Silvercorp Reports Q3 Net Income of $6.3 Million, $0.04 PER Share, and Provides Fiscal 2021 Production and Cost Guidance
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NEWS RELEASE
Trading Symbol: TSX/NYSE AMERICAN: SVM
SILVERCORP REPORTS Q3 NET INCOME OF $6.3 MILLION, $0.04 PER SHARE,
AND PROVIDES FISCAL 2021 PRODUCTION AND COST GUIDANCE
VANCOUVER, British Columbia – February 6, 2020 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”)
(TSX/NYSE American : SVM) reported its financial and operating results for the third quarter ended
December 31, 2019 (“Q3 Fiscal 2020”). All amounts are expressed in US Dollars.
Q3 FISCAL YEAR 2020 HIGHLIGHTS
Ore mined up 1% to 262,586 tonnes compared to the prior year quarter (“Q3 Fiscal 2019”);
Sold approximately 1.7 million ounces of silver, 18.8 million pounds of lead, and 8.4 million pounds
of zinc, up 0%, 6% and 103%, respectively, compared to 1.7 million ounces of silver, 17.8 million
pounds of lead, and 4.1 million pounds of zinc in the prio r year quarter while gold sold was 700
ounces, down 36% compared to 1,100 ounces in the prior year quarter;
Ended the quarter with inventories of 3,815 tonnes of silver-lead concentrate and 270 tonnes of zinc
concentrate, down 9% and 5 4%, compared to 4,176 tonnes of silver -lead concentrate and 5 86
tonnes of zinc concentrate as at September 30, 2019;
Revenue up 5% to $44.5 million compared to the prior year quarter;
Gross profit margin of 42% compared to 46% in the prior year quarter;
Net income attributable to equity shareholders of $6.3 million, or $0.04 per share, a decrease of $2.4
million compared to $8.7 million, or $0.05 per share in the prior year quarter;
Cash flow from operations of $24.9 million, up 26% compared to $19.8 million in the pri or year
quarter;
Cash cost per ounce of silve r1, net of by -product credits, of negative $1.21, compared to negative
$2.77 in the prior year quarter;
All-in sustaining cost per ounce of silver 1, net of by -product credits, of $7. 21, compared to $ 6.53 in
the prior year quarter;
Paid $2.2 million in dividends to the Company’s shareholder;
Invested $3.8 million in New Pacific Metals Corp. (“NUAG”) through its public offering to maintain
the Company’s ownership interest at 28.9%; and,
Strong balance sheet with $155.1 million in cash and cash equivalents and short -term investments,
an increase of $19.9 million or 15% compared to $135.2 million as at September 30, 2019.
FINANCIALS
Net income attributable to equity shareholders of the Company in Q3 Fiscal 2020 was $6.3 million, or
$0.04 per share, a decrease of $2.4 million, compared to $8.7 million, or $0.05 per share in the third
quarter ended December 31, 2018.
Compared to Q3 Fiscal 2019, the Company’s financial results in Q3 Fiscal 2020 were mainly impacted by i)
1 Non-IFRS measure. Please refer to section 11 of the corresponding MD&A for reconciliation.
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increases of 17% and 20% in the average realized selling prices for silver and gold; ii) an increases of 6%
and 103% of lead and zinc sold; offset by iii) a decreases of 21% and 27% in the average realized selling
prices for lead and zinc, and iv) a $1.3 million foreign exchange loss.
Sales in Q3 Fiscal 2020 were $44.5 million, up 5% or $2.1 million, compared to $42.4 million in Q3 Fiscal
2019. Silver, gold, and base metals sales represented $24.0 million, $0.9 million, and $19.6 million,
respectively, compared to $20.7 million, $1.2 million, and $20.5 million, respectively, in Q3 Fiscal 2019.
Cost of sales in Q3 Fiscal 2020 was $25.6 million, an increase of $2.6 million or 11%, compared to $23.0
million in Q3 Fiscal 2019. The cost of sales included $18.4 million of cash production costs (Q3 Fiscal 2019
- $16.9 million), $1.3 million of mineral resources tax (Q3 Fiscal 2019 - $1.2 million), and $5.9 million
depreciation and amortization charges (Q3 Fiscal 2019 - $4.9 million ). The increase was mainly due to
more metals sold and an increase of 6% in cash production costs per tonne of ore processed.
