ISCAL YEAR 20 Sales of $45.1 Net income a increase of $4
NEW WS RELEASE Trading Symbol: TSX: SVM NYSE AMERICAN: SVM
SILVE ERCORP REPO ORTS Q1 NET INCOME OF $ $10.9 MILLION, $0.07 PER SHARE, SALES UP 14%, AND CA ASH FLOW FRO OM OPERATIONS UP 25%
VANC COUVER, Briti ish Columbia –
- August 9, 20 018 – Silverco orp Metals Inc
c. (“Silvercorp” or the “Com mpany”) (TSX:
: SVM) (NYSE American: SV VM) reported its financial and operating results for the e first quarter r ended June 30, 2018 (“Q nts are expressed in US Doll Q1 Fiscal 2019 9”). All amoun lars.
Q1 FISCAL YEAR 20 019 HIGHLIGH HTS
- Sales of $45.1 1 million, up 1 14% or $5.4 million compare ed to $39.7 million in the pr rior year quart ter;
- Net income a r share1, an effective attributable to equity shar reholders of $ $10.9 million, or $0.07 per 4.3 million or 65% over the prior year quarter, which w increase of $4 was $6.6 millio on or $0.04 pe er share e non‐cash gain on disposal of NSR, which increased th he actual net income after excludin ng a one‐time to shareholders to $10.9 mi illion or $0.07 per share for that period;
attributable t
- Gross profit m margin of 55% % compared with 50% in the e prior year qu uarter;
- Cash flow fro om operations s of $21.1 million, an incre ease of $4.2 m million or 25% % compared to
- $16.9
million in the e prior year qu uarter;
- Silver, lead, a and zinc meta als sold amounted to appro oximately 1.5 million ounce es silver, 14.9 million , 15.9 million pounds pounds lead, and 6.4 millio on pounds zinc, compared t to 1.5 million ounces silver, lead, and 5.0 0 million pounds zinc in th he prior year quarter. The ending inven ntories of silv ver‐lead ning approximately 0.5 million ounces of silver and 6.2 million concentrate w were 5,650 to onnes (contain mpared to 4,070 tonnes of s pounds of lea ad), an increas se of 39%, com silver‐lead con ncentrate inve entories as at March 3 31, 2018;
- Cash cost per ounce of sil lver2, net of b by‐product cre edits, of nega ative $7.54, co ompared to n negative $3.57 in the p prior year quarter;
- All‐in sustaining cost per o ounce of silver2, net of by‐p product credit ts, of $0.41, c compared to $ $4.70 in the prior year quarter;
- Paid dividend d of $2.1 millio on, or $0.0125 5 per share, to
- equity shareholders; and,
- Ended the qu uarter with $1 114.8 million i in cash and ca ash equivalent ts and short‐t term investme ents, an d to $106.1 million as at March 31, 2018.
increase of $8 8.7 million or 8% compared
FINA ANCIALS
Net i income attrib butable to equ uity sharehold ders of the Co
ompany in Q1 1 Fiscal 2019 w was $10.9 mil llion, or basic c earnings per share of $0.0 07, compared t to $10.9 millio on, or $0.07 p per share ($6.6 6 million or $0 0.04 per share e if excluding o one‐time non‐cash gain on disposal of NS SR) in Q1 Fisca al 2018.
1 Earnings per share ref fers to basic earnings per share 2 Non IFRS measure, ple on ease refer to sect tion 10 of the corr responding MD&A A for reconciliatio Sales in Q1 Fiscal 2019 were $45.1 million, up 14% compared to $39.7 million in the prior year quarter. Silver and gold sales represented $19.8 million and $0.7 million, respectively, while base metals represented $24.6 million of total sales compared to silver, gold and base metals sales of $20.2 million, $1.0 million, and $18.6 million, respectively, in the prior year quarter.
The Company’s financial results in Q1 Fiscal 2019 were mainly impacted by the following: i) an increase of 2%, 34%, and 23% in the net realized selling price for silver, lead, and zinc, respectively; ii) slightly less silver and lead sold; and iii) an 8% increase in consolidated cash production costs per tonne of ore processed.
