SVM.TO · 2018-05-24 12:00:00

AL YEAR 2018 Net income compared to the prior yea share after a attributable t Gross margin Sales of $170 Silver, lead, a

Financials

NEW

Trad

VANC

(TSX:

twelv

FISCA



Earn

² Non

WS RELEASE

ing Symbol:

SILVERCORP

COUVER, Briti

: SVM) (NYSE

ve months end

AL YEAR 2018

Net income

compared to

the prior yea

share after a

attributable t

Gross margin

Sales of $170

Silver, lead, a

pounds of le

million pound

lead sold wa

concentrate s

Total and cas

and $46.07 in

Cash cost pe

$3.09 in the p

All‐in sustain

the prior yea

Spent $4.2 m

Paid $3.4 mil

Invested $23

Ended the fis

an increase o

ings per share ref

IFRS measure, ple

TSX: SVM

NYSE AMER

P REPORTS NE

ish Columbia

American: SV

ded March 31

8 HIGHLIGHTS

attributable

net income a

r. Adjusted ne

djustment of

to equity share

n of 52% comp

0.0 million, up

and zinc metal

ead, and 19.6

ds of lead, an

s mainly due

stood at 4,070

sh mining cost

n the prior yea

r ounce of sil

prior year;

ing cost per o

million to buyba

lion of dividen

.4 million to p

scal year with

of $9.6 million

fers to basic earn

ease refer to sect

ICAN: SVM

ET INCOME O

– May 24, 20

VM) reported

1, 2018. All am

to equity sh

attributable to

et income attr

impairment r

eholders of $3

pared with 54%

4% compared

ls sold amoun

6 million poun

d 18.3 million

to silver‐lead

0 tonnes (cont

ts per tonne o

ar;

lver2, net of b

ounce of silve

ack 1,717,100

nds to equity s

participate in a

$106.1 millio

or 10% comp

ings per share

tion 12 of the corr

OF $47.0 MILL

018 – Silverco

its financial a

mounts are ex

hareholders o

o equity share

ributable to eq

reversal and d

38.6 million or

% in the prior

d to $163.5 mi

ted to approx

nds of zinc, c

n pounds of zi

d concentrate

taining approx

ore2 of $73.48

by‐product cre

r2, net of by‐p

0 common sha

shareholders o

a private place

on in cash and

ared to $96.5

responding MD&A

LION, $0.28 PE

rp Metals Inc

nd operating

pressed in US

f $47.0 millio

eholders of $4

quity sharehol

dilution gain, c

r $0.23 per sh

year;

illion in the pr

ximately 6.0 m

compared to

nc in the prio

inventory bu

ximately 0.4 m

8 and $54.60,

edits, of nega

product credit

ares of the Com

of the Compan

ement of New

d cash equival

million as at M

A for reconciliatio

ER SHARE, FO

c. (“Silvercorp”

results for th

Dollars.

on, or $0.28

43.7 million, o

lders2 of $41.5

compared to

are in the prio

rior year;

million ounces

6.5 million ou

r year. The d

ilt up as inve

million ounces

respectively,

ative $4.73, co

ts, of $3.27, c

mpany;

ny;

w Pacific Metal

lents and sho

March 31, 201

OR FISCAL 201

” or the “Com

e fourth quar

per share1,

or $0.26 per s

5 million or $0

adjusted net

or year;

of silver, 61.9

unces of silve

ecrease of silv

ntories of silv

of silver);

compared to

ompared to n

compared to $

s Corp.; and

rt‐term invest

17.

mpany”)

rter and

up 8%

share in

0.25 per

income

million

er, 70.5

ver and

ver‐lead

$64.16

negative

$3.82 in

tments,

HIGHLIGHTS FOR THE FOURTH QUARTER FISCAL 2018 (“Q4 FISCAL 2018”)

