Silvercorp Reports Adjusted Net Income of $11.5 Million, $0.06 per Share, and Cash Flow from Operations of $23.6 Million for Q3 Fiscal 2024
Trading Symbol: TSX: SVM NYSE AMERICAN: SVM
VANCOUVER, BC, Feb. 8, 2024 /CNW/ - Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX/NYSE American: SVM) reports its financial and operating results for the three months ended December 31, 2023 ("Q3 Fiscal 2024"). All amounts are expressed in US dollars, and figures may not add due to rounding.
HIGHLIGHTS FOR Q3 FISCAL 2024
Mined 345,273 tonnes of ore, milled 312,500 tonnes of ore, and produced approximately 1,342 ounces of gold, 1.7 million ounces of silver, or approximately 1.8 million ounces of silver equivalent, plus 16.8 million pounds of lead and 7.4 million pounds of zinc;
Sold approximately 1,342 ounces of gold, 1.7 million ounces of silver, 16.2 million pounds of lead, and 7.3 million pounds of zinc, for revenue of $58.5 million;
Reported net income attributable to equity shareholders of $10.5 million, or $0.06 per share;
Realized adjusted earnings attributable to equity shareholders of $11.5 million, or $0.06 per share;
Generated cash flow from operating activities of $23.6 million;
Cash costs per ounce of silver, net of by-product credits, of negative $0.96;
All-in sustaining costs per ounce of silver, net of by-product credits, of $11.33;
Spent and capitalized $1.6 million on exploration drilling, $14.1 million on underground development, and $3.9 million on equipment and facilities, including $1.3 million on construction of the new tailings storage facility;
Entered into a Bid Implementation Deed ("BID") with OreCorp Limited (ASX: ORR) ("OreCorp") to launch an off-market takeover to acquire all OreCorp Shares not already owned by Silvercorp for A$0.19 cash plus 0.0967 common shares of Silvercorp per OreCorp Share; and
Strong balance sheet with $198.3 million in cash and cash equivalents and short-term investments. The Company holds a further equity investment portfolio in associates and other companies with a total market value of $139.5 million as at December 31, 2023.
CONSOLIDATED FINANCIAL RESULTS
Three months ended December 31,
Nine months ended December 31,
2023
2022
Changes
2023
2022
Changes
Financial Results
Revenue (in thousands of $)
$ 58,508
$ 58,651
0 %
$ 172,506
$ 173,982
-1 %
Mine operating earnings (in thousands of $)
23,307
21,744
7 %
67,551
61,007
11 %
Net income (loss) attributable to equity holders (in thousands of $)
10,510
11,916
-12 %
30,777
20,373
51 %
Earnings (loss) per share - basic ($/share)
0.06
0.07
-14 %
0.17
0.12
42 %
Adjusted earnings attributable to equity holders (in thousands of $)
11,452
11,775
-3 %
35,498
32,056
11 %
Adjusted earning per share - basic ($/share)
0.06
0.07
-14 %
0.20
0.18
11 %
Net cash generated from operating activities (in thousands of $)
23,607
25,661
-8 %
81,332
79,901
2 %
Capitalized expenditures (in thousands of $)
19,635
15,484
27 %
50,609
48,366
5 %
Metals sold
Gold (ounces)
1,342
1,100
22 %
5,352
3,400
57 %
Silver (in thousands of ounces)
1,703
1,860
-8 %
5,096
5,564
-8 %
Lead (in thousands of pounds)
16,248
19,273
-16 %
48,753
55,666
-12 %
Zinc (in thousands of pounds)
7,320
7,119
3 %
18,818
19,987
-6 %
Average Selling Price, Net of Value Added Tax and Smelter Charges
Gold ($/ounce)
1,718
1,541
11 %
1,754
1,479
19 %
Silver ($/ounce)
20.14
17.17
17 %
19.74
16.91
17 %
Lead ($/pound)
0.87
0.85
2 %
0.86
0.87
-1 %
Zinc ($/pound)
0.82
0.96
-15 %
0.81
1.09
-26 %
Financial Position as at
December 31, 2023
September 30, 2023
December 31, 2023
March 31, 2023
Cash and cash equivalents and short-term investments (in thousands of $)
198,295
189,091
5 %
198,295
203,323
-2 %
Working capital (in thousands of $)
159,555
154,330
3 %
159,555
177,808
-10 %
Revenue in Q3 Fiscal 2024 was $58.5 million, a slight decrease compared to $58.7 million in Q3 Fiscal 2023. The decrease is mainly due to the decrease in silver and lead sold and a lower zinc price, offset by the increase in the net realized selling prices for gold, silver, and lead.