As at June 30, 2018, inventories of silver‐lead concentrate were 5,650 tonnes (containing approximately 0.5 million ounces of silver and 6.2 million pounds of lead), an increase of 39% and 37%, respectively, compared to 4,070 tonnes and 4,111 tonnes of silver‐lead concentrate inventories as at March 31, 2018 and June 30, 2017, respectively.
Cost of sales in Q1 Fiscal 2019 was $20.3 million compared to $19.7 million in Q1 Fiscal 2018. The cost of sales included $14.3 million cash production costs (Q1 Fiscal 2018 ‐ $14.1 million), $1.2 million mineral resources tax (Q1 Fiscal 2018 ‐ $1.1 million), and $4.7 million depreciation and amortization charges (Q1 Fiscal 2018 ‐ $4.5 million). The cash production costs expensed in cost of sales represent approximately 206,800 tonnes of ore processed and expensed at costs of $69.05 per tonne (Q1 Fiscal 2018 – approximately 221,500 tonnes at $63.70 per tonne)
Gross profit margin in Q1 Fiscal 2019 improved to 55%, compared to 50% in Q1 Fiscal 2018. Ying Mining District’s gross profit margin was 59% compared to a 56% gross profit margin in the prior year quarter, while GC Mine’s gross profit margin was 39% compared to a 30% gross profit margin in the prior year quarter.
General and administrative expenses in Q1 Fiscal 2019 were $4.5 million, a slight decrease compared to $4.6 million in Q1 Fiscal 2018.
Income tax expenses in Q1 Fiscal 2019 were $6.5 million compared to $4.0 million in Q1 Fiscal 2018. The income tax expenses recorded in Q1 Fiscal 2019 included current income tax expenses of $5.9 million (Q1 Fiscal 2018 – $3.2million) and deferred income tax expenses of $0.5 million (Q1 Fiscal 2018 – $0.8 million).
Cash flows provided by operating activities in Q1 Fiscal 2019 were $21.1 million, an increase of $4.2 million or 25%, compared to $16.9 million in the prior year quarter. Before changes in non‐cash operating working capital3, cash flows provided by operating activities in Q1 Fiscal 2019 were $23.5 million, an increase of $8.8 million or 60%, compared to $14.7 million in the prior year quarter.
The Company ended the quarter with $114.8 million in cash and short‐term investments, an increase of $8.7 million or 8% compared to $106.1 million as at March 31, 2018.
Working capital as at June 30, 2018 was $94.1 million, an increase of $3.6 million or 4%, compared to $90.5 million working capital as at March 31, 2018.
OPERATIONS AND DEVELOPMENT
In Q1 Fiscal 2019, on a consolidated basis, the Company mined 236,697 tonnes of ore, an increase of 5% compared to 225,273 tonnes in Q1 Fiscal 2018. The increase in ore mined was mainly due to an increase of 23% or 15,102 tonnes at the GC Mine, offset by a decrease of 2% or 3,678 tonnes at the Ying Mining District. Ore milled were 237,740 tonnes, up by 3% compared to 230,903 tonnes of ore milled in Q1 Fiscal 2018.
In Q1 Fiscal 2019, the Company sold 1.5 million ounces of silver, 700 ounces of gold, 14.9 million pounds of lead, and 6.4 million pounds of zinc, compared to 1.5 million ounces of silver, 900 ounces of gold, 15.9 million pounds of lead, and 5.0 million pounds of zinc, respectively, in Q1 Fiscal 2018. As at June 30, 2018,
3 Non‐IFRS measure
inventories of silver‐lead concentrate were 5,650 tonnes (containing approximately 0.5 million ounces of silver and 6.2 million pounds of lead), an increase of 39% and 37%, respectively, compared to 4,070 tonnes and 4,111 tonnes of silver‐lead concentrate inventories as at March 31, 2018 and June 30, 2017, respectively.
In Q1 Fiscal 2019, the consolidated total mining costs and cash mining costs were $74.39 and $54.47 per tonne, up 9% and 8% compared to $68.12 and $50.29 per tonne, respectively, in Q1 Fiscal 2018, but below the annual guidance the Company announced in February 2018. The increase in cash mining costs compared to Q1 Fiscal 2018 was mainly due to: i) a $0.3 million increase in mining contractor costs as ore mined by the resuing mining method increased by 8% at the Ying Mining District; ii) a $0.4 million increase in mining preparation costs resulting from more underground drilling and preparation tunnelling expensed in the current quarter; iii) a $0.4 million increase in raw material supply costs; and iv) a $0.3 million increase in mining labour costs.
