SVM.TO · 2017-02-02 12:00:00

Silvercorp Net Income $30.2 Million, $0.18 PER Share, up 284% FOR First Three Quarters of Fiscal 2017

Corporate Updates

NEWS RELEASE

Trading Symbol: TSX: SVM

SILVERCORP NET INCOME $30.2 MILLION, $0.18 PER SHARE, UP 284% FOR FIRST

THREE QUARTERS OF FISCAL 2017

VANCOUVER, British Columbia – February 2, 2017 – Silvercorp Metals Inc. (“Silvercorp” or the

“Company”) (TSX: SVM) reported its financial and operating results for the third quarter and nine

months ended December 31, 2016. All amounts are expressed in US Dollars.

HIGHLIGHTS FOR THE THREE QUARTERS ENDED DECEMBER 31, 2016

 Net income attributable to equity shareholders of $30.2 million, or $0.18 per share, up 284%

compared with net income attributable to equity shareholders of $7.9 million or $0.05 per share

in the prior year period;

 Silver, lead and zinc metals sold up 28%, 32%, and 22%, respectively, from the prior year period,

to approximately 5.2 million ounces silver, 56.1 million pounds lead, and 16.8 million pounds

zinc;

 Silver production for the three quarters has already surpassed the Fiscal 2017 annual production

guidance by approximately 2%;

 Sales of $129.4 million, up 46% compared to $88.5 million in the prior year period;

 A 15%, 16%, and 15% increase in the head grades of silver, lead, and zinc compared to the prior

year period;

 A 13%,13%, and 23% increase in the net realized selling prices of silver, lead, and zinc compared

to the prior year period;

 Gross margin improved to 54% from 34% in the prior year period;

 Cash flows from operations of $75.6 million, or $0.44 per share, an increase of $48.1 million

compared to $27.5 million, or $0.16 per share in the prior year period;

 Cash production cost per tonne1 of decreased by 14% to $59.26 from $69.12 in the prior year

period;

 Cash cost per ounce of silver1, net of by‐product credits, of negative $2.88, compared to $1.26 in

the prior year period;

 All‐in sustaining cost per ounce of silver1, net of by‐product credits, of $3.96, compared to

$10.27 in the prior year period; and

 Ended the period with $97.4 million in cash and short term investments, an increase of $35.4

million or 60% compared to $62.0 million as at March 31, 2016.

1 Non‐IFRS measure

HIGHLIGHTS FOR THE THIRD QUARTER FISCAL 2017 (“Q3 FISCAL 2017”)

 Net income attributable to equity shareholders of $13.1 million, or $0.08 per share, up 294%

compared with net income attributable to equity shareholders of $3.3 million or $0.02 per

share in the prior year quarter;

 Silver, lead and zinc metals sold up 22%, 29%, and 21%, respectively, from the prior year

quarter, to approximately 1.7 million ounces silver, 19.5 million pounds lead, and 5.7 million

pounds zinc;

 Sales of $47.8 million, up 64% compared to $29.1 million from the prior year quarter;

 A 5%, 9%, and 15% increase in the head grades of silver, lead, and zinc compared to the prior

year quarter;

 A 15%, 52%, and 83% increase in the net realized selling prices of silver, lead, and zinc compared

to the prior year quarter;

 Gross margin improved to 58% from 33% in the prior year quarter;

 Cash flows from operations of $28.3 million, an increase of $18.7 million compared to $9.6

million in the prior year quarter;

 Cash production cost per tonne of $60.51, down 8% compared with $65.59 in the prior year

quarter;

 Cash cost per ounce of silver, net of by‐product credits, of negative $5.48, compared to $0.90 in

the prior year quarter; and

 All‐in sustaining cost per ounce of silver, net of by‐product credits, of $1.87, compared to $7.72

in the prior year quarter.

FINANCIALS

Net income attributable to the shareholders of the Company in Q3 Fiscal 2017 was $13.1 million, or

$0.08 per share, up 294% compared to $3.3 million, or $0.02 per share in Q3 Fiscal 2016.

