Silvercorp Reports Adjusted Net Income of $15.8 Million, $0.09 Per Share, and Cash Flow From Operations of $36.5 Million for Q1 Fiscal 2022
Silvercorp Reports Adjusted Net Income of $15.8 Million, $0.09 Per Share,
and Cash Flow From Operations of $36.5 Million for Q1 Fiscal 2022
Trading Symbol:
TSX:
SVM
NYSE AMERICAN: SVM
VANCOUVER, BC
,
Aug. 5, 2021
/CNW/ - Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX: SVM) (NYSE American: SVM) reported its financial and
operating results for the first quarter ended
June 30, 2021
("Q1 Fiscal 2022"). All amounts are expressed in US Dollars, and figures may not add due to rounding.
Q1 FISCAL 2022 HIGHLIGHTS
Mined 231,235 tonnes of ore and milled 243,077 tonnes of ore, down 9% and 7% compared to the prior year quarter due primarily to slow downs during
contract renewal negotiations with mining contractors, which were successfully completed as announced
July 13, 2021
;
Sold approximately 1.6 million ounces of silver, 1,000 ounces of gold, 16.8 million pounds of lead, and 7.3 million pounds of zinc, representing decreases of
12%, 9%, and 20% in silver, gold and lead sold, and an increase of 4% in zinc sold, compared to the prior year quarter;
Revenue of
$58.8 million
, up 26% compared to
$46.7 million
in the prior year quarter;
Net income attributable to equity shareholders of
$12.2 million
, or
$0.07
per share, compared to
$15.5 million
, or
$0.09
per share in the prior year quarter;
Adjusted earnings attributable to equity shareholders of
$15.8 million
, or
$0.09
per share, compared to
$9.6 million
, or
$0.05
per share in the prior year
quarter. The adjustments were made to remove the impacts from non-recurring items, share-based compensation, foreign exchange, mark-to-market equity
investments, and the share of associates' operating results.
Income from mine operations in Q1 Fiscal 2022 was
$25.5 million
, up 32% compared to
$19.3 million
in prior year quarter.
Cash flow from operations of
$36.5 million
, up 21% or
$6.4 million
compared to
$30.1 million
in the prior year quarter;
Cash cost per ounce of silver, net of by-product credits, of negative
$1.43
compared to negative
$1.48
in the prior year quarter;
All-in sustaining cost per ounce of silver, net of by-product credits, of
$7.46
, compared to
$5.61
in the prior year quarter;
Paid
$2.2 million
of dividends to the Company's shareholders;
Invested
$5.0 million
in Whitehorse Gold Corp. ("WHG") to increase the Company's ownership interest in WHG by 2.5% to 29.5%; and,
Strong balance sheet with
$214.4 million
in cash and cash equivalents and short-term investments, up
$15.3 million
or 8% 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
$243.2 million
as at
June 30, 2021
.
CONSOLIDATED FINANCIAL RESULTS
Three months ended June 30,
2021
2020
Changes
Financial
Revenue (in thousands of $)
$
58,819
$
46,705
26%
Mine operating earnings (in thousands of $)
25,504
19,285
32%
Net income attributable to equity shareholders
12,212
15,491
-21%
Earnings per share - basic ($/share)
0.07
0.09
-22%
Adjusted earnings attributable to equity shareholders
15,771
9,566
65%
Adjusted earning per share - basic ($/share)
0.09
0.05
80%
Net cash generated from operating activities (in thousands of $)
36,452
30,142
21%
Capitalized expenditures (in thousands of $)
11,172
10,220
9%
Cash and cash equivalents and short-term investments (in thousands of $)
214,426
178,386
20%
Working capital (in thousands of $)
188,905
153,732
23%
Metals sold
Silver (in thousands of ounces)
1,642
1,872
-12%
Gold (in thousands of ounces)
1.0
1.1
-9%
Lead (in thousands of pounds)
16,810
20,885
-20%
Zinc (in thousands of pounds)
7,255
6,958
4%
Average Selling Price, Net of Value Added Tax and Smelter Charges
Silver ($/ounce)
20.70
13.99
48%
Gold ($/ounce)
1,508
1,343
12%
Lead ($/pound)
0.86
0.69
25%
Zinc ($/pound)
1.02
0.60
70%
Net income attributable to equity shareholders of the Company
in Q1 Fiscal 2022 was
$12.2 million
or
$0.07
per share, compared to
$15.5 million
or
$0.09
per share in three months ended
June 30, 2020
("Q1 Fiscal 2021").