The consolidated total milling costs and cash milling costs in Q1 Fiscal 2019 were $14.16 and $11.73 per tonne, compared to $12.88 and $10.54 per tonne, respectively, in Q1 Fiscal 2018. The increase in cash milling costs was mainly due to a $0.2 million increase in raw material supply costs.
Correspondingly, the consolidated cash production costs per tonne of ore processed in Q1 Fiscal 2019 increased by 8% to $69.05 from $63.70 in the prior year quarter, but below the annual guidance the Company provided in February 2018.
In Q1 Fiscal 2019, the consolidated total production costs and cash costs per ounce of silver, net of by‐ product credits, were negative $4.29 and negative $7.54 compared to negative $0.62 and negative $3.57 respectively, in the prior year quarter. The overall improvement in cash cost per ounce of silver, net of by‐product credits, is mainly due to a 30% increase in by‐product credits, mainly arising from a 34% and 23% increase in lead and zinc net realized selling prices. Sales from lead and zinc accounted for 54% of the total sales and amounted to $24.5 million, an increase of $6.4 million, compared to $18.1 million in the prior year quarter.
The consolidated all‐in sustaining cost per ounce of silver, net of by‐product credits, is $0.41 compared to $4.70 in Q1 Fiscal 2018.
1. Ying Mining District, Henan Province, China
| Operational results ‐ Ying Mining District Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 | ||
|---|---|---|
| Ore Mined (tonne) Ore Milled (tonne) | 156,730 | 113,820 166,619 173,294 160,408 112,285 167,543 173,946 164,959 |
| 155,929 | ||
| Head Grades Silver (gram/tonne) Lead (%) Zinc (%) | 309 315 294 304 4.3 4.5 4.3 4.6 1.0 1.0 0.8 0.8 | |
| 323 | ||
| 4.5 | ||
| 1.1 | ||
| Recoveries Silver (%) Lead (%) Zinc (%) | 95.9 95.8 95.6 95.8 96.5 96.4 96.2 96.3 54.5 57.3 50.7 45.8 | |
| 96.0 | ||
| 96.3 | ||
| 54.5 | ||
| Metal Sales Silver (in thousands of ounce) Gold (in thousands of ounce) Lead (in thousands of pound) Zinc (in thousands of pound) | 1,319 1,322 1,472 1,324 0.7 0.7 0.8 0.9 12,649 13,487 15,279 13,765 1,106 2,006 2,269 755 | |
| 1,313 | ||
| 0.7 | ||
| 13,313 | ||
| 2,133 | ||
| Cash mining costs ($ per tonne) Total mining costs ($ per tonne) Cash milling costs ($ per tonne) Total milling costs ($ per tonne) | 63.49 | 65.88 66.71 59.67 54.78 92.81 90.12 81.20 76.67 12.59 9.84 8.50 8.07 15.80 11.87 10.45 10.10 |
| 89.57 | ||
| 10.30 | ||
| 12.60 | ||
| Cash production costs ($ per tonne) Cash costs per ounce of silver ($) All‐in sustaining costs per ounce of silver ($) | 78.10 | 82.84 80.60 71.85 66.93 (3.41) (4.53) (4.27) (2.97) 1.39 2.13 1.08 3.66 |
| (6.25) (0.28) |
In Q1 Fiscal 2019, the total ore mined at the Ying Mining District was 156,730 tonnes, a decrease of 2%, compared to 160,408 tonnes mined in the prior year quarter. The decrease was mainly due to a tailings leak incident reported on April 16, 2018 resulting in operating activities at the Ying Mining District being interrupted for more than fifteen days.
Head grades were 323 grams per ton (“g/t”) for silver, 4.5% for lead, and 1.1% for zinc, compared to 304 g/t for silver, 4.6% for lead and 0.8% 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 and the higher grade justified more use of the resuing mining method.
In Q1 Fiscal 2019, the Ying Mining District sold approximately 1.3 million ounces silver, 13.3 million pounds lead, and 2.1 million pounds zinc, compared to 1.3 million ounces silver, 13.8 million pounds lead, and 0.8 million pounds of zinc in the prior year quarter.