In the current quarter, the Company’s financial results were mainly impacted by the following: i)

improved head grades yielded higher silver, lead, zinc sales, up 5%, 9% and 15%, respectively; ii) a 8%

decrease in total production costs per tonne of ore processed; and iii) the increase of metals prices,

as the realized selling price for silver, lead, and zinc increased by 15%, 52% and 83%, respectively,

compared to the same prior year quarter.

Sales in Q3 Fiscal 2017 were $47.8 million, up 64% compared to $29.1 million in Q3 Fiscal 2016.

Silver and gold sales represented $23.4 million and $0.7 million, respectively, while base metals

represented $23.7 million of total sales in this quarter compared to silver, gold and base metals of

$16.8 million, $0.4 million, and $11.9 million, respectively, in Q3 Fiscal 2016.

Cost of sales in Q3 Fiscal 2017 was $20.1 million compared to $19.5 million in Q3 Fiscal 2016. The

cost of sales included $14.9 million (Q3 Fiscal 2016 ‐ $13.5 million) cash costs and $5.2 million (Q3

Fiscal 2016 ‐ $6.0 million) depreciation, amortization and depletion charges. The increase of cash

cost of sales was mainly due to the increase of metals sold offset by an 8% decrease in cash

production costs per tonne of ore processed. The total per tonne ore production cost was $82.19 in

Q3 Fiscal 2017, a decrease of 5%, from $86.47 in Q3 Fiscal 2016.

Gross profit margin in Q3 Fiscal 2017 was 58% compared to 33% in Q3 Fiscal 2016. The

improvement of gross profit margin was mainly due to: i) a 5%, 9%, and 15% increase in the head

grades of silver, lead, and zinc; ii) a 5% decrease in per tonne ore production costs; and iii) the

increase of metal prices. Ying Mining District’s gross profit margin was 61% compared to a 40% gross

profit margin in the same prior year quarter, while GC Mine’s profit margin was 42% compared to a

3% gross profit margin in Q3 Fiscal 2016.

Cash flows provided by operating activities in Q3 Fiscal 2017 were $28.3 million or $0.17 per share

compared to $9.6 million or $0.06 per share in Q3 Fiscal 2016. Before changes in non‐cash operating

working capital, cash flows provided by operating activities were $26.4 million, an increase of $13.9

million or 111%, compared to $12.5 million in Q3 Fiscal 2016 as a result of the improvement of

operating earnings.

For the nine months ended December 31, 2016, net income attributable to the shareholders of the

Company was $30.2 million, or $0.18 per share, up 284% compared to $7.9 million, or $0.05 per

share in the same prior year period; sales were $129.4 million, up 46% from $88.5 million in the

same prior year period; and cash flows provided by operating activities were $75.6 million or $0.44

per share compared to $27.5 million or $0.16 per share in the same prior year period. Before

changes in non‐cash operating working capital, cash flows provided by operating activities for the

nine months ended December 31, 2016 were $66.9 million, an increase of $35.9 million or 116%,

compared to $31.0 million in the same prior year period.

The Company ended the period with $97.4 million in cash and short term investments, an increase of

$35.4 million or 60% compared to $62.0 million as at March 31, 2016.

OPERATIONS AND DEVELOPMENT

In Q3 Fiscal 2017, the Company sold approximately 1.7 million ounces of silver, 19.5 million pounds

of lead, and 5.7 million pounds of zinc, up 22%, 29% and 21%, respectively, compared to 1.4 million

ounces of silver, 15.1 million pounds of lead, and 4.7 million pounds of zinc in Q3 Fiscal 2016. The

increase of metals sold, on a consolidated basis, was mainly due to: i) a 5%, 9%, and 15% increase in

the head grades of silver, lead and zinc, resulting largely from the ongoing dilution control measures

and operation management improvements; and ii) a 18% increase of ore milled. In addition, as at the

end of Q3 Fiscal 2017, the Ying Mining District held 4,656 tonnes of silver‐lead concentrate

inventories, and the estimated metals contained in silver‐lead concentrate were approximately 0.5

million ounces of silver and 5.3 million pounds of lead.