 Net income attributable to equity shareholders of $12.2 million, or $0.07 per share in Q4 Fiscal 2018,

compared to $13.5 million, or $0.08 per share in Q4 Fiscal 2017. The adjusted net income

attributable to equity shareholders was $7.5 million, or $0.04 per share in Q4 Fiscal 2018 , after

adjustment of impairment reversal of $4.7 million (Q4 Fiscal 2017 ‐ $5.3 million), compared to $8.2

million or $0.05 per share in Q4 Fiscal 2017;

 Gross margin of 50% compared with 60% in the prior year quarter;

 Sales of $38.4 million, up 13% compared to $34.1 million in the prior year quarter;

 Silver, lead, and zinc metals sold amounted to approximately 1.4 million ounces of silver, 13.3 million

pounds of lead, and 2.6 million pounds of zinc, compared to 1.3 million ounces of silver, 14.3 million

pounds of lead, and 1.5 million pounds of zinc in the prior year quarter;

 Head grades were 309 g/t for silver, 4.3% for lead, and 1.0% for zinc at the Ying Mining District,

compared to 298 g/t for silver, 4.8% for lead and 0.8% for zinc in the prior year quarter;

 Total and cash mining costs per tonne ore of $85.55 and $61.78, respectively, compared to $51.37

and $46.82 in the prior year quarter;

 Cash cost per ounce of silver, net of by‐product credits, of negative $3.89, compared to negative

$3.65 in the prior year quarter;

 All‐in sustaining cost per ounce of silver, net of by‐product credits, of $3.04, compared to $3.26 in

the prior year quarter; and

 Spent $2.4 million to buyback 929,100 common shares of the Company.

FINANCIALS

1. Fiscal 2018 vs. Fiscal 2017

Net income attributable to the shareholders of the Company in Fiscal 2018 was $47.0 million, or $0.28

per share, up 8% compared to $43.7 million, or $0.26 per share in Fiscal 2017. The adjusted net income

attributable to the shareholders of the Company was $41.5 million, or $0.25 per share after adjustments

of impairment reversal and dilution gain, compared to the adjusted net income of $38.6 million, or $0.23

per share in Fiscal 2017.

Sales in Fiscal 2018 were $170.0 million, up 4% compared to $163.5 million in Fiscal 2017. Silver and gold

sales represented $82.4 million and $3.2 million, respectively, while base metals represented $84.5

million of total sales compared to silver, gold and base metal sales of $89.6 million, $3.3 million, and $70.6

million, respectively, in Fiscal 2017.

In Fiscal 2018, the Company’s consolidated financial results were mainly impacted by the following: i) an

increase of 25% and 53%, in net realized selling prices for lead and zinc; ii) a decrease of 1% in net realized

selling price for silver, iii) less silver and lead sold as inventory built up; and iv) higher per tonne

production costs.

As at March 31, 2018, silver‐lead concentrate inventories were 4,070 tonnes containing approximately 0.4

million ounces of silver and 4.2 million pounds of lead, an increase of 63% or 1,579 tonnes, compared to

2,491 tonnes silver‐lead concentrate inventories containing approximately 0.2 million ounces of silver and

2.8 million pounds of lead held as at March 31, 2017.

Cost of sales in Fiscal 2018 was $82.2 million compared to $75.3 million in Fiscal 2017. The cost of sales

included $59.1 million cash production costs (Fiscal 2017 ‐ $53.8 million), $4.8 million mineral resource

tax (Fiscal 2017 ‐ $3.8 million), and $18.2 million depreciation, amortization and depletion charges (Fiscal

2017 ‐ $17.7 million).

Gross profit margin in Fiscal 2018 was 52% compared to 54% in Fiscal 2017. Ying Mining District’s gross

profit margin was 55% compared to a 57% gross profit margin in the prior year, while GC Mine’s gross

profit margin was 36% compared to a 31% gross profit margin in the prior year.

General and administrative expenses in Fiscal 2018 were $18.7 million, an increase of 11% compared to

$16.8 million in Fiscal 2017. The increase was mainly due to increased compensation to management and

employees and increased costs of administration related to the resumption of activities at the XHP project

and the BYP Mine.