As at June 30, 2018, silver‐lead concentrate inventories at the Ying Mining District were 5,250 tonnes containing approximately 0.5 million ounces of silver and 6.0 million pounds of lead, an increase of 30% compared to 4,050 tonnes silver‐lead concentrate inventories as at March 31, 2018 and June 30, 2017.
Total and cash mining costs per tonne at the Ying Mining District in Q1 Fiscal 2019 were $89.57 and $63.49 per tonne, respectively, compared to $76.67 and $54.78 per tonne in the prior year quarter. The increase in cash mining costs was mainly due to: i) a $0.3 million increase in mining contractor costs as ore mined by the resuing mining method increased by 8%; ii) a $0.1 million increase in mining preparation costs mainly resulting from 4% more preparation tunnelling expensed; iii) a $0.4 million increase in raw material supply costs; and iv) a $0.2 million increase in mining labour costs.
Total and cash milling costs per tonne at the Ying Mining District in Q1 Fiscal 2019 were $12.60 and $10.30, compared to $10.10 and $8.07 in Q1 Fiscal 2018. The increase in cash milling costs was mainly due to: i) a $0.1 million increase in labour costs; ii) a $0.1 million increase in raw material costs; and iii) higher per tonne fixed costs allocation resulting from lower ore milled and the leakage incident.
Correspondingly, cash production cost per tonne of ore processed in Q1 Fiscal 2019 at the Ying Mining District was $78.10, compared to $66.93 in the prior year quarter.
Cash cost per ounce of silver, net of by‐product credits, in Q1 Fiscal 2019 at the Ying Mining District, was negative $6.25 compared to negative $2.97 in the prior year quarter. The improvement was mainly due to a $5.1 million or 37% increase in by‐product credits offset by the increase in the per tonne cash production costs as discussed above.
All‐in sustaining costs per ounce of silver, net of by‐product credits, in Q1 Fiscal 2019 at the Ying Mining District was negative $0.28 compared to $3.66 in the prior year quarter. The improvement was mainly due to lower cash cost per ounce of silver as discussed above.
In Q1 Fiscal 2019, approximately 26,849 metres or $0.6 million worth of underground diamond drilling (Q1 Fiscal 2018 – 31,064 metres or $0.7 million) and 5,541 metres or $1.6 million worth of preparation tunnelling (Q1 Fiscal 2018 – 5,337 metres or $1.4 million) were completed and expensed as mining preparation costs at the Ying Mining District. In addition, approximately 16,928 metres or $6.0 million worth of horizontal tunnel, raises, ramps, and declines (Q1 Fiscal 2018 – 18,890 metres or $5.2 million) were completed and capitalized.
2. GC Mine, Guangdong Province, China
| Operational results ‐ GC Mine Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 June 30, 2018 March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 | ||
|---|---|---|
| Ore Mined (tonne) Ore Milled (tonne) | 79,967 | 29,442 85,665 65,812 64,865 26,252 88,494 63,648 65,944 |
| 81,811 | ||
| Head Grades Silver (gram/tonne) Lead (%) Zinc (%) | 96 97 102 98 1.3 1.4 1.4 1.6 2.9 2.8 2.8 2.7 | |
| 87 | ||
| 1.3 | ||
| 2.9 | ||
| Recovery Rates Silver (%) Lead (%) Zinc (%) | 76.3 73.6 74.4 81.2 87.5 83.9 82.8 88.8 85.7 81.3 81.6 80.9 | |
| 75.3 | ||
| 87.1 | ||
| 84.8 | ||
| Metal Sales Silver (in thousands of ounce) Lead (in thousands of pound) Zinc (in thousands of pound) | 63 196 155 189 688 2,263 1,656 2,147 1,479 4,399 3,311 4,244 | |
| 150 | ||
| 1,583 | ||
| 4,244 | ||
| Cash mining cost ($ per tonne) Total mining cost ($ per tonne) Cash milling cost ($ per tonne) Total milling cost ($ per tonne) | 36.78 | 45.92 35.48 34.60 39.20 57.47 43.10 42.62 46.99 25.07 14.09 14.63 16.73 33.41 16.45 17.90 19.85 |
| 44.62 | ||
| 14.46 | ||
| 17.14 | ||
| Cash production cost ($ per tonne) Cash cost per ounce of silver ($) All‐in sustaining cost per ounce of silver ($) | 51.24 | 70.99 49.57 49.23 55.93 (13.95) (15.34) (13.56) (7.80) (4.57) (4.52) (3.77) (2.48) |
| (18.81) | ||
| (11.36) |
In Q1 Fiscal 2019, the total ore mined at the GC Mine was 79,967 tonnes, an increase of 23% compared to 64,865 tonnes mined in the prior year quarter, while ore milled increased by 24% to 81,811 tonnes from 65,944 tonnes in the prior year quarter. Head grades were 87 g/t for silver, 1.3% for lead, and 2.9% for zinc compared to 98 g/t for silver, 1.6% for lead, and 2.7% for zinc in the prior year quarter.