For the nine months ended December 31, 2016, on a consolidated basis, the Company sold

approximately 5.2 million ounces of silver, 56.1 million pounds of lead, and 16.8 million pounds of

zinc, up 28%, 32% and 22% compared to the same prior year period.

1. Ying Mining District, Henan Province, China

Operational results ‐ Ying Mining District

Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016

December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015 2016 2015

Ore Mined (tonne) 171,303 179,194 173,508 99,415 152,230 524,005 490,351

Ore Milled (tonne) 182,259 180,154 167,747 99,203 151,035 530,160 488,248

Head Grades

Silver (gram/tonne) 303 302 308 310 287 305 260

Lead (%) 4.8 4.9 4.4 4.0 4.1 4.7 3.8

Zinc (%) 0.8 1.1 1.1 0.9 0.8 1.0 0.8

Recoveries

Silver (%) 95.1 95.5 95.7 95.0 95.4 95.4 95.0

Lead (%) 96.7 96.3 96.4 96.3 96.6 96.4 95.4

Zinc (%) 47.5 42.9 48.4 57.6 50.2 46.0 53.3

Metal Sales

Silver (in thousands of ounce) 1,555 1,630 1,490 857 1,216 4,675 3,538

Gold (in thousands of ounce) 0.7 1.0 0.9 0.3 0.5 2.6 2.0

Lead (in thousands of pound) 17,269 17,768 14,861 7,379 12,107 49,898 35,563

Zinc (in thousands of pound) 1,210 1,785 1,820 999 1,168 4,815 3,999

Cash mining cost ($ per tonne) 55.21 49.13 52.33 54.63 55.63 52.18 58.25

Total mining cost ($ per tonne) 80.53 76.30 78.64 83.24 78.91 78.46 80.15

Cash milling cost ($ per tonne) 9.09 8.85 10.07 13.70 11.67 9.31 12.06

Total milling cost ($ per tonne) 11.03 10.86 12.25 17.38 14.15 11.35 14.40

Cash production cost ($ per tonne) 68.22 61.79 66.27 71.90 71.29 65.35 74.41

Cash cost per ounce of silver ($) (4.60) (2.68) 0.12 2.83 0.25 (2.43) 1.03

All‐in sustaining cost per ounce of

silver ($) 1.34 2.33 5.80 8.92 6.62 3.11 8.52

* Figures may not add due to rounding

Nine Months ended December 31,

In Q3 Fiscal 2017, the total ore mined at the Ying Mining District was 171,303 tonnes, an increase of

13% compared to total ore production of 152,230 tonnes in Q3 Fiscal 2016. Total ore milled at the

Ying Mining District in Q3 Fiscal 2017 was 182,259 tonnes, an increase of 21% compared to 151,035

tonnes in Q3 Fiscal 2016. Silver and lead head grades improved by 6% and 16%, respectively, to 303

grams per tonne (“g/t”) for silver and 4.8% for lead from 287 g/t for silver and 4.1% for lead,

respectively, in Q3 Fiscal 2016, resulting largely from the ongoing dilution control and operation

management improvements. Head grade for zinc was 0.8%, comparable to 0.8% in the prior year

quarter.

In Q3 Fiscal 2017, the Ying Mining District sold approximately 1.6 million ounces of silver, 700 ounces

of gold, 17.3 million pounds of lead, and 1.2 million pounds of zinc, up 28%, 33%, 43%, and 4%

respectively, compared to 1.2 million ounces of silver, 500 ounces of gold, 12.1 million pounds of

lead, and 1.2 million pounds of zinc in Q3 Fiscal 2016. The increase in metals sold is mainly due to the

improved head grades achieved and higher ore production in the quarter.

Cash mining costs per tonne in Q3 Fiscal 2017 was $55.21, compared to $55.63 in Q3 Fiscal 2016.

Cash milling costs in Q3 Fiscal 2017 were $9.09 compared to $11.67 in Q3 Fiscal 2016 with the

decrease mainly due to: i) a 15% reduction in per tonne utility costs; ii) a 4% decrease in per tonne

labour costs; and iii) the exclusion of mineral resource tax from milling costs. Prior to June 30, 2016,

mineral resource tax was levied at RMB¥13.0 per tonne of ore milled and included as part of milling

costs. Effective July 1, 2016, the mineral resource tax was changed to a levy based on a certain

percentage of sales, and therefore such tax is excluded from milling costs but expensed directly and

included in government fee and other taxes.

