new tailings storage
facility (the "TSF"). A total of 645 metres of drainage tunnels
were completed, and the site preparation for the New Mill was also
substantially completed. The first batch of $4.1 million (RMB¥29.3 million) of milling
equipment was ordered. The environmental and safety assessment
study report was revised and is pending government approval.
The Company also spent approximately $1.5
million to upgrade most roads to concrete and upgrade
certain environmental protection facilities at the Ying Mining
District as part of our continued commitment to build green
mines.
INDIVIDUAL MINE OPERATING PERFORMANCE - Ying Mining
District
INDIVIDUAL MINE OPERATING PERFORMANCE - GC Mine
As previously disclosed in the Company's news release dated
October 13, 2022, the mining
operations at the GC Mine were partially affected in August and
September 2022 as the Company worked
on improving ventilation and electric power facilities to comply
with several new safety production regulations issued by the
National Mine Safety Administration of China. The improvements were completed in
October 2022 and the Company expects
that mining operations at the GC Mine will return to normal
operating levels for the remainder of the year.
CONFERENCE CALL DETAILS
A conference call to discuss these results will be held
tomorrow, Friday, November 4, 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: 07271204
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
given consent to the technical information contained in this news
release.
About Silvercorp
Silvercorp is a Canadian mining company producing silver, gold,
lead, and zinc with a long history of profitability and growth
potential. The Company's strategy is to create shareholder value by
1) focusing on generating free cashflow from long life mines; 2)
organic growth through extensive drilling for discovery; 3) ongoing
merger and acquisition efforts to unlock value; and 4) long term
commitment to responsible mining and ESG. For more information,
please visit our website at www.silvercorp.ca.
ALTERNATIVE PERFORMANCE (NON-IFRS)
MEASURES
This earnings release should be read in conjunction with the
Company's Management Discussion & Analysis ("MD&A"), the
unaudited condensed consolidated interim financial statements and
related notes contains therein for the three and six months ended
September 30, 2022, 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
under the Investor section. This earnings release refers to various
alternative performance (non-IFRS) measures, such as adjusted
earnings and adjusted earnings per share, cash costs and all-in
sustaining costs per ounce of silver, net of by-product credits,
production costs and all-in sustaining production costs 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. The detailed description and
reconciliation of these alternative performance (non-IFRS) measures
have been incorporated by reference and can be found on page 28,
section 11 – Alternative Performance (Non-IFRS) Measures in the
MD&A for the three and six months ended September 30, 2022.
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" and in the Company's Annual Report on
Form 40-F, and in the Company's other filings with Canadian and
U.S. securities regulators. 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