Income tax expenses in Fiscal 2018 were $18.9 million, compared to $19.2 million in Fiscal 2017. The

income tax expense recorded in Fiscal 2018 included current income tax expense of $16.1 million (Fiscal

2017 ‐ $13.1 million) and deferred income tax expenses of $2.8 million (Fiscal 2017 ‐ $6.1 million).

Cash flows provided by operating activities in Fiscal 2018 were $67.9 million, a decrease of $9.6 million

or 12%, compared to $77.5 million in the prior year. Before changes in non‐cash operating working

capital, cash flows provided by operating activities in Fiscal 2018 were $70.5 million, a decrease of $2.5

million or 3%, compared to $73.0 million in the prior year. The decrease was mainly due to increased

income taxes paid in Fiscal 2018.

The Company ended the fiscal year with $106.1 million in cash and short term investments, an increase of

$9.6 million or 10% compared to $96.5 million as at March 31, 2017.

Working capital as at March 31, 2018 was $90.5 million, an increase of $19.8 million or 28%, compared to

$70.7 million working capital as at March 31, 2017.

2. Q4 Fiscal 2018 vs. Q4 Fiscal 2017

Net income attributable to equity shareholders of the Company in Q4 Fiscal 2018 was $12.2 million, or

$0.07 per share compared to $13.5 million, or $0.08 per share in Q4 Fiscal 2017. The adjusted net income

attributable to equity shareholders was $7.5 million, or $0.04 per share in Q4 Fiscal 2018, after

adjustment of impairment reversal of $4.7 million (Q4 Fiscal 2017 ‐ $5.3 million), compared to $8.2 million

or $0.05 per share in Q4 Fiscal 2017.

The Company’s consolidated financial results in Q4 Fiscal 2018 were mainly impacted by the following: i)

an increase of 2%, 16%, and 35% in the net realized selling prices for silver, lead and zinc, respectively,

compared to the prior year quarter; ii) an increase of 6% and 74% in silver and zinc sold; and iii) higher per

tonne production costs.

Sales in Q4 Fiscal 2018 were $38.4 million, up 13% compared to $34.1 million in Q4 Fiscal 2017. Silver and

gold sales represented $19.8 million and $0.8 million, respectively, while base metals represented $17.9

million of total sales compared to silver, gold and base metals of $18.3 million, $0.7 million, and $15.1

million, respectively, in the prior year quarter.

Cost of sales in Q4 Fiscal 2018 was $19.3 million compared to $13.8 million in Q4 Fiscal 2017. The cost of

sales included $13.3 million cash production costs (Q4 Fiscal 2017 ‐ $11.0 million), $1.1 million mineral

resource taxes (Q4 Fiscal 2017 ‐ $1.0 million), and $5.0 million depreciation, amortization and depletion

charges (Q4 Fiscal 2017 ‐ $1.8 million).

Gross profit margin in Q4 Fiscal 2018 decreased to 50%, compared to 60% in Q4 Fiscal 2017.

Cash flows provided by operating activities in Q4 Fiscal 2018 were $2.9 million compared to $4.1 million

in Q4 Fiscal 2017. Before changes in non‐cash operating working capital, cash flows provided by operating

activities in the current quarter were $11.1 million, an increase of $2.9 million, compared to $8.2 million

in the prior year quarter.

OPERATIONS AND DEVELOPMENT

1. Fiscal 2018 vs. Fiscal 2017

On a consolidated basis, the Company mined 859,924 tonnes of ore in Fiscal 2018, a decrease of 4% or

37,582 tonnes, compared to 897,506 tonnes in Fiscal 2017. Correspondingly, ore milled decreased by 4%

or 35,837 tonnes to 863,070 tonnes, compared to 898,907 tonnes in Fiscal 2017. Ore mined at the Ying

Mining District decreased by 4% or 22,619 tonnes to 614,141 tonnes from 636,760 tonnes in Fiscal 2017.