Adjusted earnings attributable to equity
shareholders of the Company in Q1 Fiscal 2022 was
$15.8 million
, or
$0.09
per share, compared to
$9.6 million
, or
$0.05
per share Q1 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 mark-to-market equity investments, and one-time items.
In Q1 Fiscal 2022, the Company's consolidated financial results were mainly impacted by i) an increase of 48%, 12%, 25%, and 70%, respectively, in the realized
selling prices for silver, gold, lead and zinc; offset by ii) a decrease of 12%, 9%, and 20%, respectively, in silver, gold, and lead sold; iii) lower production; and iv)
the depreciation of the US dollar against the Company's functional currencies, mainly the Chinese yuan and the Canadian dollar.
Revenue
in Q1 Fiscal 2022 was
$58.8 million
, up 26% or
$12.1 million
compared to
$46.7 million
in Q1 Fiscal 2021. The increase was mainly due to i) an
increase of
$19.3 million
arising from the increase in the net realized selling metal prices; ii) an increase of
$1.3 million
arising from the increase in the quantities of
zinc sold; offset by iii) a decrease of
$8.5 million
arising from the decrease in the quantities of silver, gold, and lead sold. Revenues from silver, gold, and base
metal were
$34.0 million
,
$1.5 million
, and
$23.3 million
, respectively, up 30%, 2%, and 22%, respectively, compared to
$26.2 million
,
$1.5 million
, and
$19.0
million
in Q1 Fiscal 2021. Revenue from the Ying Mining District was
$47.4 million
, up 19%, compared to
$39.7 million
in Q1 Fiscal 2021. Revenue from the GC
Mine was
$11.4 million
, up 62%, compared to
$7.0 million
in Q1 Fiscal 2021.
Income from mine operations
in Q1 Fiscal 2022 was
$25.5 million
, up 32% compared to
$19.3 million
in prior year quarter. Income from mine operations at the
Ying Mining District was
$21.2 million
, up 20% compared to
$17.6 million
in Q1 Fiscal 2021. Income from mine operations at the GC Mine was
$4.4 million
, up
144% compared to
$1.8 million
in Q1 Fiscal 2021.
Cash flow provided by operating activities
in Q1 Fiscal 2022 was
$36.5 million
, up 21% or
$6.3 million
, compared to
$30.1 million
in Q1 Fiscal 2021.
The Company ended the quarter with
$214.4 million
in cash, cash equivalents and short-term investments, up 8% or
$15.3 million
, compared to
$199.1 million
as
at
March 31, 2021
.
Working capital as at
June 30, 2021
was
$188.9 million
, up 3% or
$4.9 million
, compared to
$184.0 million
as at
March 31, 2021
.
Consolidated
OPERATIONAL RESULTS
Three months ended June 30,
2021
2020
Changes
Ore Production (tonne)
Ore mined
231,235
254,555
-9%
Ore milled
243,077
262,326
-7%
Metal Proudction
Silver (in thousands of ounces)
1,474
1,752
-16%
Gold (in thousands of ounces)
1.0
1.1
-9%
Lead (in thousands of pounds)
15,878
20,077
-21%
Zinc (in thousands of pounds)
7,198
7,533
-4%
Cash Costs
Cash cost per ounce of Silver, net of by-product credits
($)
(1.43)
(1.48)
3%
All-in sustaining cost per ounce of silver, net of by-product credits
($)
7.46
5.61
33%
Cash production cost per tonne of ore processed ($)
77.55
67.05
16%
All-in sustaining cost per tonne of ore processed ($)
131.48
112.59
17%
In Q1 Fiscal 2022, on a consolidated basis, the Company mined 231,235 tonnes of ore, down 9% or 23,320 tonnes, compared to 254,555 tonnes in Q1 Fiscal
2021. Ore milled in Q1 Fiscal 2022 was 243,077 tonnes, down 7% or 19,249 tonnes, compared to 262,326 tonnes in Q1 Fiscal 2021. The decrease was
primarily a result of the Company's mining contract renewal negotiation at the Ying Mining District as reported in the Company's news releases dated
July 13
and
April 28
, 2021. Contracts were renewed for an additional 2 years in mid
May 2021
, and the Company expects to increase production in the remaining three
quarters and meet its annual guidance.