In Q1 Fiscal 2019, GC Mine sold approximately 150 thousand ounces of silver, 1.6 million pounds of lead, and 4.2 million pounds of zinc, compared to 189 thousand ounces of silver, 2.1 million pounds of lead, and 4.2 million pounds of zinc sold in the prior year quarter.
Total and cash mining costs per tonne at the GC Mine in Q1 Fiscal 2019 were $44.62 and $36.78 per tonne, a decrease of 5% and 6% respectively, compared to $46.99 and $39.20 per tonne in Q1 Fiscal 2018. Total and cash milling costs per tonne at the GC Mine in Q1 Fiscal 2019 were $17.14 and $14.46, compared to $19.85 and $16.73, respectively, in Q1 Fiscal 2018. The decrease in cash mining costs and cash milling costs was mainly due to lower per tonne fixed costs allocation resulting from the increase in ore mined and milled.
The cash production cost per tonne of ore processed in Q1 Fiscal 2019 at the GC Mine was $51.24, a decrease of 8% compared to $55.93 in the prior year quarter.
Cash costs per ounce of silver, net of by‐product credits, at the GC Mine, was negative $18.81 compared to negative $7.80 in the prior year quarter. The improvement was mainly due to the 8% improvement in cash production costs per tonne as discussed above and an increase of $0.7 million in by‐product credits at the GC Mine.
All in sustaining costs per ounce of silver, net of by‐product credits, in Q1 Fiscal 2019 at the GC Mine was negative $11.36 compared to negative $2.48 in the prior year quarter, and the improvement was mainly due to the improvement in the cash costs, per ounce of silver, net of by‐product credits as discussed above.
In Q1 Fiscal 2019, approximately 7,999 metres or $0.4 million worth of underground diamond drilling (Q1 Fiscal 2018 – 4,972 metres or $0.3 million) and 5,241 metres or $1.6 million worth of tunnelling (Q1 Fiscal 2018 – 5,292 metres or $1.3 million) were completed and expensed as mining preparation costs at the GC Mine. In addition, approximately 538 metres or $0.5 million worth of horizontal tunnel, raises, ramps and declines (Q1 Fiscal 2018 –158 metres or $0.1 million) were completed and capitalized.
Mr. Guoliang Ma, P.Geo., Manager of Exploration and Resource of the Company, is the Qualified Person for Silvercorp under 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 | and are also available on the | ||
| Company's website at | www.silvercorp.ca | . |
About Silvercorp
Silvercorp is a low‐cost silver‐producing Canadian mining company with multiple mines in China. The Company's vision is to deliver shareholder value by focusing on the acquisition of underdeveloped projects with resource potential and the ability to grow organically. For more information, please visit our website at www.silvercorp.ca.
For further information
Silvercorp Metals Inc.
Lorne Waldman Senior Vice President Phone: (604) 669‐9397 Toll Free 1(888) 224‐1881 Email: [email protected] 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; 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 for the year ended March 31, 2017 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.