In Fiscal 2018, at the Ying Mining District, approximately 5,000 tonnes of ore production were affected by

the power downtime arising from power grid update work by the State Grid Corporation of China and

approximately 15,000 tonnes of ore production were affected by public safety measures, such as

explosive supply limitation and temporary suspension of mining activities, brought by the local

governments for the 19th National Congress of Communist Party of China.

In Fiscal 2018, the Company sold 6.0 million ounces of silver, 3,100 ounces of gold, 61.9 million pounds of

lead, and 19.6 million pounds of zinc, compared to 6.5 million ounces of silver, 3,300 ounces of gold, 70.5

million pounds of lead, and 18.3 million pounds of zinc, respectively, in Fiscal 2017. The decrease of silver

and lead sold was mostly due to silver‐lead concentrate inventory built up.

The consolidated total mining costs and cash mining costs were $73.48 and $54.60 per tonne,

respectively, in Fiscal 2018, an increase of 15% and 19% compared to $64.16 and $46.07 per tonne,

respectively, in Fiscal 2017. The increase in cash mining costs were mainly due to: i) a $2.6 million

increase in mining preparation costs resulting from more underground tunnelling being expensed in Fiscal

2018, ii) a $2.0 million increase in raw material supply costs, and iii) a $0.6 million increase in mining labor

costs.

The consolidated total milling costs and cash milling costs were $13.82 and $11.25 per tonne,

respectively, in Fiscal 2018, an increase of 6% and 6% compared to $13.04 and $10.57 per tonne,

respectively, in Fiscal 2017. The increase in milling costs was mainly due to a $0.5 million increase in raw

material costs.

The consolidated total production costs and cash costs per ounce of silver, net of by‐product credits, were

negative $1.70 and negative $4.73, respectively, in Fiscal 2018, compared to negative $0.37 and negative

$3.09 respectively, in the prior year. The overall improvement in cash cost per ounce of silver, net of by‐

product credits, is mainly due to a 19% increase in by‐product credits, mainly arising from a 25% and 53%

increase in lead and zinc realized selling prices, offset by 12% decrease in lead metals sold. Sales from lead

and zinc accounted for 49% of the total sales and amounted to $83.7 million, an increase of $13.6 million,

compared to $70.1 million in the prior year.

The consolidated all‐in sustaining costs per ounce of silver, net of by‐product credits, is $3.27 in Fiscal

2018, compared to $3.82 in Fiscal 2017.

2. Q4 Fiscal 2018 vs. Q4 Fiscal 2017

The Company mined 143,262 tonnes of ore in Q4 Fiscal 2018, a decrease of 6% or 9,717 tonnes,

compared to 152,979 tonnes in Q4 Fiscal 2017. Correspondingly, ore milled decreased by 6% or 9,443

tonnes to 138,537 tonnes, compared to 147,980 tonnes in Q4 Fiscal 2017. Ore mined at the Ying Mining

District in Q4 Fiscal 2018 was comparable to the production in the prior year quarter, but ore mined at the

GC Mine decreased by 10,782 tonnes.

In Q4 Fiscal 2018, approximately 1.4 million ounces of silver, 700 ounces of gold, 13.3 million pounds of

lead, and 2.6 million pounds of zinc were sold compared to 1.3 million ounces of silver, 700 ounces of

gold, 14.3 million of lead, and 1.5 million pounds of zinc sold in the prior year quarter.

The consolidated total mining and cash mining costs were $85.55 and $61.78 per tonne, respectively, in

Q4 Fiscal 2018, compared to $51.37 and $46.82 per tonne, respectively, in the same prior year period

while the consolidated total milling costs and cash milling costs were $19.14 and $14.96 per tonne,

respectively, in Q4 Fiscal 2018, compared to $16.68 and $13.03 per tonne, respectively, in Q4 Fiscal 2017.

The consolidated cash production costs and all‐in sustaining costs per ounce of silver, net of by‐product

credits, were negative $3.89 and $3.04, respectively, in Q4 Fiscal 2018, compared to negative $3.65 and

$3.26, respectively, in Q4 Fiscal 2017.

