Silvercorp Reports Adjusted Net Income of $11.5 Million, $0.06 per Share, and Cash Flow from Operations of $23.6 Million for Q3 Fiscal 2024
- Revenue of $58.5 million for Q3 Fiscal 2024
- Net income of $10.5 million for Q3 Fiscal 2024
- Strong balance sheet with $198.3 million in cash and cash equivalents
- Increase in gold and zinc production
- Decrease in silver and lead production
Insights
Reviewing Silvercorp Metals Inc.'s financial and operating results for Q3 Fiscal 2024, several key indicators stand out. The company's revenue remained relatively stable with a negligible 0% year-over-year change, suggesting a consistent market position. However, there was a 12% decrease in net income attributable to equity shareholders, which could be attributed to various factors such as the mixed performance in metal sales volume and fluctuating commodity prices.
Notably, the increase in mine operating earnings by 7% indicates improved operational efficiency, which is corroborated by the 4% reduction in production costs per tonne of ore processed. This reduction, alongside the 17% improvement in cash costs per ounce of silver (net of by-product credits), reflects a favorable cost management strategy. However, the 22% increase in all-in sustaining costs per ounce of silver could raise concerns about the sustainability of cost controls in the long term, especially if the trend continues.
Investors should also consider the company's strong balance sheet, with a 5% increase in cash and cash equivalents and short-term investments. This financial health is crucial for funding future expansions, like the takeover bid for OreCorp Limited. The capital expenditures, which increased by 27%, reflect the company's commitment to growth through exploration and development.
From a market perspective, Silvercorp's performance in Q3 Fiscal 2024 presents a mixed outlook. The mining and milling of increased ore tonnage suggests a ramp-up in operations, which could cater to future demand surges. However, the decreases in silver and lead production and the volatile price of zinc (down 15% in realized selling price) could indicate potential volatility in the commodities market that may impact future revenues.
It is also important to analyze the off-market takeover bid for OreCorp Limited, which represents a strategic move to expand resources and market reach. The success of this acquisition could significantly affect the company's market position and stock performance. Investors should monitor this development closely as it unfolds.
The strong balance sheet and working capital also provide the company with resilience against market downturns and the ability to invest in high-return projects. This financial stability is a positive sign for investor confidence in the company's management and future prospects.
Operationally, Silvercorp's Q3 Fiscal 2024 results highlight several industry-specific factors. The increase in gold and zinc production by 22% and 6% respectively, against the backdrop of a decrease in silver and lead output, points to a strategic shift in mining operations, possibly in response to market demands and ore availability. The stockpiling of ores for processing in the subsequent quarter is a strategic decision likely aimed at optimizing production schedules around the Chinese New Year holiday, a common practice in the industry.
The negative cash costs per ounce of silver, net of by-product credits, is a remarkable achievement that underscores the company's competitive advantage in cost efficiency. This metric, however, should be evaluated in light of the all-in sustaining costs, which saw an increase. The capitalized exploration and development expenditures show a commitment to sustaining long-term production capabilities, a critical aspect of mining operations.
Understanding the nuances of head grades and recovery rates is essential for stakeholders, as these factors directly impact the quantity and quality of metal production. The reported head grades and recovery rates provide insight into the ore body characteristics and the efficiency of the mining process, which are vital for predicting future performance.
