Silvercorp Reports Adjusted Net Income of $13.6 Million, $0.08 Per Share, and Cash Flow From Operations of $30.9 Million for Q2 Fiscal 2022
Silvercorp Reports Adjusted Net Income of $13.6 Million, $0.08 Per Share,
and Cash Flow From Operations of $30.9 Million for Q2 Fiscal 2022
TSX:
SVM
NYSE AMERICAN: SVM
VANCOUVER, BC,
Nov. 4, 2021
/CNW/ -
Silvercorp Metals Inc.
("Silvercorp" or the "Company") (TSX: SVM) (NYSE American: SVM) reported its financial and
operating results for the second quarter ended
September 30, 2021
("Q2 Fiscal 2022). All amounts are expressed in US Dollars, and figures may not add due to
rounding.
Q2 FISCAL 2022 HIGHLIGHTS
Mined 292,468 tonnes of ore and milled 271,816 tonnes of ore, up 9% and 3% compared to the prior year quarter.
Sold approximately 1.7 million ounces of silver, 800 ounces of gold, 17.3 million pounds of lead, and 7.6 million pounds of zinc, representing decreases of 1%,
64%, and 7% in silver, gold and lead sold, and an increase of 3% in zinc sold, compared to the prior year quarter.
Revenue of
$58.4 million
, up 4% compared to
$56.4 million
in the prior year quarter.
Net income attributable to equity shareholders of
$9.4 million
, or
$0.05
per share, compared to
$15.5 million
, or
$0.09
per share in the prior year quarter. The
decrease was mainly due to an unrealized loss of
$4.1 million
on investments in the current quarter compared to a gain of
$2.8 million
in the prior year
quarter.
Adjusted earnings attributable to equity shareholders of
$13.6 million
, or
$0.08
per share, compared to
$15.4 million
, or
$0.09
per share in the prior year
quarter. The adjustments were made to remove impacts from non-recurring items, share-based compensation, foreign exchange gain/loss, gain/loss on
investments, and the share of associates' operating results.
Cash flow from operations of
$30.9 million
, up 4% or
$1.3 million
compared to
$29.6 million
in the prior year quarter.
Cash cost per ounce of silver, net of by-product credits, of negative
$1.65
compared to negative
$2.09
in the prior year quarter.
All-in sustaining cost per ounce of silver, net of by-product credits, of
$7.35
, compared to
$6.99
in the prior year quarter.
Strong balance sheet with
$221.1 million
in cash and cash equivalents and short-term investments, up
$6.7 million
or 3% compared to
$214.4 million
as at
June 30, 2021
and up
$22.0 million
or 11% compared to
$199.1 million
as at
March 31, 2021
. This does not include the investments in associates and equity
investment in other companies, having a total market value of
$172.8 million
as at
September 30, 2021
(
$243.2 million
as at
June 30, 2021
).
CONSOLIDATED FINANCIAL RESULTS
Three months ended September 30,
Six months ended September 30,
2021
2020
Changes
2021
2020
Changes
Financial
Revenue (in thousands of $)
$
58,435
$
56,372
4%
$
117,254
$
103,077
14%
Mine operating earnings (in thousands of $)
23,612
26,672
-11%
49,116
45,957
7%
Net income attributable to equity shareholders
9,393
15,472
-39%
21,605
30,963
-30%
Earnings per share - basic ($/share)
0.05
0.09
-44%
0.12
0.18
-33%
Adjusted earnings attributable to equity shareholders
13,609
15,385
-12%
29,380
24,951
18%
Adjusted earning per share - basic ($/share)
0.08
0.09
-11%
0.17
0.14
21%
Net cash generated from operating activities (in thousands of $)
30,854
29,601
4%
67,306
59,743
13%
Capitalized expenditures (in thousands of $)
14,151
11,098
28%
25,323
21,318
19%
Cash and cash equivalents and short-term investments (in thousands of $)
221,050
200,056
10%
221,050
200,056
10%
Working capital (in thousands of $)
193,306
169,336
14%
193,306
169,336
14%
Metals sold
Silver (in thousands of ounces)
1,729
1,740
-1%
3,371
3,612
-7%
Gold (in thousands of ounces)
0.8
2.2
-64%
1.8
3.3
-45%
Lead (in thousands of pounds)
17,319
18,551
-7%
34,129
39,436
-13%
Zinc (in thousands of pounds)
7,626
7,411
3%
14,881
14,369
4%
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($/ounce)
18.97
18.99
0%
19.82
16.40
21%
Gold ($/ounce)
1,483
1,371
8%
1,497
1,362
10%
Lead ($/pound)
0.89
0.78
14%
0.87
0.73
19%
Zinc ($/pound)
1.03
0.71
45%
1.02
0.65
57%
Net income attributable to equity shareholders of the Company
in Q2 Fiscal 2022 was
$9.4 million
or
$0.05
per share, compared to
$15.5 million
or
$0.09
per share in the three months ended
September 30, 2020
("Q2 Fiscal 2021").