Consolidated Statements of Financial Position
As at June 30, As at March 31, 2018 2018
ASSETS Current Assets
Cash and cash equivalents $ 72,869 $ 49,199
| Short‐term investments | 41,949 | 56,910 |
| Trade and other receivables | 480 | 676 |
| Inventories | 13,304 | 11,018 |
| Due from a related party | 19 | 11 |
| Income tax receivable | ‐ | 534 |
| Prepaids and deposits | 5,283 | 4,456 |
133,904 122,804
Non‐current Assets
| Long‐term prepaids and deposits | 1,015 | 954 |
| Reclamation deposits | 5,431 | 5,712 |
| Investment in an associate | 37,191 | 38,001 |
| Other investments | 6,108 | 6,132 |
| Plant and equipment | 68,105 | 71,211 |
| Mineral rights and properties | 222,862 | 232,080 |
TOTAL ASSETS $
474,616 $ 476,894
LIABILITIES AND EQUITY Current Liabilities
Accounts payable and accrued liabilities $ 30,044 $ 25,198
| Bank loan | 4,541 | ‐ |
| Deposits received | 2,953 | 6,806 |
| Income tax payable | 2,215 | 303 |
39,753 32,307
Non‐current Liabilities
| Deferred income tax liabilities | 32,175 | 33,310 |
| Environmental rehabilitation | 12,563 | 13,098 |
| Total Liabilities | 84,491 | 78,715 |
Equity
| Share capital | 229,416 | 228,729 |
| Share option reserve | 14,961 | 14,690 |
| Reserves | 25,409 | 25,409 |
| Accumulated other comprehensive loss | (39,500) | (25,875) |
| Retained earnings | 95,109 | 86,283 |
| Total equity attributable to the equity holders of the Company | 325,395 | 329,236 |
| Non‐controlling interests | 64,730 | 68,943 |
| Total Equity | 390,125 | 398,179 |
TOTAL LIABILITIES AND EQUITY $
474,616 $ 476,894
Consolidated Statements of Income
(Unaudited ‐ Expressed in thousands of U.S. dollars, except for per share figures)
Three Months Ended June 30, 2018 2017
Sales $
45,125 $ 39,697
Cost of sales
| Production costs | 14,277 | 14,109 |
| Mineral resource taxes | 1,249 | 1,111 |
| Depreciation and amortization | 4,748 | 4,472 |
20,274 19,692
| Gross profit | 24,851 | 20,005 |
| General and administrative | 4,472 | 4,570 |
| Government fees and other taxes | 802 | 841 |
| Foreign exchange (gain) loss | (788) | 1,615 |
| Loss on disposal of plant and equipment | 10 | 170 |
‐ (4,320) Gain on disposal of NSR
| Share of loss in associate | 279 | 244 |
| Other expense (income) | 63 | (181) |
| Income from operations | 20,013 | 17,066 |
| Finance income | 796 | 574 |
| Finance costs | (134) | (105) |
| Income before income taxes | 20,675 | 17,535 |
| Income tax expense | 6,498 | 4,021 |
Net income $
14,177 $ 13,514
Attributable to:
10,921 $ Equity holders of the Company $ 10,937 Non‐controlling interests 3,256 2,577
$
14,177 $ 13,514
Earnings per share attributable to the equity holders of the Company Basic earnings per share $
0.07 $ 0.07 Diluted earnings per share $ 0.06 $ 0.06 Weighted Average Number of Shares Outstanding ‐ Basic 167,263,945 167,890,187 Weighted Average Number of Shares Outstanding ‐ Diluted 170,230,705 169,784,602
Consolidated Statements of Cash Flow
Three Months Ended June 30, 2018 2017
Cash provided by Operating activities
Net income $ 14,177 $ 13,514 Add (deduct) items not affecting cash:
| Finance costs | 134 | 105 |
| Depreciation, amortization and depletion | 5,053 | 4,752 |
| Share of loss (income) in associate | 279 | 244 |
| Gain on disposal of NSR | ‐ | (4,320) |
| Income tax expense | 6,498 | 4,021 |
| Finance income | (796) | (574) |
| Loss on disposal of plant and equipment | 10 | 170 |
| Share‐based compensation | 456 | 403 |
| Reclamation | (4) | (4) |
| Income taxes paid | (3,088) | (4,137) |
| Interest received | 796 | 574 |
| Changes in non‐cash operating working capital | (2,367) | 2,144 |
| Net cash provided by operating activities | 21,148 | 16,892 |