Gross profit margin in Q3 Fiscal 2020 was 42%, compared to 46% in Q3 Fiscal 2019. Ying Mining District’s
gross profit margin was 46% compared to 47% in Q3 Fiscal 2019. GC Mine’s gross profit margin was 28%
compared to 38% in Q3 Fiscal 2019.
General and administrative expenses in Q3 Fiscal 2020 were $5.1 million, compared to $5.3 million in Q3
Fiscal 2019.
Foreign exchange loss in Q3 Fiscal 2020 was $1.3 million compared to a foreign exchange gain of $2.4
million in Q3 Fiscal 2019. The foreign exchange gain or loss is mainly driven by the fluctuation of the US
dollar against the Canadian dollar.
Share of loss in an associate in Q3 Fiscal 2020 was $0.3 million compared to $0.2 million gain in Q3 Fiscal
2019. The loss represents the Company’s equity pickup in NUAG.
Income tax expenses in Q3 Fiscal 2020 were $3.7 million compared to $5.1 million in Q3 Fiscal 2019. The
income tax expense recorded in Q3 Fiscal 2020 included current income tax expense of $2. 8 million (Q3
Fiscal 2019 – $4.4 million) and deferred income tax expense of $0.9 million (Q3 Fiscal 2019 – $0.8 million).
Cash flow provided by operating activities in Q 3 Fiscal 20 20 was $24.9 million, an increase of $ 5.1
million, compared to $19.8 million in Q3 Fiscal 2019.
For the nine months ended December 31 , 2019, net income attributable to equity shareholders of the
Company was $ 31.1 million or $0.1 8 per share, an increase of $ 3.5 million, compared to $ 27.6 million or
$0.16 per share in the same prior year period; sales were $ 140.0 million, up 3% or $4.4 million from
$135.6 million in the same prior year period; the share of loss in NUAG was $0.8 million, compared to $0.2
million in the same prior year period; and cash flow from operating activities was $71.0 million after
changes in working capital, up 14% or $9.0 million from $62.0 million in the same prior year period.
The Company ended Q3 Fiscal 2020 with $155.1 million in cash and short -term investments, an increase
of $19.9 million or 15%, compared to $135.2 million as at September 30, 2019.
Working capital as at December 31, 2019 was $133.7 million, an increase of $ 8.7 million or 7%, compared
to $125.0 million as at September 30, 2019.
OPERATIONS AND DEVELOPMENT
(i) Q3 Fiscal 2020 vs. Q3 Fiscal 2019
In Q3 Fiscal 2020, on a consolidated basis, the Company mined 262,586 tonnes of ore, an increase of 1%
or 2,308 tonnes, compared to 260,278 tonnes in Q3 Fiscal 2019. Ore mined at the Ying Mining District
and the GC Mine increased by 1,997 tonnes and 311 tonnes , respectively. Ore milled was 264,860 tonnes,
down 2% compared to 271,476 tonnes in Q3 Fiscal 2019.
In Q3 Fiscal 2020, the Company sold approximately 1.7 million ounces of silver, 18.8 million pounds of
lead, and 8.4 million pounds of zinc, up 0%, 6%, and 103%, respectively, compared to 1.7 million ounces of
silver, 17.8 million pounds of lead, and 4.1 million pounds of zinc in Q3 Fiscal 2019 while gold sold was 700
ounces, down 36% compared to 1,100 ounce in Q3 Fiscal 2019. As at December 31, 2019, the Company
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had inventories of 3,815 tonnes of silver-lead concentrate and 270 tonnes of zinc concentrate , down 9%
and 54% , respectively, compared to 4,176 tonnes of silver -lead concentrate and 586 tonnes of zinc
concentrate as at September 30, 2019.
In Q3 Fiscal 2020 , the consolidated total mining costs and cash mining costs were $78.65 and $57.54 per
tonne, an increase of 10% and 8%, respectively, compared to $71.76 and $53.49 per tonne, in Q3 Fiscal
2019. The increase in cash mining costs was mainly due to i) an increase of $0.6 million in mining
preparation costs arising from additional tunnelling, and ii) an increase of $0.5 million in mining
contractor costs. The consolidated total milling costs and cash milling costs in Q3 Fiscal 2020 were $13.58
and $12.01 per tonne, compared to $13.44 and $11.64 per tonne in Q3 Fiscal 2019.