Trading Symbol: TSX: SVM
NYSE AMERICAN: SVM
HIGHLIGHTS FOR Q3 FISCAL 2024
- Mined 345,273 tonnes of ore, milled 312,500 tonnes of ore, and produced approximately 1,342 ounces of gold, 1.7 million ounces of silver, or approximately 1.8 million ounces of silver equivalent, plus 16.8 million pounds of lead and 7.4 million pounds of zinc;
- Sold approximately 1,342 ounces of gold, 1.7 million ounces of silver, 16.2 million pounds of lead, and 7.3 million pounds of zinc, for revenue of
$58.5 million - Reported net income attributable to equity shareholders of
$10.5 million $0.06 - Realized adjusted earnings attributable to equity shareholders of
$11.5 million $0.06 - Generated cash flow from operating activities of
$23.6 million - Cash costs per ounce of silver, net of by-product credits, of negative
$0.96 - All-in sustaining costs per ounce of silver, net of by-product credits, of
$11.33 - Spent and capitalized
$1.6 million $14.1 million $3.9 million $1.3 million - Entered into a Bid Implementation Deed ("BID") with OreCorp Limited (ASX: ORR) ("OreCorp") to launch an off-market takeover to acquire all OreCorp Shares not already owned by Silvercorp for
A cash plus 0.0967 common shares of Silvercorp per OreCorp Share; and$0.19 - Strong balance sheet with
$198.3 million $139.5 million
CONSOLIDATED FINANCIAL RESULTS
Three months ended December 31, | Nine months ended December 31, | ||||||
2023 | 2022 | Changes | 2023 | 2022 | Changes | ||
Financial Results | |||||||
Revenue (in thousands of $) | $ 58,508 | $ 58,651 | 0 % | $ 172,506 | $ 173,982 | -1 % | |
Mine operating earnings (in thousands of $) | 23,307 | 21,744 | 7 % | 67,551 | 61,007 | 11 % | |
Net income (loss) attributable to equity holders (in thousands of $) | 10,510 | 11,916 | -12 % | 30,777 | 20,373 | 51 % | |
Earnings (loss) per share - basic ($/share) | 0.06 | 0.07 | -14 % | 0.17 | 0.12 | 42 % | |
Adjusted earnings attributable to equity holders (in thousands of $) | 11,452 | 11,775 | -3 % | 35,498 | 32,056 | 11 % | |
Adjusted earning per share - basic ($/share) | 0.06 | 0.07 | -14 % | 0.20 | 0.18 | 11 % | |
Net cash generated from operating activities (in thousands of $) | 23,607 | 25,661 | -8 % | 81,332 | 79,901 | 2 % | |
Capitalized expenditures (in thousands of $) | 19,635 | 15,484 | 27 % | 50,609 | 48,366 | 5 % | |
Metals sold | |||||||
Gold (ounces) | 1,342 | 1,100 | 22 % | 5,352 | 3,400 | 57 % | |
Silver (in thousands of ounces) | 1,703 | 1,860 | -8 % | 5,096 | 5,564 | -8 % | |
Lead (in thousands of pounds) | 16,248 | 19,273 | -16 % | 48,753 | 55,666 | -12 % | |
Zinc (in thousands of pounds) | 7,320 | 7,119 | 3 % | 18,818 | 19,987 | -6 % | |
Average Selling Price, Net of Value Added Tax and Smelter Charges | |||||||
Gold ($/ounce) | 1,718 | 1,541 | 11 % | 1,754 | 1,479 | 19 % | |
Silver ($/ounce) | 20.14 | 17.17 | 17 % | 19.74 | 16.91 | 17 % | |
Lead ($/pound) | 0.87 | 0.85 | 2 % | 0.86 | 0.87 | -1 % | |
Zinc ($/pound) | 0.82 | 0.96 | -15 % | 0.81 | 1.09 | -26 % | |
Financial Position as at | December 31, 2023 | September 30, 2023 | December 31, 2023 | March 31, 2023 | |||
Cash and cash equivalents and short-term investments (in thousands of $) | 198,295 | 189,091 | 5 % | 198,295 | 203,323 | -2 % | |
Working capital (in thousands of $) | 159,555 | 154,330 | 3 % | 159,555 | 177,808 | -10 % | |
Revenue in Q3 Fiscal 2024 was
Income from mine operations in Q3 Fiscal 2024 was
Net income attributable to equity shareholders of the Company in Q3 Fiscal 2024 was
Compared to Q3 Fiscal 2023, the Company's consolidated financial results in the current quarter were mainly impacted by i) increases of
Cash flow provided by operating activities in Q3 Fiscal 2024 was
Working capital as at December 31, 2023 was
CONSOLIDATED OPERATIONAL RESULTS
Three months ended December 31, | Nine months ended December 31, | ||||||