Adjusted earnings attributable to equity shareholders of the Company
in Q2 Fiscal 2022 was
$13.6 million
, or
$0.08
per share, compared to
$15.4 million
,
or
$0.09
per share Q2 Fiscal 2021. The adjustments were made to remove the impacts from non-cash and unusual items, including elimination of share-based
compensation, foreign exchange loss, share of loss in associates, gain or loss on investments, and one-time items.
Compared to Q2 Fiscal 2021, the Company's consolidated financial results in the current quarter were mainly impacted by i) an increase of 8%, 14%, and 45%,
respectively, in the realized selling prices for gold, lead and zinc; offset by ii) a decrease of 1%, 64%, and 7%, respectively, in silver, gold, and lead sold; iii) a
loss of
$4.1 million
on investments reported in profit; iv) an average 8% appreciation of the Chinese yuan against the US dollar, resulting in higher costs presented
in US dollar; v) an overall 14.5% increase in mining contractors' fee rate at the Ying Mining District as previously reported in the Company's news release on
May
20, 2021
; and vi) an average 7% increase in employees' pay rate and the contribution rate to employees' social welfare funds in
China
returned to the normal rate
from a reduced rate granted by the Chinese government in Fiscal 2021 due to Covid-19.
Revenue
in Q2 Fiscal 2022 was
$58.4 million
, up 4% or
$2.0 million
compared to
$56.4 million
in Q2 Fiscal 2021. The increase was mainly due to an increase of
$4.7 million
arising from the increase in the gold, lead and zinc net realized selling metal prices; offset by a decrease of
$3.3 million
arising from the decrease in
the quantities of silver, gold, and lead sold. Revenues from silver, gold, and base metal were
$32.8 million
,
$1.2 million
, and
$24.4 million
, respectively, compared
to
$33.0 million
,
$3.0 million
, and
$20.3 million
in Q2 Fiscal 2021. Revenue from the Ying Mining District was
$47.1 million
, up 3%, compared to
$45.7 million
in Q2
Fiscal 2021. Revenue from the GC Mine was
$11.3 million
, up 24%, compared to
$9.2 million
in Q2 Fiscal 2021. Revenue from the BYP Mine was $nil, compared
to
$1.5 million
in Q2 Fiscal 2021 as the Company sold all remaining gold concentrate inventories produced by the mine before it was placed on care and
maintenance in 2014 in prior year quarter.
Income from mine operations
in Q2 Fiscal 2022 was
$23.6 million
, down 11% compared to
$26.7 million
in Q2 Fiscal 2021. Income from mine operations at the
Ying Mining District was
$19.3 million
, down 16% compared to
$23.1 million
in Q2 Fiscal 2021. Income from mine operations at the GC Mine was
$4.5 million
, up
55% compared to
$2.9 million
in Q2 Fiscal 2021.
Cash flow provided by operating activities
in Q2 Fiscal 2022 was
$30.9 million
, up 4% or
$1.3 million
, compared to
$29.6 million
in Q2 Fiscal 2021.
The Company ended the quarter with
$221.1 million
in cash, cash equivalents and short-term investments, up
$6.7 million
or 3% compared to
$214.4 million
as at
June 30, 2021
and up 11% or
$22.0 million
, compared to
$199.1 million
as at
March 31, 2021
.
Working capital as at
September 30, 2021
was
$193.3 million
, up 5% or
$9.3 million
, compared to
$184.0 million
as at
March 31, 2021
.