The consolidated cash production costs per tonne of or e processed in Q3 Fiscal 2020 were $72.16, up 6%
compared to $67.95 in Q3 Fiscal 2019. The consolidated all -in sustaining production costs per tonne of ore
processed were $121.49, down 1% compared to $122.1 5 in Q3 Fiscal 2019, and below the Company’s
Fiscal 2020 annual guidance of $125.50.
In Q3 Fisca l 2020, the consolidated cash cost per ounce of silver, net of by -product credits, was negative
$1.21, compared to negative $2.77 in the prior year quarter. The increase was mainly due to an increase
of $1.5 million in cash production costs and a decrease of $1.2 million in by-product credits resulting from
lower net realized selling prices for lead and zinc, a decrease of 21% and 27%, respectively, partially offset
by the increase of lead and zinc sold . Sales of lead and zinc in the current quarter amounted to $ 19.2
million, a decrease of $1.0 million, compared to $20.2 million in the prior year quarter.
In Q3 Fiscal 2020, the consolidated all -in sustaining costs per ounce of silver, net of by -product credits,
were $7.21 compared to $6.53 in Q3 Fi scal 2019. The increase was mainly due to the increase in cash
production costs and the decrease in by-product credits as discussed above.
In Q3 Fiscal 2020, on a consolidated basis, approximately 28,978 metres or $1. 1 million worth of diamond
drilling (Q3 Fiscal 2019 – 27,440 metres or $0.7 million) and 12,912 metres or $3.3 million worth of
preparation tunnelling (Q3 Fiscal 2019 – 10,672 metres or $2.7 million) were completed and expensed as
mining preparation costs. In addition, approximately 22,237 metres or $7.5 million worth of horizontal
tunnels, raises, ramps and declines (Q3 Fiscal 2019 – 19,694 metres or $6.8 million) were completed and
capitalized.
(ii) Nine months ended December 31, 2019 vs. nine months ended December 31, 2018
For the nine months ended December 31 , 2019, on a consolidated basis, the Company mined 779,235
tonnes of ore, an increase of 5% or 33,840 tonnes, compared to 745,395 tonnes mined in the same prior
year period. Ore milled was 789,684 tonnes, up 5% or 40,740 tonnes, compared to 748,944 tonnes in the
same prior year period.
The Company sold approximately 5.5 million ounces of silver, 2,800 ounces of gold, 55.7 million pounds of
lead, and 22.3 million pounds of zinc, up 8%, 0%, 7%, and 45%, respectively, compared to 5.1 million
ounces of silver, 2,800 ounces of gold, 52.1 million pounds of lead, and 15.4 million pounds of zinc sold in
the same prior year period.
For the nine months ended December 31, 2019, the consolidated total mining costs and cash mining costs
were $76.31 and $55.13 per tonne, respectively, compared to $73.85 and $54.88 per tonne in the same
prior year period. The consolidated total milling costs and cash milling costs were $12.85 and $11.14,
respectively, compared to $13.22 and $11.08 per tonne in the same prior year period.
Correspondingly, the consolidated cash production costs per tonne of ore processed for th e nine months
ended December 31, 2019 were $68.93, a slight increase compared to $68.87 in the same prior year
period. The all-in sustaining production costs per tonne of ore processed were $ 117.12, an increase of 1%,
compared to $115.52 in the same prior year period. However, both the cash production costs and all -in
sustaining production costs per tonne were lower than the Company’s Fiscal 2020 annual guidance .
For the nine months ended December 31, 2019, the consolidated cash cost per ounce of silver, n et of by-
product credits, was negative $2.06, compared to negative $4.37 in the same prior year period. The
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increase was mainly due to a decrease of $2.22 in by -product credits per ounce of silver mainly resulting
from lower net realized selling price s for lead and zinc. Sales of lead and zinc for the nine months ended
December 31, 2019 amounted to $59.7 million, a decrease of $8.1 million, compared to $67.8 million in
the same period year period. The consolidated all -in sustaining costs per ounce of silver, net of by -
product credits was $5.6 4 compared to $3.27 in the same prior year period. The increase was mainly due
to the decrease in by -product credits as discussed above and an increase of $3.1 million in sustaining
capital expenditures.