In Q1 Fiscal 2022, the Company produced approximately 1.5 million ounces of silver, 1,000 ounces of gold, 15.9 million pounds of lead, and 7.2 million pounds of
zinc, compared to 1.8 million ounces of silver, 1,100 ounces of gold, 20.1 million pounds of lead, and 7.5 million pounds of zinc sold in Q1 Fiscal 2021.
Compared to Q1 Fiscal 2021, the Company's consolidated per tonne costs in the current quarter were mainly impacted by i) 9% appreciation of the Chinese yuan
against the US dollar resulting in higher costs presented in the US dollar; ii) an average 7% increase in frontline workers' pay rate, iii) lower production at the Ying
Mining District resulting in higher per tonne fixed cost allocation, and iv) an overall of 14.5% increase in mining contractors' fee rate at the Ying Mining District as
reported previously in the Company's news release dated
May 20
, 2021. The consolidated cash production cost and all-in sustaining production cost per tonne of
ore processed were
$77.55
and
$131.48
, up 16% and 17%, respectively, compared to
$67.05
and
$112.59
in Q1 Fiscal 2021, but both were in line with the
Company's Fiscal 2022 annual guidance.
In Q1 Fiscal 2022, the consolidated cash cost per ounce of silver, net of by-product credits, was negative
$1.43
, compared to negative
$1.48
in the prior year
quarter. The increase was mainly due to the increase in per tonne cash production costs as discussed above, offset by an increase of
$4.16
in by-product credits
per ounce of silver. Sales from lead and zinc in Q1 Fiscal 2022 amounted to
$21.8 million
, up
$3.3 million
, compared to
$18.5 million
in Q1 Fiscal 2021.
The consolidated all-in sustaining cost per ounce of silver, net of by-product credits, was
$7.46
, compared to
$5.61
in Q1 Fiscal 2021. The increase was mainly
due to the increase in per tonne all-in sustaining production cost, offset by an increase of
$4.16
in by-product credits per ounce of silver.
In Q1 Fiscal 2022, on a consolidated basis, a total of 107,913 metres or
$4.6 million
worth of diamond drilling were completed (Q1 Fiscal 2021 – 36,697 metres
or
$1.1 million
), of which approximately 50,666 metres or
$1.3 million
worth of underground drilling were expensed as part of mining costs (Q1 Fiscal 2021 –
36,697 metres or
$1.1 million
) and approximately 57,247 metres or
$3.3 million
worth of exploration drilling were capitalized (Q1 Fiscal 2021 – nil). In addition,
approximately 6,955 metres or
$2.8 million
worth of preparation tunnelling were completed and expensed as part of mining costs (Q1 Fiscal 2021 – 10,142
metres or
$2.6 million
), and approximately 17,263 metres or
$6.6 million
worth of tunnels, raises, ramps and declines were completed and capitalized (Q1 Fiscal
2021 – 26,375 metres or
$9.0 million
).