Cash production cost per tonne of ore processed at the Ying Mining District in Fiscal Q3 2017 was

$68.22, a decrease of 4% compared to $71.29 in Q3 Fiscal 2016 as a result of the decrease in both

per tonne cash mining and milling costs.

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

$4.60 in Q3 Fiscal 2017 compared to $0.25 in Q3 Fiscal 2016. The decrease was mainly due to: i)

lower per tonne cash production costs as discussed above; and, ii) a 111% increase in by‐product

credits arising from 43% and 4% increases in lead and zinc sold and 50% and 67% increases in net

realized lead and zinc selling prices. Sales from lead and zinc accounted for 44% of the total sales at

the Ying Mining District in the current quarter, and amounted to $17.7 million, an increase of $9.4

million, compared to $8.3 million in the prior year quarter.

All in sustaining costs per ounce of silver, net of by‐product credits, at the Ying Mining District in Q3

2017 was $1.34 per ounce of silver compared to $6.62 in Q3 Fiscal 2016. The decrease was mainly

due to lower per tonne cash production cost and the increase in by‐product credits as discussed

above, offset by a $1.2 million increase in sustaining capital expenditures.

For the nine months ended December 31, 2016, the total ore mined at the Ying Mining District was

524,005 tonnes, up 7% compared to 490,351 tonnes in the same prior year period. Correspondingly,

total ore milled was 530,160 tonnes, up 9% compared to 488,248 tonnes. Average head grades were

305 g/t for silver, 4.7% for lead, and 1.0% for zinc compared to 260 g/t for silver, 3.8% for lead, and

0.8% for zinc, respectively.

During the same time periods, the Ying Mining District sold approximately 4.7 million ounces of silver,

2,600 ounces of gold, 49.9 million pounds of lead, and 4.8 million pounds of zinc, compared to 3.5

million ounces of silver, 2,000 ounces of gold, 35.6 million pounds of lead, and 4.0 million pounds of

zinc in the same prior year period.

For the nine months ended December 31, 2016, the cash mining costs at the Ying Mining District was

$52.18 per tonne, a decrease of 10% compared to $58.25 per tonne in the same prior year period.

The cash milling cost was $9.31 per tonne, a decrease of 23% compared to $12.06 in the same prior

year period.

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 the nine months ended December 31, 2016, were negative $2.43 and

$3.11 respectively, compared to $1.03 and $8.52 in the same prior year period.

In Q3 Fiscal 2017, approximately 36,756 meters (“m”) of underground diamond drilling (Q3 Fiscal

2016 – 21,223 m) and 4,900 m of preparation tunnelling (Q3 Fiscal 2016 – 4,231 m) were completed

and expensed as mining preparation costs at the Ying Mining District. In addition, approximately

17,823 m of horizontal tunnel, raise, and declines (Q3 Fiscal 2016 – 13,893 m) were completed and

capitalized. Total capitalized exploration and development expenditures in Q3 Fiscal 2017 for the

Ying Mining District were $5.7 million compared to $4.6 million in Q3 Fiscal 2016.

For the nine months ended December 31, 2016, approximately 71,794 m of underground diamond

drilling (same prior year period – 60,435 m) and 15,069 m of preparation tunnelling (same prior year

period – 16,460 m) were completed and expensed as mining preparation costs at the Ying Mining

District. In addition, approximately 50,500 m of horizontal tunnel, raise, and declines (same prior

year period – 49,452 m) were completed and capitalized. Total capitalized exploration and

development expenditures for the nine months ended December 31, 2016 for the Ying Mining

District were $15.4 million compared to $16.4 million in same prior year period. The Company also

paid $1.3 million to renew the mining permit for TLP and LM mine and $8.7 million to retire the

mineral right fee payable incurred in prior years for the mining permit for the SGX mine.