For the nine months ended December 31, 2019, on a consolidated basis, approximately 93,544 metres or
$3.0 million worth of diamond drilling (same prior year period – 91,735 metres or $2.5 million) and 37,224
metres or $9.6 million worth of preparation tunnelling (same prior year period – 32,073 metres or $8.7
million) were completed and expensed as mining preparation costs. In addition, approximately 63,736
metres or $22.0 million worth of horizontal tunnels, raises, ramps and declines (same prior year period –
56,035 metres or $20.0 million) were completed and capitalized.
1. Ying Mining District, Henan Province, China
Table 1: Summary of operation results at the Ying Mining District
(i) Q3 Fiscal 2020 vs. Q3 Fiscal 2019
In Q3 Fiscal 2020, the total ore mined at the Ying Mining District was 176,149 tonnes, up 1% or 1,997
tonnes, compared to 174,152 tonnes in Q3 Fiscal 2019. Ore milled was 175,488 tonnes, down 5% or
9,196 tonnes, compared to 184,684 tonnes in Q3 Fiscal 2019.
Head grades of ore milled at the Ying Mining District in Q3 Fiscal 2020 were 296 grams per tonne (“g/t”)
for silver, 4.6% for lead, and 0.9% for zinc, compared to 296 g/t for silver, 4.1% for lead , and 0.8% for zinc
in Q3 Fiscal 2019.
In Q3 Fiscal 20 20, the Ying Mining District sold approximately 1.5 million ounces of silver, 14.9 million
pounds of lead, and 2.9 million pounds of zinc, compared to 1.5 million ounces of silver, 15.2 million
pounds of lead, and 0.4 million pounds of zinc in Q3 Fiscal 20 19. As at December 31, 2019, the Ying
Mining District had inventories of 3,625 tonnes of silver -lead concentrate and 190 tonnes zinc
concentrate, compared to 3,580 tonnes of silver -lead concentrate and 550 tonnes of zinc concentrate as
at September 30, 2019.
Total and cash mining costs per tonne at the Ying Mining District in Q3 Fiscal 2020 were $91.91 and
$64.69 per ton ne, an increase of 7% and 3%, respectively, compared to $86.27 and $63.04 per tonne in
Q3 Fiscal 2019. The increase in cash mining costs was mainly due to an increase of $0.4 million in mining
preparation costs arsing from an increase of 14% tunneling expensed and ii) an increase of $0.3 million in
mining contractor costs arising from an overall 3% increase in the mining contractors’ rate.
Ying Mining District Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019
December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 2019 2018
Ore Mined (tonne) 176,149 176,085 176,584 111,032 174,152 528,818 511,545
Ore Milled (tonne) 175,488 179,147 177,681 107,039 184,684 532,317 512,813
Head Grades
Silver (gram/tonne) 296 306 330 324 296 311 308
Lead (%) 4.6 4.5 4.6 4.5 4.1 4.6 4.4
Zinc (%) 0.9 0.8 0.9 0.9 0.8 0.9 0.9
Recoveries
Silver (%) 96.1 96.2 95.8 95.5 95.6 96.1 95.9
Lead (%) 96.3 95.7 95.9 96.1 95.2 95.9 95.6
Zinc (%) 70.3 58.6 58.3 63.7 50.2 62.6 52.1
Metal Sales
Silver (in thousands of ounce) 1,475 1,711 1,662 1,141 1,545 4,848 4,623
Gold (in thousands of ounce) 0.7 1.1 1.0 0.7 1.1 2.8 2.8
Lead (in thousands of pound) 14,912 16,389 14,835 10,310 15,156 46,137 45,828
Zinc (in thousands of pound) 2,882 1,428 2,090 2,464 381 6,400 4,162
Cash mining cost ($/tonne) 64.69 59.26 63.05 65.24 63.04 62.33 63.00
Shipping costs ($/tonne) 3.89 3.82 4.04 3.97 4.27 3.92 4.28
Cash milling costs ($/tonne) 10.99 9.81 9.15 12.57 10.49 9.98 9.98
Cash production costs ($/tonne) 79.57 72.89 76.24 81.78 77.80 76.23 77.26
All-in sustaining production costs ($/tonne) 126.43 117.37 129.41 141.63 135.47 124.31 123.86
Cash costs per ounce of silver ($) (0.72) (1.95) (1.44) (3.02) (1.74) (1.40) (3.43)
All-in sustaining costs per ounce of silver ($) 5.57 3.40 4.82 3.28 5.80 4.55 2.44
Nine months ended December 31,
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Total and cash milling costs per tonne at the Ying Mining District in Q3 Fiscal 2020 were $12.76 and
$10.99, an increase of 4% and 5%, respectively, compared to $12.24 and $10.49 in Q3 Fiscal 2019. The
increase in per tonne cash milling costs was mainly due to less ore milled resulting in a higher fixed costs
per tonne allocation.