CONSOLIDATED
OPERATIONAL RESULTS
Three months ended September 30,
Six months ended September 30,
2021
2020
Changes
2021
2020
Changes
Ore Production (tonne)
Ore mined
292,468
267,853
9%
523,703
522,408
0%
Ore milled
271,816
263,933
3%
514,893
526,259
-2%
Metal Production
Silver (in thousands of ounces)
1,696
1,707
-1%
3,169
3,459
-8%
Gold (in thousands of ounces)
0.8
1.1
-27%
1.8
2.2
-18%
Lead (in thousands of pounds)
17,613
19,086
-8%
33,491
39,163
-14%
Zinc (in thousands of pounds)
7,483
7,133
5%
14,681
14,666
0%
Cash Costs
Cash cost per ounce of Silver, net of by-product credits
($)
(1.65)
(2.09)
21%
(1.54)
(1.77)
13%
All-in sustaining cost per ounce of silver, net of by-product credits
($)
7.35
6.99
5%
7.41
6.28
18%
Cash production cost per tonne of ore processed ($)
84.75
69.82
21%
81.60
68.47
19%
All-in sustaining cost per tonne of ore processed ($)
135.76
124.24
9%
133.90
118.46
13%
In Q2 Fiscal 2022, on a consolidated basis, the Company mined 292,468 tonnes of ore, up 9% or 24,615 tonnes, compared to 267,853 tonnes in Q2 Fiscal 2021.
Ore milled in Q2 Fiscal 2022 was 271,816 tonnes, up 3% or 7,883 tonnes, compared to 263,933 tonnes in Q2 Fiscal 2021, but 20,832 tonnes lower than mined
as a result of transportation interruptions caused by lengthy heavy rains at Ying Mining District in Q2 Fiscal 2022.
In Q2 Fiscal 2022, the Company sold approximately 1.7 million ounces of silver, 800 ounces of gold, 17.3 million pounds of lead, and 7.6 million pounds of zinc,
representing decreases of 1%, 64%, and 7% in silver, gold and lead sold, respectively, and an increase of 3% in zinc sold, compared to approximately 1.7 million
ounces of silver, 2,200 ounces of gold, 18.6 million pounds of lead, and 7.4 million pounds of zinc sold in Q2 Fiscal 2021. Gold sold in Q2 Fiscal 2021 included
1,200 ounces from the BYP Mine.
In Q2 Fiscal 2022, the consolidated cash production costs per tonne of ore processed was
$84.75
, up 21% compared to
$69.82
in Q2 Fiscal 2021. The
consolidated all-in sustaining production cost per tonne of ore processed was
$135.76
, up 9%, compared to
$124.24
in Q2 Fiscal 2021, but within the Company's
current annual cost guidance.
In Q2 Fiscal 2022, the consolidated cash cost per ounce of silver, net of by-product credits, was negative
$1.65
, compared to negative
$2.09
in the prior year
quarter. The increase was mainly due to the increase in per tonne cash production costs, offset by an increase of
$1.42
in by-product credits per ounce of silver.
Sales from lead and zinc in Q2 Fiscal 2022 amounted to
$23.2 million
, up
$3.6 million
, compared to
$19.6 million
in Q2 Fiscal 2021.
The consolidated all-in sustaining cost per ounce of silver, net of by-product credits, was
$7.35
, compared to
$6.99
in Q2 Fiscal 2021. The increase was mainly
due to the increase of cash cost per ounce of silver, net of by-product credits, offset by a decrease of
$2.0 million
in sustaining capital expenditures, mainly
resulting from less tunneling development.
In Q2 Fiscal 2022, on a consolidated basis, a total of 124,544 metres or
$6.2 million
worth of diamond drilling were completed (Q2 Fiscal 2021 – 71,274 metres
or
$2.5 million
), of which approximately 91,970 metres or
$2.4 million
worth of underground drilling were expensed as part of mining costs (Q2 Fiscal 2021 –
71,274 metres or
$2.5 million
) and approximately 32,574 metres or
$3.8 million
worth of drilling were capitalized (Q2 Fiscal 2021 – nil). In addition, approximately
9,953 metres or
$3.4 million
worth of preparation tunnelling were completed and expensed as part of mining costs (Q2 Fiscal 2021 – 7,693 metres or
$1.9
million
), and approximately 20,501 metres or
$8.3 million
worth of tunnels, raises, ramps and declines were completed and capitalized (Q2 Fiscal 2021 – 25,678
metres or
$8.5 million
).