2. GC Mine, Guangdong Province, China

In Q3 Fiscal 2017, the Company mined 81,481 tonnes of ore at the GC Mine, an increase of 14%

compared to 71,288 tonnes in Q3 Fiscal 2016. Total ore milled at the GC Mine in Q3 Fiscal 2017 was

81,080 tonnes, an increase of 13% compared to 71,593 tonnes in Q3 Fiscal 2016. Head grades were

89 g/t for silver, 1.4% for lead and 2.8% for zinc, compared to 97 g/t for silver, 1.9% for lead and 2.6%

for zinc in Q3 Fiscal 2016.

Cash mining cost was $31.34 in Q3 Fiscal 2017 compared to $38.22 in Q3 Fiscal 2016. The decrease

of cash mining costs arose mainly because approximately 29% of the ore was by‐product ore from

exploration tunnelling or extracted from previously mined stopes for which direct mining costs were

paid in prior periods, and the only cost involved was to ship the ore to the mill. The cash milling cost

Operational results ‐ GC Mine Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016

December 31, 2016 September 30, 2016 June 30, 2016 March 31, 2016 December 31, 2015 2016 2015

Ore Mined (tonne) 81,481 74,692 64,349 50,014 71,288 220,522 207,561

Ore Milled (tonne) 81,080 76,100 63,587 50,124 71,593 220,767 206,738

Head Grades

Silver (gram/tonne) 89 96 99 92 97 94 97

Lead (%) 1.4 1.6 1.5 2.0 1.9 1.5 1.6

Zinc (%) 2.8 2.8 2.9 2.7 2.6 2.9 2.5

Recovery Rates

Silver (%) 75.4 76.2 76.8 79.1 80.2 76.2 78.3

Lead (%) 85.5 86.6 86.9 84.9 88.3 86.3 88.5

Zinc (%) 86.5 86.4 85.8 82.6 81.2 86.3 82.4

Metal Sales

Silver (in thousands of ounce) 179 183 149 118 210 511 519

Lead (in thousands of pound) 2,214 2,163 1,860 1,970 3,021 6,237 7,072

Zinc (in thousands of pound) 4,478 4,106 3,407 2,576 3,525 11,991 9,726

Cash mining cost ($ per tonne) 31.34 28.61 33.50 26.24 38.22 31.04 41.13

Total mining cost ($ per tonne) 38.90 36.78 41.91 34.76 46.52 39.05 49.33

Cash milling cost ($ per tonne) 13.09 12.94 15.60 16.99 15.16 13.76 15.49

Total milling cost ($ per tonne) 15.50 15.57 18.81 20.67 17.30 16.47 17.72

Cash production cost ($ per tonne) 44.43 41.55 49.10 43.23 53.38 44.80 56.62

Cash cost per ounce of silver ($) (13.11) (6.39) (0.28) (2.24) 4.62 (6.96) 2.78

All‐in sustaining cost per ounce of

silver ($) (6.12) (1.49) 4.76 1.19 9.80 (1.29) 10.54

* Figures may not add due to rounding

Nine Months ended December 31,

per tonne was $13.09, compared to $15.16 in Q3 Fiscal 2016, with the decrease mainly due to the

exclusion of mineral resource tax from milling costs as discussed above.

Correspondingly, cash production cost per tonne of ore processed at the GC Mine was $44.43, a

decrease of 17% compared to $53.38 in Q3 Fiscal 2016 as a result of the decrease in both per tonne

cash mining and milling cost.

In Q3 Fiscal 2017, the GC Mine sold approximately 4.5 million pounds of zinc, an increase of 27%,

compared to 3.5 million pounds of zinc in the prior year quarter as a result of the 6% increase in zinc

head grade and higher output. Silver and lead sold at the GC Mine decreased by 15% and 27% to

approximately 0.2 million ounces of silver and 2.2 million pounds of lead, respectively, compared to

0.2 million ounces of silver and 3.0 million pounds of lead sold in Q3 Fiscal 2016, with the decrease

mainly due to lower head grades and recovery rates.