Correspondingly, the cash production costs per tonne of ore processed at the Ying Mining District in Q3
Fiscal 2020 w ere $79.57, up 2% compared to $77.80 in the prior year quarter. The all -in sustaining cash
production costs per tonne of ore processed were $126.43, down 7% compared to $135.47 in the prior
year quarter, and the decrease was mainly due to a decrease of $2.0 m illion in sustaining capital
expenditures. The all-in sustaining cash production costs per tonne of ore processed at the Ying Mining
District were below the Fiscal 2020 annual guidance of $130.20.
Cash cost per ounce of silver, net of by -product credits, in Q3 Fiscal 2020 at the Ying Mining District, was
negative $0.72 compared to negative $1.74 in Q3 Fiscal 2019. The increase was mainly due to a decrease
of $0.78 in by -product credits per ounce of silver resulting from lower lead and zinc net realized selling
prices at the Ying Mining District. Sales from lead and zinc at the Ying Mining District in Q3 Fiscal 2020
were $12.9 million, a decrease of $1.7 million, compared to $14.6 million in Q3 Fiscal 2019.
All-in sustaining cost per ounce of silver, net of by -product credits, in Q3 Fiscal 2020 at the Ying Mining
District was $5.57 compared to $5.80 in Q3 Fiscal 2019. The decrease was mainly due to the decrease in
sustaining capital expenditures offset by the decrease in by-product credits as discussed above.
In Q3 Fiscal 2020, approximately 22,576 metres or $0.7 million worth of underground diamond drilling
(Q3 Fiscal 2019 – 20,351 metres or $0.4 million) and 5,329 metres or $1.8 million worth of preparation
tunnelling (Q3 Fiscal 2019 – 4,678 metres or $1.4 million) were completed and expensed as mining
preparation costs at the Ying Mining District. In addition, approximately 22,105 metres or $10.5 million
worth of horizontal tunnels, raises, ramps and declin es (Q3 Fiscal 2019 – 19,361 metres or $6.7 million)
were completed and capitalized.
(ii) Nine months ended December 31, 2019 vs. nine months ended December 31, 2018
For the nine months ended December 31, 2019, a total of 528,818 tonnes of ore were mined at the Ying
Mining District, an increase of 3% or 17,273 tonnes compared to 511,545 tonnes in the same prior year
period. Ore milled was 532,317 tonnes, an increase of 4% or 19,504 tonnes compared to 512,813 tonnes
in the same prior year period. Average head grades of ore processed were 311 g/t for silver, 4.6% for lead,
and 0.9% for zinc compared to 308 g/t for silver, 4.4% for lead, and 0.9% for zinc in the same prior year
period.
During the same time period, the Ying Mining District sold approximately 4.8 million ounces of silver,
2,800 ounces of gold, 46.1 million pounds of lead, and 6.4 million pounds of zinc, compared to 4.6 million
ounces of silver, 2,800 ounces of gold, 45.8 million pounds of lead, and 4.2 million pounds of zinc in the
same prior year period.
For the nine months ended December 31, 2019, the cash mining costs at the Ying Mining District were
$62.33 per tonne, down 1% compared to $63.00 in the prior year period while the cash milling costs were
$9.98 per tonne, unchanged compared to the prior year period.
Correspondingly, the cash production costs per tonne of ore processed were $76.23, down 1% compared
to $77.26 in the prior year period. The all -in sustaining production costs per tonne of ore processed were
$124.31, a slight increase com pared to $123.86 in the prior year period . Both the cash production costs
and all-in sustaining production costs per tonne were below its Fiscal 2020 annual guidance.