2023 | 2022 | Changes | 2023 | 2022 | Changes | ||
Ore Production (tonne) | |||||||
Ore mined | 345,273 | 296,050 | 17 % | 921,958 | 887,135 | 4 % | |
Ore milled | |||||||
Gold ore | 12,726 | - | 100 % | 36,419 | - | 100 % | |
Silver ore | 299,774 | 303,442 | -1 % | 832,283 | 893,261 | -7 % | |
312,500 | 303,442 | 3 % | 868,702 | 893,261 | -3 % | ||
Metal Production | |||||||
Gold (ounces) | 1,342 | 1,100 | 22 % | 5,352 | 3,400 | 57 % | |
Silver (in thousands of ounces) | 1,684 | 1,853 | -9 % | 5,054 | 5,511 | -8 % | |
Silver equivalent (in thousands of ounces) | 1,795 | 1,949 | -8 % | 5,520 | 5,802 | -5 % | |
Lead (in thousands of pounds) | 16,763 | 20,059 | -16 % | 50,644 | 57,130 | -11 % | |
Zinc (in thousands of pounds) | 7,404 | 6,974 | 6 % | 18,826 | 19,886 | -5 % | |
Cash Costs | |||||||
Production costs per tonne of ore processed ($) | 74.26 | 77.73 | -4 % | 77.57 | 82.25 | -6 % | |
All-in sustaining costs per tonne of ore processed ($) | 136.86 | 136.90 | 0 % | 139.79 | 137.33 | 2 % | |
Cash costs per ounce of silver, net of by-product credits ($) | (0.96) | (1.15) | 17 % | (0.74) | (0.68) | -9 % | |
All-in sustaining costs per ounce of silver, net of by-product credits ($) | 11.33 | 9.28 | 22 % | 10.72 | 8.94 | 20 % | |
In Q3 Fiscal 2024, the Company mined 345,273 tonnes of ore, up
In Q3 Fiscal 2024, the Company produced approximately 1,342 ounces of gold, 1.7 million ounces of silver, or approximately 1.8 million ounces of silver equivalent, plus 16.8 million pounds of lead and 7.4 million pounds of zinc, representing increases of
In Q3 Fiscal 2024, the consolidated mining costs were
In Q3 Fiscal 2024, the consolidated cash costs per ounce of silver, net of by-product credits, were negative
EXPLORATION AND DEVELOPMENT
Capitalized Development and Expenditures | Expensed | |||||||||
Ramp Development | Exploration and Development Tunnels | Drilling | Equipment & Mill and TSF | Total | Mining Preparation Tunnels | Drilling | ||||
(Metres) | ($ Thousand) | (Metres) | ($ Thousand) | (Metres) | ($ Thousand) | ($ Thousand) | ($ Thousand) | (Metres) | (Metres) | |
Q3 Fiscal 2024 | ||||||||||
Ying Mining District | 3,986 | $ 2,651 | 23,834 | $ 9,612 | 39,085 | $ 1,338 | 3,679 | $ 17,280 | 10,010 | 24,693 |
GC Mine | 81 | 108 | 3,747 | 1,688 | 10,912 | 250 | 218 | 2,264 | 2,145 | 12,327 |
Corporate and other | - | - | - | - | - | 82 | 9 | 91 | - | - |
Consolidated | 4,067 | $ 2,759 | 27,581 | $ 11,300 | 49,997 | $ 1,670 | $ 3,906 | $ 19,635 | 12,155 | 37,020 |
Q3 Fiscal 2023 | ||||||||||
Ying Mining District | 1,776 | $ 1,294 | 15,527 | $ 6,549 | 27,066 | $ 895 | 3,250 | $ 11,988 | 7,933 | 25,270 |
GC Mine | - | - | 3,642 | 1,133 | 4,444 | 204 | 1,951 | 3,288 | 1,786 | 12,470 |
Corporate and other | - | - | - | - | 978 | 268 | 95 | 363 | - | - |
Consolidated | 1,776 | $ 1,294 | 19,169 | $ 7,682 | 32,488 | $ 1,367 | $ 5,296 | $ 15,639 | 9,719 | 37,740 |
Total capital expenditures in Q3 Fiscal 2024 were
In Q3 Fiscal 2024, on a consolidated basis, a total of 87,017 metres or
INDIVIDUAL MINE OPERATING PERFORMANCE
The table below summarizes the operating results at the Ying Mining District for the past five quarters and for the nine months ended December 31, 2023 and 2022.
Ying Mining District | Q3 F2024 | Q2 F2024 | Q1 F2024 | Q4 F2023 | Q3 F2023 | Nine months ended December 31, | ||
December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | 2023 | 2022 | ||
Ore Production (tonne) | ||||||||
Ore mined | 245,606 | 220,636 | 213,748 | 132,205 | 206,854 | 679,990 | 636,819 | |
Ore milled | ||||||||
Gold ore | 12,726 | 12,800 | 10,893 | - | - | 36,419 | - | |
Silver ore | 201,475 | 200,068 | 197,916 | 130,910 | 213,830 | 599,459 | 642,147 | |
214,201 | 212,868 | 208,809 | 130,910 | 213,830 | 635,878 | 642,147 | ||