Investing activities
Mineral rights and properties Capital expenditures (5,729) (5,911) Plant and equipment
| Additions | (1,221) | (1,211) |
| Proceeds on disposals | 27 | ‐ |
| Net redemption (purchases) of short‐term investments | 13,262 | (3,704) |
| Net cash used in investing activities | 6,339 | (10,826) |
Financing activities
Bank loan Proceeds 4,527 ‐ Non‐controlling interests
| Distribution | (3,329) | (4,891) |
| Cash dividends distributed | (2,095) | (1,679) |
| Proceeds from issuance of common shares | 502 | 3 |
| Net cash used in financing activities | (395) | (6,567) |
| Effect of exchange rate changes on cash and cash equivalents | (3,422) | 1,798 |
| Increase in cash and cash equivalents | 23,670 | 1,297 |
| Cash and cash equivalents, beginning of the period | 49,199 | 73,003 |
Cash and cash equivalents, end of the period $ 72,869 $ 74,300
| Three months ended June 30, 2018 | ||
| Ying Mining District1 | GC2 | Consolidated |
| Ore Mined (tonne) | 156,730 | 79,967 | 236,697 |
| Ore Milled (tonne) | 155,929 | 81,811 | 237,740 |
| + Mining cost per tonne of ore mined ($) | 89.57 | 44.62 | 74.39 |
| Cash mining cost per tonne of ore mined ($) | 63.49 | 36.78 | 54.47 |
| Non cash mining cost per tonne of ore mined ($) | 26.08 | 7.84 | 19.92 |
| + Unit shipping costs($) | 4.31 | ‐ | 2.85 |
| + Milling cost per tonne of ore milled ($) | 12.60 | 17.14 | 14.16 |
| Cash milling cost per tonne of ore milled ($) | 10.30 | 14.46 | 11.73 |
| Non cash milling cost per tonne of ore milled ($) | 2.30 | 2.68 | 2.43 |
+ Average Production Cost
| Silver ($ per ounce) | 5.42 | 5.65 | 5.71 |
| Gold ($ per ounce) | 383 | ‐ | 417 |
| Lead ($ per pound) | 0.44 | 0.65 | 0.48 |
| Zinc ($ per pound) | 0.46 | 0.66 | 0.49 |
| Other ($ per pound) | 0.48 | ‐ | 0.02 |
| + Total production cost per ounce of Silver, net of by‐product credits ($) | (3.26) | (13.28) | (4.29) |
| + Total cash cost per ounce of Silver, net of by‐product credits ($) | (6.25) | (18.81) | (7.54) |
| + All‐in sustaining cost per ounce of Silver, net of by‐product credits ($) | (0.28) | (11.36) | 0.41 |
| + All‐in cost per ounce of Silver, net of by‐product credits ($) | 0.81 | (11.36) | 1.55 |
Recovery Rates
| Silver (%) | 96.0 | 75.3 | 93.4 |
| Lead (%) | 96.3 | 87.1 | 95.1 |
| Zinc (%) | 54.5 | 84.8 | 72.3 |
Head Grades
| Silver (gram/tonne) | 323 | 87 | 242 |
| Lead (%) | 4.5 | 1.3 | 3.4 |
| Zinc (%) | 1.1 | 2.9 | 1.7 |
Concentrate in stock Lead concentrate (tonne) 5,250 400 5,650 Zinc concentate (tonne) 200 180 380
Sales Data Metal Sales
| Silver (in thousands of ounces) | 1,313 | 150 | 1,463 |
| Gold (in thousands of ounces) | 0.7 | ‐ | 0.7 |
| Lead (in thousands of pounds) | 13,313 | 1,583 | 14,896 |
| Zinc (in thousands of pounds) | 2,133 | 4,244 | 6,377 |
| Other (in thousands of pounds) | 108 | 3,794 | 3,902 |
Metal Sales
| Silver (in thousands of $) | 18,350 | 1,473 | 19,823 |
| Gold (in thousands of $) | 692 | ‐ | 692 |
| Lead (in thousands of $) | 15,275 | 1,776 | 17,051 |
| Zinc (in thousands of $) | 2,516 | 4,896 | 7,412 |
| Other (in thousands of $) | 134 | 13 | 147 |
| 36,967 | 8,158 | 45,125 |
Average Selling Price, Net of Value Added Tax and Smelter Charges
| Silver ($ per ounce) | 13.98 | 9.82 | 13.55 |
| Gold ($ per ounce) | 989 | ‐ | 989 |
| Lead ($ per pound) | 1.15 | 1.12 | 1.14 |
| Zinc ($ per pound) | 1.18 | 1.15 | 1.16 |
1 Ying Mining District includes mines: SGX, TLP, HPG,LM, BCG and HZG.
2 GC Silver recovery rate consists of 49.6% from lead concentrates and 25.7% from zinc concentrates.
2 GC Silver sold in zinc concentrates is subjected to higher smelter and refining charges which lowers the net silver selling price.