3. Ying Mining District, Henan Province, China

i) Fiscal 2018 vs. Fiscal 2017

In Fiscal 2018, the total ore mined at the Ying Mining District was 614,141 tonnes, a decrease of 4% or

22,619 tonnes, compared to 636,760 tonnes mined in Fiscal 2017. Correspondingly, ore milled in Fiscal

2018 decreased by 3% to 618,732 tonnes from 638,211 tonnes in the prior year.

Head grades were 305 g/t for silver, 4.4% for lead, and 0.9% for zinc, compared to 303 g/t for silver, 4.7%

for lead and 1.0% for zinc in the prior year. The Company continues to achieve improvements in dilution

control using its “Enterprise Blog” to manage daily operations.

In Fiscal 2018, the Ying Mining District sold approximately 5.4 million ounces silver, 55.2 million pounds of

lead, and 6.1 million pounds of zinc, compared to 5.9 million ounces of silver, 63.4 million pounds of lead,

and 5.8 million pounds of zinc in the prior year. The decrease of silver and lead sold was mostly due to

silver‐lead concentrate inventory built up.

As at March 31, 2018, silver‐lead concentrate inventories at the Ying Mining District were 4,050 tonnes

containing approximately 0.4 million ounces of silver and 4.2 million pounds of lead, an increase of 77% or

1,757 tonnes, compared to 2,293 tonnes silver‐lead concentrate inventories containing approximately 0.2

million ounces of silver and 2.6 million pounds of lead held as at March 31, 2017.

Total and cash mining costs at the Ying Mining District were $84.59 and $61.46 per tonne, respectively, in

Fiscal 2018, compared to $74.04 and $51.79 per tonne, respectively, in Fiscal 2017. The increase in cash

mining costs were mainly due to: i) a $2.0 million increase in raw material supply costs, ii) a $1.7 million

increase in mining preparation costs resulting from more underground drilling and tunnelling being

expensed in Fiscal 2018, and iii) a $0.5 million increase in mining labour costs.

Total and cash milling costs at the Ying Mining District were $11.71 and $9.49 per tonne, respectively, in

Fiscal 2018, compared to $11.26 and $9.03 per tonne, respectively, in Fiscal 2017. The increase in cash

milling costs was mainly due to a 15% increase in raw material supply costs.

Correspondingly, cash production cost per tonne of ore processed in Fiscal 2018 at the Ying Mining

District was $74.96, an increase of 16% compared to $64.70 in the prior year.

Operational results ‐ Ying Mining District

Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017

March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 2018 2017*

Ore Mined (tonne) 113,820 166,619 173,294 160,408 112,755 614,141 636,760

Ore Milled (tonne) 112,285 167,543 173,946 164,959 108,051 618,732 638,211

Head Grades

Silver (gram/tonne) 309 315 294 304 298 305 303

Lead (%) 4.3 4.5 4.3 4.6 4.8 4.4 4.7

Zinc (%) 1.0 1.0 0.8 0.8 0.8 0.9 1.0

Recoveries

Silver (%) 95.9 95.8 95.6 95.8 96.6 95.7 95.5

Lead (%) 96.5 96.4 96.2 96.3 95.6 96.3 96.5

Zinc (%) 54.5 57.3 50.7 45.8 46.2 52.3 46.0

Metal Sales

Silver (in thousands of ounce) 1,319 1,322 1,472 1,324 1,255 5,437 5,930

Gold (in thousands of ounce) 0.7 0.7 0.8 0.9 0.7 3.1 3.3

Lead (in thousands of pound) 12,649 13,487 15,279 13,765 13,520 55,180 63,418

Zinc (in thousands of pound) 1,106 2,006 2,269 755 1,033 6,136 5,848

Cash mining costs ($ per tonne) 65.88 66.71 59.67 54.78 49.99 61.46 51.79

Total mining costs ($ per tonne) 92.81 90.12 81.20 76.67 53.50 84.59 74.04

Cash milling costs ($ per tonne) 12.59 9.84 8.50 8.07 10.43 9.49 9.03

Total milling costs ($ per tonne) 15.80 11.87 10.45 10.10 13.60 11.71 11.26

Cash production costs ($ per tonne) 82.84 80.60 71.85 66.93 64.34 74.96 64.70

Cash costs per ounce of silver ($) (3.41) (4.53) (4.27) (2.97) (3.73) (3.88) (2.76)