Cash cost per ounce of silver, net of by‐product credits, at the GC Mine, was negative $13.11 in Q3

Fiscal 2017 compared to $4.62 in Q3 Fiscal 2016. The decrease was mainly due to: i) lower per tonne

cash production costs as discussed above; and, ii) a 68% increase in by‐product credits, mainly arising

from more zinc sold and higher lead and zinc prices. Sales from lead and zinc accounted for 75% of

the total sales at the GC Mine in the current quarter, and amounted to $5.9 million, an increase of

$2.5 million, compared to $3.4 million in the prior year quarter.

All in sustaining costs per ounce of silver, net of by‐product credits, at the GC Mine in Q3 2017 was

negative $6.12, compared to $9.80 in Q3 Fiscal 2016. The decrease was mainly due to: i) lower per

tonne cash production costs and the increase of by‐product credits as discussed above; and, ii) a $0.2

million decrease in sustaining capital expenditures.

For the nine months ended December 31, 2016, the total ore mined at the GC Mine was 220,522

tonnes, an increase of 6% compared to 207,561 tonnes in the same prior year period.

Correspondingly, total ore milled was 220,767 tonnes, an increase of 7% compared to 206,738 milled

in the same prior year period. Average head grades were 94 g/t for silver, 1.5% for lead, and 2.9% for

zinc compared to 97 g/t for silver, 1.6% for lead, and 2.5% for zinc, respectively.

During the same time periods, the GC Mine sold approximately 0.5 million ounces of silver, 6.2

million pounds of lead, and 12.0 million pounds of zinc, compared to 0.5 million ounces of silver, 7.1

million pounds of lead, and 9.7 million pounds of zinc in the same prior year period.

For the nine months ended December 31, 2016, the cash mining costs at the GC Mine was $31.04

per tonne, a decrease of 25% compared to $41.13 per tonne in the same prior year period. The cash

milling cost was $13.76 per tonne, a decrease of 11% compared to $15.49 in the same prior year

period.

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

at the GC Mine, for the nine months ended December 31, 2016, were negative $6.96 and negative

$1.29 respectively, compared to $2.78 and $10.54 in the same prior year period.

In Q3 Fiscal 2017, approximately 3,935 m of underground diamond drilling (Q3 Fiscal 2016 – 4,202 m)

and 4,640 m of tunnelling (Q3 Fiscal 2016 – 4,111 m) were completed and expensed as mining

preparation costs at the GC Mine. In addition, approximately 554 m of horizontal tunnel, raise, and

declines (Q3 Fiscal 2016 – 731 m) were completed and capitalized. Total capitalized exploration and

development expenditures in Q3 Fiscal 2017 for the GC Mine were $0.5 million compared to $0.3

million in Q3 Fiscal 2016.

For the nine months ended December 31, 2016, approximately 9,489 m of underground diamond

drilling (same prior year period – 18,500 m) and 11,976 m of tunnelling (same prior year period –

11,847 m) were completed and expensed as mining preparation costs at the GC Mine. In addition,

approximately 1,685 m of horizontal tunnel, raise, and declines (same prior year period – 1,239 m)

were completed and capitalized. Total capitalized exploration and development expenditures were

$0.9 million compared to $0.8 million in the same prior year period.

FISCAL 2018 PRODUCTION AND CASH COST GUIDANCE IMPROVES OVER PRIOR YEAR GUIDANCE

Silvercorp’s Fiscal 2018 guidance, for both production and cash costs, has improved relative to Fiscal

2017 guidance including a 12% increase in silver production guidance, a 10% increase in lead

production guidance, and a 44% decrease in consolidated all‐in sustaining cost per ounce of silver

guidance. The table below sets out more detailed guidance for fiscal 2018.

(*)Both AISC and cash cost are non‐IFRS measures. AISC refers to all‐in sustaining cost per ounce of silver, net of credits from gold,

lead, zinc and other metals. Cash cost refers to cash production costs per tonne ore processed. Foreign exchange rates assumptions

used are: US$1 = CAD$1.33, US$1 = RMB¥6.85; metal prices assumptions used are US$17/oz for silver, US$1,185/oz for gold,

US$0.98/lb for lead, and US$1.07/lb for zinc.