INDIVIDUAL MINE OPERATING PERFORMANCE
Ying Mining District
Q2 2022
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Six months ended September 30,
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
September 30, 2020
2021
2020
Ore Production (tonne)
Ore mined
206,933
142,907
112,561
182,268
181,020
349,840
355,196
Ore milled
182,173
155,407
131,725
162,905
179,083
337,580
356,772
Head grades
Silver (gram/tonne)
283
279
280
297
288
281
290
Lead (%)
4.0
4.2
3.9
4.3
4.4
4.1
4.5
Zinc (%)
0.7
0.8
0.8
0.8
0.7
0.8
0.8
Recovery rates
Silver (%)
95.4
94.7
93.7
93.9
94.4
95.1
94.6
Lead (%)
95.5
95.7
95.1
96.4
96.1
95.6
96.1
Zinc (%)
56.0
59.7
65.0
63.3
57.9
57.8
60.9
Cash Costs
Cash cost per ounce of Silver, net of by-product credits
($)
0.71
0.80
1.20
(1.12)
(0.14)
0.75
(0.52)
All-in sustaining cost per ounce of silver, net of by-product credits
($)
6.88
6.54
10.00
5.24
6.63
6.71
5.34
Cash production cost per tonne of ore processed ($)
96.59
92.79
98.13
83.09
80.06
95.10
78.18
All-in sustaining cost per tonne of ore processed ($)
141.26
138.55
155.14
133.07
132.36
140.27
124.74
Metal Production
Silver (in thousands of ounces)
1,517
1,283
1,083
1,464
1,525
2,800
3,068
Gold (in thousands of ounces)
0.8
1.0
0.3
0.9
1.1
1.8
2.2
Lead (in thousands of pounds)
14,671
13,278
10,504
14,361
16,080
27,949
33,021
Zinc (in thousands of pounds)
1,584
1,519
1,496
1,857
1,643
3,103
3,563
In Q2 Fiscal 2022, a total of 102,905 metres or
$5.0 million
worth of diamond drilling were completed (Q2 Fiscal 2021 – 59,540 metres or
$2.0 million
) at the
Ying Mining District, of which approximately 72,844 metres or
$2.2 million
worth of underground drilling were expensed as part of mining costs (Q2 Fiscal 2021 –
59,540 metres or
$2.0 million
) and approximately 30,061 metres or
$2.8 million
worth of drilling were capitalized (Q2 Fiscal 2021 – nil). In addition, approximately
7,528 metres or
$2.9 million
worth of preparation tunnelling were completed and expensed as part of mining costs (Q2 Fiscal 2021 – 5,316 metres or
$1.6
million
), and approximately 16,676 metres or
$7.1 million
worth of horizontal tunnels, raises, ramps, and declines were completed and capitalized (Q2 Fiscal 2021
– 21,278 metres or
$7.5 million
).
GC Mine
Q2 2022
Q1 2021
Q4 2021
Q3 2021
Q2 2021
Six months ended September 30,
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
September 30, 2020
2021
2020
Ore Production (tonne)
Ore mined
85,535
88,328
50,511
97,177
86,833
173,863
167,212
Ore milled
89,643
87,670
48,949
97,743
84,850
177,313
169,487
Head grades
Silver (gram/tonne)
73
80
87
82
81
77
87
Lead (%)
1.7
1.5
1.7
1.4
1.8
1.6
1.8
Zinc (%)
3.3
3.3
3.3
3.5
3.4
3.3
3.4
Recovery rates
Silver (%)
84.4
84.1
81.9
82.6
82.5
84.2
82.7
Lead (%)
89.5
89.3
89.7
89.6
89.2
89.4
89.5
Zinc (%)
89.6
89.3
88.2
89.7
87.3
89.5
87.3
Cash Costs
Cash cost per ounce of Silver, net of by-product credits
($)
(22.51)
(17.96)
(12.80)
(14.43)
(12.70)
(20.12)
(9.52)
All-in sustaining cost per ounce of silver, net of by-product credits
($)
(11.61)
(7.98)
0.52
(1.05)
(1.78)
(9.70)
0.40
Cash production cost per tonne of ore processed ($)
55.81
52.90
58.56
54.07
48.47
54.33
47.80
All-in sustaining cost per tonne of ore processed ($)
73.76
71.67
87.69
78.63
69.07
72.69
67.49
Metal Production
Silver (in thousands of ounces)
179
190
112
212
182
369
384
Lead (in thousands of pounds)
2,942
2,600
1,652
2,750
3,006
5,542
6,072
Zinc (in thousands of pounds)
5,899
5,679
3,176
6,816
5,490
11,578
10,948
In Q2 Fiscal 2022, approximately 19,126 metres or
$0.7 million
worth of underground diamond drilling (Q2 Fiscal 2021 – 11,734 metres or
$0.5 million
) and 2,425
metres or
$0.4 million
of tunnelling (Q2 Fiscal 2021 – 2,377 metres or
$0.3 million
) were completed and expensed as mining preparation costs at the GC Mine. In
addition, approximately 3,825 metres or
$1.2 million
of horizontal tunnels, raises, and declines were completed and capitalized (Q2 Fiscal 2021 – 4,400 metres or
$1.0 million
).