All‐in sustaining costs per ounce of

silver ($) 1.39 2.13 1.08 3.66 0.74 2.04 2.61

* Milling costs were adjusted to exclude mineral resources tax

Fiscal year ended March 31,

Cash cost per ounce of silver, net of by‐product credits, in Fiscal 2018 at the Ying Mining District, was

negative $3.88, compared to negative $2.76 in the prior year.

All‐in sustaining costs per ounce of silver, net of by‐product credits, in Fiscal 2018 at the Ying Mining

District was $2.04 compared to $2.61 in the prior year quarter.

In Fiscal 2018, approximately 104,798 m or $2.3 million of underground diamond drilling (Fiscal 2017 –

93,735 m or $2.1 million) and 19,723 m or $5.8 million of preparation tunnelling (Fiscal 2017 – 17,787 m

or $5.0 million) were completed and expensed as mining preparation costs at the Ying Mining District. In

addition, approximately 61,827 m or $20.1 million of horizontal tunnels, raises and declines (Fiscal 2017 –

60,241 m or $18.1 million) were completed and capitalized.

ii) Q4 Fiscal 2018 vs. Q4 Fiscal 2017

In Q4 Fiscal 2018, a total of 113,820 tonnes of ore were mined and 112,285 tonnes milled at the Ying

Mining District, up by 1% and 4%, compared to 112,755 tonnes mined and 108,051 tonnes milled in Q4

Fiscal 2017.

Average head grades were 309 g/t for silver, 4.3% for lead, and 1.0% for zinc compared to 298 g/t for

silver, 4.8% for lead, and 0.8% for zinc, respectively, in the Q4 Fiscal 2017.

Metals sold were approximately 1.3 million ounces of silver, 700 ounces of gold, 12.6 million pounds of

lead, and 1.1 million pounds of zinc, compared to 1.3 million ounces of silver, 700 ounces of gold, 13.5

million pounds of lead, and 1.0 million pounds of zinc in Q4 Fiscal 2017.

The cash mining costs at the Ying Mining District in Q4 Fiscal 2018 was $65.88 per tonne, compared to

$49.99 in Q4 Fiscal 2017. The increase in cash mining costs were mainly due to: i) a $0.3 million increase

in raw material supply costs, ii) a $0.4 million increase in mining preparation costs, and iii) a $0.7 million

increase in direct mining contractor costs.

The cash milling cost was $12.59 per tonne in Q4 Fiscal 2018, an increase of 21% compared to $10.43 in

Q4 Fiscal 2017.

Cash cost per ounce of silver and all‐in sustaining costs per ounce of silver, net of by‐product credits, at

the Ying Mining District, for Q4 Fiscal 2018, were negative $3.41 and $1.39, respectively, compared to

negative $3.73 and $0.74, respectively, in Q4 Fiscal 2017.

In Q4 Fiscal 2018, approximately 18,791 m or $0.6 million of underground diamond drilling (Q4 Fiscal

2017 – 21,961 m or $0.4 million) and 2,809 m or $0.9 million of preparation tunnelling (Q4 Fiscal 2017 –

2,718 m or $0.8 million) were completed and expensed as mining preparation costs at the Ying Mining

District. In addition, approximately 9,653 m or $3.9 million of horizontal tunnels, raises, and declines (Q4

Fiscal 2017 – 9,741 m or $2.9 million) were completed and capitalized.