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, 2019, were negative $1.40 and $4.55 ,
respectively, compared to negative $3.43 and $2.44 in the same prior year period. The increase was
mainly due to the decrease in by -product credits per ounce of silver and the increase in sustaining capital
expenditures. Sales from lead and zinc at the Ying Mining Dis trict for the nine months ended December
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31, 2019 were $42.2 million, a decrease of $8.5 million, compared to $50.7 million in the same prior year
period.
For the nine months ended December 31, 2019, approximately 73,231 metres or $2.1 million worth of
underground diamond drilling (same prior year period – 69,872 metres or $1.5 million) and 17,278 metres
or $5.1 million worth of preparation tunnelling (same prior year period – 15,595 metres or $4.4 million)
were completed and expensed as mining preparation costs at the Ying Mining District. In addition,
approximately 62,661 metres or $24.3 million worth of horizontal tunnels, raises, and declines (same prior
year period – 54,923 metres or $19.2 million) were completed and capitalized.
2. GC Mine, Guangdong Province, China
Table 2: Summary of operation results at the GC Mine
i) Q3 Fiscal 2020 vs. Q3 Fiscal 2019
In Q3 Fiscal 2020, the total ore mined at the GC Mine was 86,437 tonnes, a slight increase compared to
86,126 tonnes in Q3 Fiscal 2019, while ore milled was 89,372 tonnes, an increase of 3% or 2,580 tonnes
compared to 86,792 tonnes in Q3 Fiscal 2019. Average head grades of ore processed at the GC Mine were
96 g/t for silver, 2.0% for lead, and 3.3% for zinc compared to 84 g/t for silver, 1.6% for lead, and 3.1% for
zinc in Q3 Fiscal 2019.
In Q3 Fiscal 2020, the GC Mine sold 234,000 ounces of silver, 3.9 million pounds of lead, and 5.5 million
pounds of zinc, an increase of 40%, 46%, and 47%, respectively, compared to 167,000 ounces of silver, 2.6
million pounds of lead, and 3.7 million pounds of zinc sold in Q3 Fiscal 2019.
Total and cash mining costs per tonne at the GC Mine in Q3 Fiscal 2020 were $51.60 and $42.96 per
tonne, respectively, an increase of 22% and 26% compared to $42.40 and $34.17 per tonne in Q3 Fiscal
2019. The increase was mainly due to i) an increase of $0.4 million in mining preparation costs resulting
from more tunnelling expensed and ii) an increase of $0.2 million in direct mining contractor’s costs as
more ore was mined using higher cost re -sueing mining method. Total and cash milling costs per tonne at
the GC Mine in Q3 F iscal 2020 were $15.20 and $14.01, respectively, compared to $15.98 and $14.08 in
Q3 Fiscal 2019.
Correspondingly, cash production costs per tonne of ore processed were $56.97, an increase of 18%
compared to $48.25 in Q3 Fiscal 2019, and all -in sustaining costs per tonne of ore processed were $ 71.03,
an increase of 25% compared to $56.88 in Q3 Fiscal 2019.