Updates
In
October 2021
, the SGX Mine at the Ying Mining District suspended production temporarily as a precautionary measure due to the heavy rainfall experienced in
the Yellow River region. The water level at the nearby reservoir that discharges into the Yellow River reached an all time high, causing the operations at the SGX
Mine to be suspended for ten days, impacting production and ore head grades. Despite this interruption, the Company expects to maintain a similar mining
production rate as achieved in Q2 Fiscal 2022 and increase the milling tonnage at the Ying Mining District in the third quarter of Fiscal 2022.
As announced on
October 13, 2021
, the Company, through a 100% owned subsidiary of
Henan Found
, won an online auction to acquire the Kuanping Project for
a total of
$13.5 million
(RMB¥86.8 million) (the "Consideration"). The acquisition is not subject to the national security clearance as
Henan Found's
subsidiary is
considered as a domestic company in
China
. The Company paid the consideration in
October 2021
and expects to complete the acquisition in
November 2021
.
CONFERENCE CALL DETAILS
A conference call to discuss these results will be held tomorrow,
Friday, November 5
, at
9:00 am PDT
(
12:00 pm EDT
). To participate in the conference call,
please dial the numbers below.
Canada
/
USA
TF: 888-664-6383
International Toll: 416-764-8650
Conference ID: 03881964
Participants should dial-in 10 – 15 minutes prior to the start time. A replay of the conference call and transcript will be available on the Company's website at
www.silvercorp.ca
.
Mr.
Guoliang Ma
, P.Geo., Manager of Exploration and Resources of the Company, is the Qualified Person as defined by National Instrument 43-101 – Standards
of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and consented to the technical information contained in this news release.
This earnings release should be read in conjunction with the Company's Management Discussion & Analysis ("MD&A"), Financial Statements and Notes to
Financial Statements for the three and six months ended
September 30, 2021
, which have been posted on SEDAR under the Company's profile at
www.sedar.com and are also available on the Company's website at
www.silvercorp.ca
under the Investor section. This earnings release refers to various
alternative performance (non-IFRS) measures, such as adjusted earnings and adjusted earnings per share, cash cost and all-in sustaining cost per ounce of
silver, net of by-product credits, cash production cost and all-in sustaining production cost per tonne of ore processed and working capital. These measures are
widely used in the mining industry as a benchmark for performance, but do not have standardized meanings under IFRS as an indicator of performance and
may differ from methods used by other companies with similar description. The detailed description and reconciliation of these alternative performance (non-
IFRS) measures have been incorporated by reference and can be found on page 24, section 11 – Alternative Performance (Non-IFRS) Measures in the MD&A
for the three and six months ended
September 30, 2021
.
About Silvercorp
Silvercorp is a profitable Canadian mining company producing silver, lead and zinc metals in concentrates from mines in
China
. The Company's goal is to
continuously create healthy returns to shareholders through efficient management, organic growth, and the acquisition of profitable projects. Silvercorp balances
profitability, social and environmental relationships, employees' wellbeing, and sustainable development. For more information, please visit our website at
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 and the GC Mine; timing of receipt of permits and regulatory approvals; availability of funds from production to finance
the Company's operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company's
properties.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ
from those reflected in the forward-looking statements, including, without limitation, risks relating to: global economic and social impact of COVID-19; fluctuating
commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral
resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties;
property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors
affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions
into the Company's existing operations; competition; operations and political conditions; regulatory environment in
China
and
Canada
; environmental risks; foreign
exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control
over financial reporting; and bringing actions and enforcing judgments under U.S. securities laws.
This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Forward-looking statements are statements about the
future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the
forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's Annual
Information Form under the heading "Risk Factors". 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.
View original content to download multimedia:
https://www.prnewswire.com/news-releases/silvercorp-reports-adjusted-net-income-of-13-6-million-0-08-per-share-and-cash-flow-from-operations-of-30-9-million-for-q2-fiscal-2022--301417145.html
SOURCE
Silvercorp Metals Inc
View original content to download multimedia:
http://www.newswire.ca/en/releases/archive/November2021/04/c9296.html
%SEDAR: 00006210E
For further information:
Silvercorp Metals Inc., Lon Shaver, Vice President, Phone: (604) 669-9397, Toll Free 1(888) 224-1881, Email: [email protected],
Website: www.silvercorp.ca
CO: Silvercorp Metals Inc
CNW 17:05e 04-NOV-21