4. GC Mine, Guangdong Province, China

i) Fiscal 2018 vs. Fiscal 2017

The total ore mined at the GC Mine was 245,783 tonnes, a decrease of 14,963 tonnes or 6%, in Fiscal

2018, compared to 260,746 tonnes mined in Fiscal 2017, while ore milled decreased by 6% to 244,338

tonnes from 260,696 tonnes in the prior year. The decrease of ore mined at the GC Mine was mainly due

to the impact arising from a changeover of a mining contractor and lack of skilled miners in the fourth

quarter of Fiscal 2018.

Head grades were 98 g/t for silver, 1.5% for lead, and 2.8% for zinc in Fiscal 2018, compared to 94 g/t for

silver, 1.4% for lead, and 2.8% for zinc in the prior year.

The GC Mine sold 603,000 ounces of silver, 6.8 million pounds of lead, and 13.4 million pounds of zinc in

Fiscal 2018, compared to 564,000 ounces of silver, 7.1 million pounds of lead, and 12.4 million pounds of

zinc sold in Fiscal 2017.

Total and cash mining costs at the GC Mine were $45.73 and $37.48 per tonne, respectively, in Fiscal

2018, compared to $40.03 and $32.10 per tonne, respectively, in Fiscal 2017. The increase in cash mining

costs was mainly due to a $0.9 million increase in mining preparation costs resulting from more

underground drilling expensed in Fiscal 2018.

Total and cash milling costs at the GC Mine were $19.17 and $15.72 per tonne, respectively, in Fiscal

2018, compared to $17.40 and $14.35 per tonne, respectively, in Fiscal 2017. The increase in milling costs

was mainly due to higher raw material supply costs.

Correspondingly, cash production costs per tonne of ore processed in Fiscal 2018 at the GC Mine

increased by 14% to $53.20 from $46.45 in the prior year due to the increase in both per tonne cash

mining and milling costs.

Cash costs per ounce of silver, net of by‐product credits, at the GC Mine, was negative $12.37 in Fiscal

2018, compared to negative $6.64 in the prior year. The improvement was mainly due to a 45% increase

in by‐product credits, mainly arising from an 8% increase in zinc sold and a 32% and 50% increase in net

realized lead and zinc selling prices, offset by a 4% decrease in lead sold. Sales from lead and zinc

accounted for 76% of the total sales at the GC Mine in Fiscal 2018, and amounted to $21.2 million, an

increase of $6.9 million, compared to $14.3 million in the prior year.

All‐in sustaining costs per ounce of silver, net of by‐product credits, in Fiscal 2018 at the GC Mine was

negative $3.69 compared to $0.20 in the prior year. The improvement was mainly due to higher by‐

product credits achieved as discussed above.

Operational results ‐ GC Mine Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017

March 31, 2018 December 31, 2017 September 30, 2017 June 30, 2017 March 31, 2017 2018 2017*

Ore Mined (tonne) 29,442 85,665 65,812 64,865 40,224 245,783 260,746

Ore Milled (tonne) 26,252 88,494 63,648 65,944 39,929 244,338 260,696

Head Grades

Silver (gram/tonne) 96 97 102 98 91 98 94

Lead (%) 1.3 1.4 1.4 1.6 1.3 1.5 1.4

Zinc (%) 2.9 2.8 2.8 2.7 2.6 2.8 2.8

Recovery Rates

Silver (%) 76.3 73.6 74.4 81.2 72.8 76.2 75.7

Lead (%) 87.5 83.9 82.8 88.8 82.4 85.4 85.7

Zinc (%) 85.7 81.3 81.6 80.9 74.8 81.8 84.7

Metal Sales

Silver (in thousands of ounce) 63 196 155 189 53 603 564

Lead (in thousands of pound) 688 2,263 1,656 2,147 818 6,754 7,055

Zinc (in thousands of pound) 1,479 4,399 3,311 4,244 455 13,433 12,446

Cash mining cost ($ per tonne) 45.92 35.48 34.60 39.20 37.91 37.48 32.10

Total mining cost ($ per tonne) 57.47 43.10 42.62 46.99 45.37 45.73 40.03

Cash milling cost ($ per tonne) 25.07 14.09 14.63 16.73 20.06 15.72 14.35

Total milling cost ($ per tonne) 33.41 16.45 17.90 19.85 24.99 19.17 17.40

Cash production cost ($ per tonne) 70.99 49.57 49.23 55.93 57.97 53.20 46.45

Cash cost per ounce of silver ($) (13.95) (15.34) (13.56) (7.80) (1.72) (12.37) (6.64)