Cash costs per ounce of silver, net of by -product credits, at the GC Mine, were negative $4.33 compared
to negative $12.32 in Q3 Fiscal 2019 . The increase was mainly due to i) the increase in cash production
GC Mine Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019
December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 2019 2018
Ore Mined (tonne) 86,437 83,172 80,808 50,368 86,126 250,417 233,850
Ore Milled (tonne) 89,372 86,134 81,861 52,865 86,792 257,367 236,131
Head Grades
Silver (gram/tonne) 96 100 95 101 84 97 83
Lead (%) 2.0 2.0 1.9 1.8 1.6 1.9 1.4
Zinc (%) 3.3 3.2 3.4 3.3 3.1 3.3 2.9
Recovery Rates
Silver (%) 78.0 75.9 76.8 81.3 80.5 76.9 77.6
Lead (%) 90.4 88.3 88.7 91.5 91.6 89.2 90.1
Zinc (%) 85.5 86.1 85.7 85.7 85.5 85.8 84.7
Metal Sales
Silver (in thousands of ounce) 234 183 193 173 167 610 453
Lead (in thousands of pound) 3,867 2,680 3,007 2,360 2,644 9,553 6,290
Zinc (in thousands of pound) 5,471 5,227 5,244 4,874 3,730 15,942 11,214
Cash mining cost ($ per tonne) 42.96 37.80 38.83 40.58 34.17 39.91 37.12
Cash milling cost ($ per tonne) 14.01 12.72 13.85 18.52 14.08 13.53 13.46
Cash production cost ($ per tonne) 56.97 50.52 52.68 59.10 48.25 53.44 50.58
All-in sustaining production costs ($/tonne) 71.03 62.94 67.33 72.11 56.88 67.14 61.71
Cash cost per ounce of silver ($) (4.33) (9.98) (8.38) (10.23) (12.32) (7.30) (14.02)
All-in sustaining cost per ounce of silver ($) 2.18 (2.89) (0.96) (4.97) (6.54) (0.33) (6.78)
Nine months ended December 31,
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costs as discussed above , ii) the decrease in by -product credits per ounce of silver resulting from more
silver sold, and iii) the decrease in lead and zinc realized selling prices. All -in sustaining costs per ounce of
silver, net of by-product credits, in Q3 Fiscal 2020 at the GC Mine were $2.18 compared to negative $6.54
in Q3 Fiscal 2019.
In Q3 Fiscal 2020, approximately 6,402 metres or $0.3 million worth of underground diamond drilling (Q3
Fiscal 2019 – 7,089 metres or $0.3 million) and 6,599 metres or $1.5 million worth of tunnelling (Q3 Fiscal
2019 – 5,994 metres or $1.3 million) were completed and expensed as mining preparation costs at the GC
Mine. In addition, approximately 532 met res or $0.3 million of horizontal tunnels, raises and declines (Q3
Fiscal 2019 – 333 metres or $0.1 million) were completed and capitalized.
ii) Nine months ended December 31, 2019 vs. nine months ended December 31, 2018
For the nine months ended December 3 1, 2019, a total of 250,417 tonnes of ore were mined and 257,367
tonnes were milled at the GC Mine, an increase of 7% and 9%, respectively, compared to 233,850 tonnes
mined and 236,131 tonnes milled in the same prior year period. Average head grades of ore milled were
97 g/t for silver, 1.9% for lead, and 3.3% for zinc compared to 83 g/t for silver, 1.4% for lead, and 2.9% for
zinc in the same prior year period.
During the same time period, the GC Mine sold approximately 610,000 ounces of silver, 9.6 mill ion
pounds of lead, and 15.9 million pounds of zinc, an increase of 35%, 52%, and 42%, respectively,
compared to 45 3,000 ounces of silver, 6.3 million pounds of lead, and 11.2 million pounds of zinc in the
same prior year period.
For the nine months end ed December 31, 2019, the cash mining costs at the GC Mine were $39.91 per
tonne, an increase of 8% compared to $37.12 per tonne in the same prior year period. The cash milling
costs were $13.53 per tonne, a slight increase of 1% compared to $13.46 per tonne in the same prior year
period. Correspondingly, the cash production costs per tonne of ore processed at the GC Mine were
$53.44, an increase of 6% compared to $50.58 in the same prior year period. The all -in sustaining cash
production costs per tonne of ore processed were $67.14 compared to $61.71 in the same prior year
period.
Cash costs 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, 2019, were neg ative $7.30 and negative $0. 33,
respectively, compared to negative $14.02 and negative $6.78 in the same prior year period.
For the nine months ended December 31, 2019, approximately 20,313 metres or $0.9 million worth of
underground diamond drilling (same prior year period – 21,863metres or $1.0 million) and 18,962 metres
or $4.5 million of tunnelling (same prior year period – 16,478 metres or $4.3 million) were completed and
expensed as mining preparation costs at the GC Mine. In addition, approximately 1,476 metres or $1.0
million of horizontal tunnels, raise, and declines (same prior year period – 1,112 metres or $0.8 millio n)
were completed and capitalized.
Fiscal 2021 Production, Cash Cost, and Capital Expenditure Guidance
In Fiscal 2021, the Company expects to process approximately 930,000 - 970,000 tonnes of ore, yielding
6.2 million to 6.5 million ounces of silver, 66.1 million to 68.5 million pounds of lead, and 24.5 million to
26.7 million pounds of zinc. Fiscal 2021 production guidance represents an increase of approximately 2%
to 7% in silver production, 2% to 5% in lead production, and 12% to 22% in zinc produc tion compared to
the current Fiscal 2020 annual guidance.