Income from mine operations in Q3 Fiscal 2024 was $23.3 million, up 7% compared to $21.7 million in Q3 Fiscal 2023. Income from mine operations at the Ying Mining District was $21.5 million, compared to $19.0 million in Q3 Fiscal 2023. Income from mine operations at the GC Mine was $1.9 million, compared to income of $2.9 million in Q3 Fiscal 2023.
Net income attributable to equity shareholders of the Company in Q3 Fiscal 2024 was $10.5 million or $0.06 per share, compared to net income of $11.9 million or $0.07 per share in Q3 Fiscal 2023.
Compared to Q3 Fiscal 2023, the Company's consolidated financial results in the current quarter were mainly impacted by i) increases of 11%, 17%, and 2%, respectively, in the realized selling prices for gold, silver, and lead, and a decrease of 15% in the realized selling price for zinc; ii) increases of 22% and 3%, respectively in gold and zinc sold and decreases of 8% and 16%, respectively, in silver and lead sold; iii) a decrease of 4% in per tonne production costs; iv) an improvement of $4.4 million in mark-to-market investments; and v) an increase of $5.0 million in the share of loss in associates.
Cash flow provided by operating activities in Q3 Fiscal 2024 was $23.6 million, down $2.1 million, compared to $25.7 million in Q3 Fiscal 2023. The Company ended the quarter with $198.3 million in cash, cash equivalents and short-term investments, up 5% compared to $189.1 million as at September 30, 2023.
Working capital as at December 31, 2023 was $159.6 million, up 3% compared to $154.3 million as at September 30, 2023.
CONSOLIDATED OPERATIONAL RESULTS
Three months ended December 31,
Nine months ended December 31,
2023
2022
Changes
2023
2022
Changes
Ore Production (tonne)
Ore mined
345,273
296,050
17 %
921,958
887,135
4 %
Ore milled
Gold ore
12,726
-
100 %
36,419
-
100 %
Silver ore
299,774
303,442
-1 %
832,283
893,261
-7 %
312,500
303,442
3 %
868,702
893,261
-3 %
Metal Production
Gold (ounces)
1,342
1,100
22 %
5,352
3,400
57 %
Silver (in thousands of ounces)
1,684
1,853
-9 %
5,054
5,511
-8 %
Silver equivalent (in thousands of ounces)
1,795
1,949
-8 %
5,520
5,802
-5 %
Lead (in thousands of pounds)
16,763
20,059
-16 %
50,644
57,130
-11 %
Zinc (in thousands of pounds)
7,404
6,974
6 %
18,826
19,886
-5 %
Cash Costs
Production costs per tonne of ore processed ($)
74.26
77.73
-4 %
77.57
82.25
-6 %
All-in sustaining costs per tonne of ore processed ($)
136.86
136.90
0 %
139.79
137.33
2 %
Cash costs per ounce of silver, net of by-product credits ($)
(0.96)
(1.15)
17 %
(0.74)
(0.68)
-9 %
All-in sustaining costs per ounce of silver, net of by-product credits ($)
11.33
9.28
22 %
10.72
8.94
20 %
In Q3 Fiscal 2024, the Company mined 345,273 tonnes of ore, up 17% compared to 296,050 tonnes in Q3 Fiscal 2023. Ore milled in Q3 Fiscal 2024 was 312,500 tonnes, up 3% compared to 303,442 tonnes in Q3 Fiscal 2023. A total of 60,095 tonnes of ores were stockpiled at the Ying Mining District and will be processed in the fourth quarter during the Chinese New Year holiday.
In Q3 Fiscal 2024, the Company produced approximately 1,342 ounces of gold, 1.7 million ounces of silver, or approximately 1.8 million ounces of silver equivalent, plus 16.8 million pounds of lead and 7.4 million pounds of zinc, representing increases of 22% and 6%, respectively, in gold and zinc production, and decreases of 9% and 16%, respectively, in silver and lead production over Q3 Fiscal 2023. The decreases in silver and lead production were mainly due to i) lower head grades achieved due to mining sequences; ii) more ores stockpiled to be processed in the fourth quarter during the Chinese New Year holiday; and iii) 12,700 tonnes of gold ore with grades of 1.9 grams per tonne ("g/t") gold, 74 g/t silver, 1.0% lead and 0.1% zinc mined and processed, at the Ying Mining District.
In Q3 Fiscal 2024, the consolidated mining costs were $59.43 per tonne, down 5% compared to $62.69 per tonne in Q3 Fiscal 2023. The consolidated milling costs were $12.44 per tonne, down 1% compared to $12.56 per tonne in Q3 Fiscal 2023. Correspondingly, the consolidated production costs per tonne of ore processed were $74.26, down 4% compared to $77.73 in Q3 Fiscal 2023. The all-in sustaining production costs per tonne of ore processed in Q3 Fiscal 2024 were $136.89, a slight decrease compared to $136.90 in Q3 Fiscal 2023. The decrease was mainly attributed to higher ore production resulting in lower unit fixed costs allocation and an approximate 4% depreciation of the Chinese yuan against the US dollar over the same prior year period.