In Fiscal 2018, the Company expects to produce approximately 900,000 tonnes of ore, yielding 5.7

million ounces of silver, 63.1 million pounds of lead, and 18.3 million pounds of zinc. Fiscal 2018

production guidance represents an increase of approximately 5% in ore production, 12% in silver

production, and 10% in lead production compared to the prior year’s guidance released on February

5, 2016. The consolidated all‐in sustaining cost (“AISC”) is forecasted to be $5.4 per ounce of silver

after credits from gold, lead, zinc and other metals, a decline of 44% compared to guidance of $9.67

for Fiscal 2017.

1. Ying Mining District, Henan Province, China

In Fiscal 2018, Ying Mining District plans to mine and process 650,000 tonnes of ore averaging 275

g/t silver, 4.2% lead, and 0.9% zinc with expected metal production of 5.3 million ounces of silver,

56.0 million pounds of lead and 6.0 million of zinc. Fiscal 2018 production guidance at the Ying

Mining District represents an increase of approximately 6% in both ore production and silver head

grade and an increase of 15% in silver production compared to the prior year’s guidance. The cash

production cost is expected to be $66.8 per tonne of ore. All‐in sustaining cost per ounce of silver is

estimated to be $4.2 per ounce of silver, a decline of 48% compared to guidance of $8.13 for Fiscal

2017.

Capital expenditures at the Ying Mining District in Fiscal 2018 are budgeted at $21.5 million, a decline

of 29% compared to guidance of $30.2 million for Fiscal 2017. Fiscal 2018 capital expenditures

include sustaining capital expenditures of $19.5 million and other capital expenditures of $2.0 million.

2. GC Mine, Guangdong Province, China

In Fiscal 2018, GC Mine plans to mine and process 250,000 tonnes of ore averaging 90 g/t silver, 1.5%

lead and 2.6% zinc with expected metal production of 0.4 million ounces of silver, 7.1 million pounds

of lead and 12.3 million pounds of zinc. The cash production cost is expected to be $46.1 per tonne

of ore. All in sustaining cash cost at GC Mine is expected to be negative $1.0 per ounce of silver.

Ore processed Silver Lead Zinc

(tonnes) (g/t) (%) (%)

Ying Mining District 650,000 275 4.2 0.9

GC Mine 250,000 90 1.5 2.6

Silver Lead Zinc Cash cost* AISC*

(Moz) (Mlbs) (Mlbs) ($/t) ($/oz Ag)

Ying Mining District 5.3 56.0 6.0 66.8 4.2

GC Mine 0.4 7.1 12.3 46.1 (1.0)

Consolidated 5.7 63.1 18.3 61.0 5.4

Capital expenditures at GC Mine in Fiscal 2018 are budgeted at $1.0 million, which includes

sustaining capital expenditures of $0.5 million and other capital expenditures of $0.5 million.

3. Consolidated AISC

Consolidated all‐in sustaining cost is estimated to be $5.4 per ounce of silver with the detailed

breakdown as follows:

Alex Zhang, P.Geo., Vice President, Exploration, 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 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 under developed

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.

Gordon Neal

Vice President, Corporate Development

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 press 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. 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 or

information. Forward‐looking statements or information 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

Fiscal 2018 AISC Guidance Ying Mining District GC Mine

Corporate and

other Consolidated

Cash production cost 43,401 $ 11,528$ ‐ $ 54,929$

By‐production credits (51,982) (15,044) ‐ (67,026)

Cash cost, net of by‐product credits (8,581) (3,516) ‐ (12,097)

Government fee and other taxes 5,598 873 15 6,486

Re clamation accretion 415 32 42 489

General and administration 5,237 1,730 9,212 16,179

Sustaining captial 19,544 489 ‐ 20,033

Al l‐in sustaining costs, net of by‐product credits A 22,213 (392) 9,269 31,090

Silver production (in thousands of ounces) B 5,322 393 ‐ 5,715

All‐in sustaining cost per ounce of silver,

net of by product credits A/B 4.2$ (1.0)$ ‐ $ 5.4$

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