| Three months ended June 30, 2017 | ||
| Ying Mining District1 | GC2 | Total |
| Ore Mined(tonne) | 160,408 | 64,865 | 225,273 |
| Ore Milled(tonne) | 164,959 | 65,944 | 230,903 |
| + Mining cost per tonne of ore mined($) | 76.67 | 46.99 | 68.12 |
| Cash mining cost per tonne of ore mined($) | 54.78 | 39.20 | 50.29 |
| Non cash mining cost per tonne of ore mined($) | 21.89 | 7.79 | 17.83 |
| + Unit shipping costs($) | 4.08 | ‐ | 2.87 |
| + Milling cost per tonne of ore milled($) | 10.10 | 19.85 | 12.88 |
| Cash milling cost per tonne of ore milled($) | 8.07 | 16.73 | 10.54 |
| Non cash milling cost per tonne of ore milled($) | 2.03 | 3.12 | 2.34 |
+ Average Production Cost
| Silver($ per ounce) | 5.74 | 7.03 | 6.24 |
| Gold($ per ounce) | 445 | ‐ | 499 |
| Lead($ per pound) | 0.35 | 0.56 | 0.40 |
| Zinc($ per pound) | 0.41 | 0.62 | 0.44 |
| Other($ per pound) | 0.34 | 0.02 | 0.02 |
| + Total production cost per ounce of Silver, net of by‐product credits ($) | (0.23) | (3.33) | (0.62) |
| + Total cash cost per ounce of Silver, net of by‐product credits ($) | (2.97) | (7.80) | (3.57) |
| + All‐in sustaining cost per ounce of Silver, net of by‐product credits ($) | 3.66 | (2.48) | 4.70 |
| + All‐in cost per ounce of Silver, net of by‐product credits ($) | 3.96 | 0.51 | 5.33 |
Recovery Rates
| Silver (%) | 95.8 | 81.2 | 94.1 |
| Lead(%) | 96.3 | 88.8 | 95.4 |
| Zinc (%) | 45.8 | 80.9 | 66.2 |
Head Grades
| Silver (gram/tonne) | 304 | 98 | 245 |
| Lead(%) | 4.6 | 1.6 | 3.7 |
| Zinc(%) | 0.8 | 2.7 | 1.3 |
Concentrate in stock
Lead concentrate (tonne) 4,050 61 4,111 Zinc concentate (tonne) 980 237 1,217
Sales Data Metal Sales
| Silver(in thousands of ounces) | 1,324 | 189 | 1,513 |
| Gold(in thousands of ounces) | 0.9 | ‐ | 0.9 |
| Lead (in thousands of pounds) | 13,765 | 2,147 | 15,912 |
| Zinc(in thousands of pounds) | 755 | 4,244 | 4,999 |
| Other(in thousands of pound) | 254 | 7,902 | 8,156 |
Metal Sales
| Silver(in thousands of $) | 18,204 | 1,979 | 20,183 |
| Gold(in thousands of $) | 959 | ‐ | 959 |
| Lead(in thousands of $) | 11,647 | 1,801 | 13,448 |
| Zinc (in thousands of $) | 739 | 3,942 | 4,681 |
| Other(in thousands of $) | 208 | 218 | 426 |
| 31,757 | 7,940 | 39,697 |
Average Selling Price, Net of Value Added Tax and Smelter Charges
| Silver($ per ounce) | 13.75 | 10.47 | 13.34 |
| Gold($ per ounce) | 1,066 | ‐ | 1,066 |
| Lead($ per pound) | 0.85 | 0.84 | 0.85 |
| Zinc($ per pound) | 0.98 | 0.93 | 0.94 |
1 Ying Mining District includes mines: SGX, TLP, HPG,LM, BCG and HZG.
2 GC Silver recovery rate consists of 60.5% from lead concentrates and 20.8% from zinc concentrates.
2 GC Silver sold in zinc concentrates is subjected to higher smelter and refining charges which lower the net silver selling price.
+ Mineral resouces tax was excluded from production costs, but presented as a separate line item on the consolidated statements of income