In Q3 Fiscal 2024, the consolidated cash costs per ounce of silver, net of by-product credits, were negative $0.96, compared to negative $1.15 in the prior year quarter. The consolidated all-in sustaining costs per ounce of silver, net of by-product credits, were $11.33 compared to $9.28 in Q3 Fiscal 2023. The increase was mainly due to i) a decrease of $2.5 million in by-product credits, offset by a decrease of $0.5 million in all-in sustaining costs; and ii) less silver sold resulting in higher unit costs per ounces of silver.
EXPLORATION AND DEVELOPMENT
Capitalized Development and Expenditures
Expensed
Ramp Development
Exploration and Development Tunnels
Drilling
Equipment & Mill and TSF
Total
Mining Preparation Tunnels
Drilling
(Metres)
($ Thousand)
(Metres)
($ Thousand)
(Metres)
($ Thousand)
($ Thousand)
($ Thousand)
(Metres)
(Metres)
Q3 Fiscal 2024
Ying Mining District
3,986
$ 2,651
23,834
$ 9,612
39,085
$ 1,338
3,679
$ 17,280
10,010
24,693
GC Mine
81
108
3,747
1,688
10,912
250
218
2,264
2,145
12,327
Corporate and other
-
-
-
-
-
82
9
91
-
-
Consolidated
4,067
$ 2,759
27,581
$ 11,300
49,997
$ 1,670
$ 3,906
$ 19,635
12,155
37,020
Q3 Fiscal 2023
Ying Mining District
1,776
$ 1,294
15,527
$ 6,549
27,066
$ 895
3,250
$ 11,988
7,933
25,270
GC Mine
-
-
3,642
1,133
4,444
204
1,951
3,288
1,786
12,470
Corporate and other
-
-
-
-
978
268
95
363
-
-
Consolidated
1,776
$ 1,294
19,169
$ 7,682
32,488
$ 1,367
$ 5,296
$ 15,639
9,719
37,740
Total capital expenditures in Q3 Fiscal 2024 were $19.6 million, up 26% compared to $15.6 million in Q3 Fiscal 2023. The increase is mainly due to more tunneling development and exploration activities conducted in Q3 Fiscal 2024.
In Q3 Fiscal 2024, on a consolidated basis, a total of 87,017 metres or $2.4 million worth of diamond drilling were completed (Q3 Fiscal 2023 – 70,228 metres or $2.5 million), of which approximately 37,020 metres or $0.7 million worth of underground drilling were expensed as part of mining costs (Q3 Fiscal 2023 – 37,740 metres or $1.1 million) and approximately 49,997 metres or $1.6 million worth of drilling were capitalized (Q3 Fiscal 2023 – 32,448 metres or $1.4 million ). In addition, approximately 12,155 metres or $4.5 million worth of preparation tunnelling were completed and expensed as part of mining costs (Q3 Fiscal 2023 – 9,719 metres or $3.8 million), and approximately 31,648 metres or $14.1 million worth of tunnels, raises, ramps and declines were completed and capitalized (Q3 Fiscal 2023 – 20,945 metres or $9.0 million).
INDIVIDUAL MINE OPERATING PERFORMANCE
The table below summarizes the operating results at the Ying Mining District for the past five quarters and for the nine months ended December 31, 2023 and 2022.