INDIVIDUAL MINE OPERATING PERFORMANCE
Ying Mining District
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
June 30, 2021
March 31, 2021
December 31, 2020
September 30, 2020
June 30, 2020
Ore Production (tonne)
Ore mined
142,907
112,561
182,268
181,020
174,176
Ore milled
155,407
131,725
162,905
179,083
177,689
Head grades
Silver (gram/tonne)
279
280
297
288
293
Lead (%)
4.2
3.9
4.3
4.4
4.6
Zinc (%)
0.8
0.8
0.8
0.7
0.8
Recovery rates
Silver (%)
94.7
93.7
93.9
94.4
94.7
Lead (%)
95.7
95.1
96.4
96.1
96.2
Zinc (%)
59.7
65.0
63.3
57.9
63.8
Cash Costs
Cash cost per ounce of Silver, net of by-product credits
($)
0.80
1.20
(1.12)
(0.14)
(0.87)
All-in sustaining cost per ounce of silver, net of by-product credits
($)
6.54
10.00
5.24
6.63
4.14
Cash production cost per tonne of ore processed ($)
92.79
98.13
83.09
80.06
76.21
All-in sustaining cost per tonne of ore processed ($)
138.55
155.14
133.07
132.36
116.99
Metal Production
Silver (in thousands of ounces)
1,283
1,083
1,464
1,525
1,544
Gold (in thousands of ounces)
1.0
0.3
0.9
1.1
1.2
Lead (in thousands of pounds)
13,278
10,504
14,361
16,080
16,941
Zinc (in thousands of pounds)
1,519
1,496
1,857
1,643
1,920
In Q1 Fiscal 2022, a total of 89,189 metres or
$3.9 million
worth of diamond drilling were completed (Q1 Fiscal 2021 – 28,485 metres or
$0.8 million
) at the Ying
Mining District, of which approximately 31,942 metres or
$0.7 million
worth of underground drilling were expensed as part of mining costs (Q1 Fiscal 2021 –
28,485 metres or
$0.8 million
) and approximately 57,247 metres or
$3.3 million
worth of exploration drilling were capitalized (Q1 Fiscal 2021 – nil). In addition,
approximately 6,501 metres or
$2.5 million
worth of preparation tunnelling were completed and expensed as part of mining costs (Q1 Fiscal 2021 – 6,207 metres
or
$1.8 million
), and approximately 12,973 metres or
$5.4 million
worth of horizontal tunnels, raises, ramps, and declines were completed and capitalized (Q1
Fiscal 2021 – 23,108 metres or
$7.8 million
).
GC Mine
Q1 2022
Q4 2021
Q3 2021
Q2 2021
Q1 2021
June 30, 2021
March 31, 2021
December 31, 2020
September 30, 2020
June 30, 2020
Ore Production (tonne)
Ore mined
88,328
50,511
97,177
86,833
80,379
Ore milled
87,670
48,949
97,743
84,850
84,637
Head grades
Silver (gram/tonne)
80
87
82
81
93
Lead (%)
1.5
1.7
1.4
1.8
1.9
Zinc (%)
3.3
3.3
3.5
3.4
3.4
Recovery rates
Silver (%)
84.1
81.9
82.6
82.5
82.8
Lead (%)
89.3
89.7
89.6
89.2
89.8
Zinc (%)
89.3
88.2
89.7
87.3
87.3
Cash Costs
Cash cost per ounce of Silver, net of by-product credits
($)
(17.96)
(12.80)
(14.43)
(12.70)
(6.59)
All-in sustaining cost per ounce of silver, net of by-product credits
($)
(7.98)
0.52
(1.05)
(1.78)
2.41
Cash production cost per tonne of ore processed ($)
52.90
58.56
54.07
48.47
47.08
All-in sustaining cost per tonne of ore processed ($)
71.67
87.69
78.63
69.07
65.84
Metal Production
Silver (in thousands of ounces)
190
112
212
182
209
Lead (in thousands of pounds)
2,600
1,652
2,750
3,006
3,136
Zinc (in thousands of pounds)
5,679
3,176
6,816
5,490
5,613
In Q1 Fiscal 2022, approximately 18,724 metres or
$0.6 million
worth of underground diamond drilling (Q1 Fiscal 2021 – 8,212 metres or
$0.3 million
) and 454
metres or
$0.3 million
of tunnelling (Q1 Fiscal 2021 – 3,458 metres or
$0.8 million
) were completed and expensed as mining preparation costs at the GC Mine. In
addition, approximately 4,290 metres or
$1.2 million
of horizontal tunnels, raises, and declines were completed and capitalized (Q1 Fiscal 2021 – 3,267 metres or
$1.2 million
).
CONFERENCE CALL DETAILS
A conference call to discuss these results will be held tomorrow,
Friday, August 6
, 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: 22851634
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 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. 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. Accordingly, to facilitate a better understanding of these measures as calculated by the Company, please refer to section 10 – Alternative
Performance (Non-IFRS) Measures of the corresponding MD&A for detailed description and reconciliation.
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.
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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 17:19e 05-AUG-21