8
Table 3: Fiscal 2021 production and cash cost guidance
*Both AISC and cash costs are non -IFRS measures. AISC refers to all -in sustaining costs per tonne of ore processed. Cash costs refer
to cash production costs per tonne of ore processed. Foreign exchange rates assumptions used are: US$1 = CAD$1.30, US$1 =
RMB¥6.90.
The Company has been consistently active exploring its existing mining permit areas through drilling and
tunneling, with the objective of replacing the ore depleted annually. In recent years, the Company has
embarked on a capital investment program at both of its mining operations with the objective of adding
facilities and infrastructure that will enhance the efficiency and fut ure profitability of the mines. This
program includes the excavation of additional access ramps and tunnels which are expected to facilitate
the efficient movement of ore, equipment and personnel within the mines, as well as provide access to
new areas of mineralization that may be suitable for mining in current and future periods. Depending on
the extent of each project and the rate of development progress, the spending associated with these
projects may be spread across several reporting periods until they are complete.
For Fiscal 2021, the Company plans to i) complete 8,300 metres of ramp development tunneling at
estimated capitalized expenditures of $6.9 million, representing a 43% increase in meterage and a 15%
increase in total cost compared to Fiscal 2020 guidance; ii) complete 92,300 metres of exploration and
other development tunneling at estimated capitalized expenditures of $30.1 million, representing a 52%
increase in meterage and a 44% increase in total cost compared to Fiscal 2020 guidance , and iii) spend
$5.4 million on equipment and facilities, a decrease of 46% compared to Fiscal 2020 guidance. The total
capital expenditures are budgeted at $42.4 million, representing an increase of 15% compared to Fiscal
2020 annual guidance. The Company als o plans to complete and expense 34,600 metres of mining
preparation tunneling and 105,000 metres of diamond drilling. The table below summarizes the work plan
and estimated capital expenditures in Fiscal 2021.
Table 4: Fiscal 2021 Capitalized work plan and capital expenditure estimates
(a) Ying Mining District
In Fiscal 2021, the Company plans to mine and process 640,000 to 660,000 tonnes of ore at the Ying
Mining District averaging 292 g/t silver, 4.3% lead, and 0.9% zinc with expected metal production of 5.6
million to 5.8 million ounces of silver, 56.6 million to 58.0 million pounds of lead, and 7.0 million to 8.0
million pounds of zinc. Fiscal 2021 production guidance at the Ying Mining District represents an increase
of approximately 2% to 5% in silver production, 1% to 3% in lead production, and 11% to 27% in zinc
production compared to its Fiscal 2020 annual guidance.
Ore processed Silver Lead Zinc
(tonnes) (g/t) (%) (%)
Ying Mining District 640,000 - 660,000 292 4.3 0.9
GC Mine 290,000 - 310,000 96 1.7 3.3
Consolidated 930,000 - 970,000
Silver Lead Zinc Cash cost* AISC*
(Moz) (Mlbs) (Mlbs) ($/t) ($/t)
Ying Mining District 5.6 - 5.8 56.6 - 58.0 7.0 - 8.0 74.7-82.5 133.5 - 140.5
GC Mine 0.6 - 0.7 9.5 - 10.5 17.5 - 18.7 52.2-57.5 78.5 - 82.9
Consolidated 6.2 - 6.5 66.1 - 68.5 24.5 - 26.7 66.6-73.6 122.6-135.5
Expensed Tunneling Expensed Drilling
Equipment &
Facilities Mining Preparation Exploration Drilling
(Metres) ($ Million) (Metres) ($ Million) ($ Million) (Metres) ($ Million) (Metres) (Metres)
Ying Mining District 6,700 5.5 81,300 26.9 4.6 88,000 37.0 21,100 79,300
GC Mine 1,600 1.4 11,000 3.2 0.8 12,600 5.4 13,500 25,700
Consolidated 8,300 6.9 92,300 30.1 5.4 100,600 42.4 34,600 105,000
Capitalized Development Work and Expenditures
Ramp Development Exploration and
Development Tunnels Total