Ying Mining District
Q3 F2024
Q2 F2024
Q1 F2024
Q4 F2023
Q3 F2023
Nine months ended December 31,
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
2023
2022
Ore Production (tonne)
Ore mined
245,606
220,636
213,748
132,205
206,854
679,990
636,819
Ore milled
Gold ore
12,726
12,800
10,893
-
-
36,419
-
Silver ore
201,475
200,068
197,916
130,910
213,830
599,459
642,147
214,201
212,868
208,809
130,910
213,830
635,878
642,147
Head grades
Silver (grams/tonne)
235
235
254
255
262
241
262
Lead (%)
3.5
3.5
3.6
3.6
4.0
3.5
3.9
Zinc (%)
0.7
0.7
0.7
0.6
0.7
0.7
0.7
Recovery rates
Silver (%)
94.9
95.0
95.1
95.2
95.7
95.0
95.7
Lead (%)
94.8
95.0
95.5
95.3
95.4
95.1
95.0
Zinc (%)
71.4
71.1
69.6
68.3
66.4
70.7
62.3
Cash Costs
Cash production cost per tonne of ore processed ($)
84.01
102.42
88.66
95.23
93.04
84.33
92.35
All-in sustaining cost per tonne of ore processed ($)
143.80
170.69
141.21
127.89
156.07
140.20
141.66
Cash cost per ounce of Silver, net of by-product credits ($)
(0.09)
1.37
0.24
1.86
0.28
(0.38)
0.78
All-in sustaining cost per ounce of silver, net of by-product credits ($)
8.99
11.33
7.66
6.82
8.60
8.04
7.71
Metal Production
Gold ( ounces)
1,342
1,552
1,000
1,100
1,200
5,352
3,400
Silver (in thousands of ounces)
1,511
1,597
997
1,674
1,657
4,665
5,083
Lead (in thousands of pounds)
14,552
15,382
9,688
17,647
16,201
43,471
49,316
Zinc (in thousands of pounds)
2,153
2,113
1,164
2,082
1,976
6,510
6,060
The table below summarizes the operating results at the GC Mine for the past five quarters and for the nine months ended December 31, 2023 and 2022.
GC Mine
Q3 F2024
Q2 F2024
Q1 F2024
Q4 F2023
Q3 F2023
Nine months ended December 31,
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
2023
2022
Ore Production (tonne)
Ore mined
99,667
89,472
49,643
89,196
75,054
241,968
250,316
Ore milled
98,299
86,286
48,483
89,612
75,381
232,824
251,114
Head grades
Silver (grams/tonne)
68
80
88
75
72
72
73
Lead (%)
1.1
1.4
1.3
1.4
1.2
1.2
1.3
Zinc (%)
2.7
2.7
2.5
2.8
2.7
2.7
2.8
Recovery rates
Silver (%)
80.3
82.7
78.9
83.0
81.0
81.8
82.5
Lead (%)
90.9
90.7
90.9
90.3
88.5
90.7
89.6
Zinc (%)
90.1
90.4
89.3
90.1
89.6
90.2
90.1
Cash Costs
Cash production cost per tonne of ore processed ($)
50.38
67.34
52.35
59.84
57.92
58.50
56.51
All-in sustaining cost per tonne of ore processed ($)
76.84
84.79
88.26
78.31
81.68
86.93
83.02
Cash cost per ounce of Silver, net of by-product credits ($)
(8.95)
(3.10)
(13.72)
(12.13)
(22.42)
(4.69)
(16.08)
All-in sustaining cost per ounce of silver, net of by-product credits ($)
8.01
5.93
5.02
(0.73)
(7.48)
11.98
(0.71)
Metal Production
Silver (in thousands of ounces)
173
183
109
179
141
431
481
Lead (in thousands of pounds)
2,211
2,434
1,250
2,412
1,782
5,282
6,350
Zinc (in thousands of pounds)
5,251
4,708
2,413
4,892
4,010
12,308
13,927
OPERATING OUTLOOK
The Company is currently refining the mine plan and expects to provide Fiscal 2025 guidance along with the release of Fiscal 2024 production results in April 2024.
In the fourth quarter of Fiscal 2024, the Company expects to process 215,000 to 240,000 tonnes of ore to produce approximately 1,200 to 1,300 ounces of gold, 1.1 to 1.3 million ounces of silver, 11.5 to 13.5 million pounds of lead, and 4.5 to 5.0 million pounds of zinc, representing production increases of 11% to 30% in ore, 20% to 30% in gold, 0% to 17% in silver, 5% to 20% in lead, and 26% to 40% in zinc compared to the production results in the same quarter last year.
CONFERENCE CALL DETAILS
A conference call to discuss these results will be held tomorrow, Friday, February 9, 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/Local Toll: 416-764-8650
Conference ID: 84281283
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.silvercorpmetals.com
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 sound Environmental, Social, and Governance ("ESG") practices. For more information, please visit our website at www.silvercorpmetals.com.
This news release should be read in conjunction with the Company's Management Discussion & Analysis ("MD&A"), the unaudited condensed interim consolidated financial statements and related notes contains therein for the three and nine months ended December 31, 2023, which have been posted on SEDAR+ under the Company's profile at www.sedarplus.ca and on EDGAR at www.sec.gov, and are also available on the Company's website at www.silvercorpmetals.com under the Investor section. This news 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, silver equivalent, 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 32, section 11 – Alternative Performance (Non-IFRS) Measures in the MD&A for the three and nine months ended December 31, 2023 filled on SEDAR at www.sedarplus.ca and EDGAR at www.sec.gov and which is incorporated by reference here in.
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 and US 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.
Actual results may vary from forward-looking statements. 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 public health crises; 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. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, guidance cannot be guaranteed. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.