All‐in sustaining cost per ounce of

silver ($) (4.57) (4.52) (3.77) (2.48) 14.55 (3.69) 0.20

* Milling costs were adjusted to exclude mineral resources tax

Fiscal year ended March 31,

In Fiscal 2018, approximately 21,717 m or $1.1 million of underground diamond drilling (Fiscal 2017 –

12,484 m or $0.8 million) and 15,811 m or $4.5 million of tunnelling (Fiscal 2017 – 14,690 m or $4.0

million) were completed and expensed as mining preparation costs at the GC Mine. In addition,

approximately 320 m or $0.3 million of horizontal tunnels, raises and declines (Fiscal 2017 – 1,721 m or

$0.7 million) were completed and capitalized.

ii) Q4 Fiscal 2018 vs. Q4 Fiscal 2017

In Q4 Fiscal 2018, a total of 29,442 tonnes of ore were mined and 26,252 tonnes were milled at the GC

Mine compared to 40,224 tonnes mined and 39,929 tonnes milled in Q4 Fiscal 2017.

Average head grades were 96 g/t for silver, 1.3% for lead, and 2.9% for zinc compared to 91 g/t for silver,

1.3% for lead, and 2.6% for zinc, respectively, in Q4 Fiscal 2017.

Metals sold were approximately 63,000 ounces of silver, 0.7 million pounds of lead, and 1.5 million

pounds of zinc, compared to 53,000 ounces of silver, 0.8 million pounds of lead, and 0.5 million pounds of

zinc in Q4 Fiscal 2017.

The cash mining costs at the GC Mine was $45.92 per tonne, an increase of 21%, in Q4 Fiscal 2018,

compared to $37.91 per tonne in Q4 Fiscal 2017. The increase in cash mining costs was mainly due to

lower production output resulting in higher unit costs allocation.

Correspondingly, the cash milling costs at the GC Mine in Q4 Fiscal 2018 increased by 25% to $25.07 per

tonne, compared to $20.06 per tonne in Q4 Fiscal 2017.

Cash costs per ounce of silver and all‐in sustaining costs per ounce of silver, net of by‐product credits, at

the GC Mine, in Q4 Fiscal 2018, were negative $13.95 and negative $4.57, respectively, compared to

negative $1.72 and $14.55 in Q4 Fiscal 2017. The improvement is mainly due to higher by‐product credits

achieved arising from a 225% increase in zinc metal sold along with a 34% and 48% increase, respectively,

in lead and zinc realized selling prices.

In Q4 Fiscal 2018, approximately 3,464 m or $0.2 million of underground diamond drilling (Q4 Fiscal 2017

– 2,995 m or $0.2 million) and 1,526 m or $0.7 million of tunnelling (Q4 Fiscal 2017 – 2,714 m or $0.8

million) were completed and expensed as mining preparation costs at the GC Mine. In addition,

approximately 40 m or $0.1 million of horizontal tunnels, raises, and declines (Q4 Fiscal 2017 – 40 m or

$0.1 million) were completed and capitalized.

Full Milling Operations Resumed at Ying

As announced on April 16, milling operations at the Ying Mining District were temporarily suspended due

to a spillage incident. On April 28, one floatation line of 1,000 tonnes per day at the No. 2 mill, using the

No. 1 tailing storage facility resumed operation. On May 23, the No. 2 tailing storage facility resumed

usage after the fifth overflow well was permanently plugged, and full mill operations resumed.

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 www.sedar.com and are also available on the

Company's website at www.silvercorp.ca. All figures are in United States dollars unless otherwise stated.

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.

← Back to feed