Head grades | ||||||||
Silver (grams/tonne) | 235 | 235 | 254 | 255 | 262 | 241 | 262 | |
Lead (%) | 3.5 | 3.5 | 3.6 | 3.6 | 4.0 | 3.5 | 3.9 | |
Zinc (%) | 0.7 | 0.7 | 0.7 | 0.6 | 0.7 | 0.7 | 0.7 | |
Recovery rates | ||||||||
Silver (%) | 94.9 | 95.0 | 95.1 | 95.2 | 95.7 | 95.0 | 95.7 | |
Lead (%) | 94.8 | 95.0 | 95.5 | 95.3 | 95.4 | 95.1 | 95.0 | |
Zinc (%) | 71.4 | 71.1 | 69.6 | 68.3 | 66.4 | 70.7 | 62.3 | |
Cash Costs | ||||||||
Cash production cost per tonne of ore processed ($) | 84.01 | 102.42 | 88.66 | 95.23 | 93.04 | 84.33 | 92.35 | |
All-in sustaining cost per tonne of ore processed ($) | 143.80 | 170.69 | 141.21 | 127.89 | 156.07 | 140.20 | 141.66 | |
Cash cost per ounce of Silver, net of by-product credits ($) | (0.09) | 1.37 | 0.24 | 1.86 | 0.28 | (0.38) | 0.78 | |
All-in sustaining cost per ounce of silver, net of by-product credits ($) | 8.99 | 11.33 | 7.66 | 6.82 | 8.60 | 8.04 | 7.71 | |
Metal Production | ||||||||
Gold ( ounces) | 1,342 | 1,552 | 1,000 | 1,100 | 1,200 | 5,352 | 3,400 | |
Silver (in thousands of ounces) | 1,511 | 1,597 | 997 | 1,674 | 1,657 | 4,665 | 5,083 | |
Lead (in thousands of pounds) | 14,552 | 15,382 | 9,688 | 17,647 | 16,201 | 43,471 | 49,316 | |
Zinc (in thousands of pounds) | 2,153 | 2,113 | 1,164 | 2,082 | 1,976 | 6,510 | 6,060 | |
The table below summarizes the operating results at the GC Mine for the past five quarters and for the nine months ended December 31, 2023 and 2022.
GC Mine | Q3 F2024 | Q2 F2024 | Q1 F2024 | Q4 F2023 | Q3 F2023 | Nine months ended December 31, | ||
December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | 2023 | 2022 | ||
Ore Production (tonne) | ||||||||
Ore mined | 99,667 | 89,472 | 49,643 | 89,196 | 75,054 | 241,968 | 250,316 | |
Ore milled | 98,299 | 86,286 | 48,483 | 89,612 | 75,381 | 232,824 | 251,114 | |
Head grades | ||||||||
Silver (grams/tonne) | 68 | 80 | 88 | 75 | 72 | 72 | 73 | |
Lead (%) | 1.1 | 1.4 | 1.3 | 1.4 | 1.2 | 1.2 | 1.3 | |
Zinc (%) | 2.7 | 2.7 | 2.5 | 2.8 | 2.7 | 2.7 | 2.8 | |
Recovery rates | ||||||||
Silver (%) | 80.3 | 82.7 | 78.9 | 83.0 | 81.0 | 81.8 | 82.5 | |
Lead (%) | 90.9 | 90.7 | 90.9 | 90.3 | 88.5 | 90.7 | 89.6 | |
Zinc (%) | 90.1 | 90.4 | 89.3 | 90.1 | 89.6 | 90.2 | 90.1 | |
Cash Costs | ||||||||
Cash production cost per tonne of ore processed ($) | 50.38 | 67.34 | 52.35 | 59.84 | 57.92 | 58.50 | 56.51 | |
All-in sustaining cost per tonne of ore processed ($) | 76.84 | 84.79 | 88.26 | 78.31 | 81.68 | 86.93 | 83.02 | |
Cash cost per ounce of Silver, net of by-product credits ($) | (8.95) | (3.10) | (13.72) | (12.13) | (22.42) | (4.69) | (16.08) | |
All-in sustaining cost per ounce of silver, net of by-product credits ($) | 8.01 | 5.93 | 5.02 | (0.73) | (7.48) | 11.98 | (0.71) | |
Metal Production | ||||||||
Silver (in thousands of ounces) | 173 | 183 | 109 | 179 | 141 | 431 | 481 | |
Lead (in thousands of pounds) | 2,211 | 2,434 | 1,250 | 2,412 | 1,782 | 5,282 | 6,350 | |
Zinc (in thousands of pounds) | 5,251 | 4,708 | 2,413 | 4,892 | 4,010 | 12,308 | 13,927 | |
OPERATING OUTLOOK
The Company is currently refining the mine plan and expects to provide Fiscal 2025 guidance along with the release of Fiscal 2024 production results in April 2024.
In the fourth quarter of Fiscal 2024, the Company expects to process 215,000 to 240,000 tonnes of ore to produce approximately 1,200 to 1,300 ounces of gold, 1.1 to 1.3 million ounces of silver, 11.5 to 13.5 million pounds of lead, and 4.5 to 5.0 million pounds of zinc, representing production increases of
CONFERENCE CALL DETAILS
A conference call to discuss these results will be held tomorrow, Friday, February 9, at 9:00 am PDT (12:00 pm EDT). To participate in the conference call, please dial the numbers below.
International/Local Toll: 416-764-8650
Conference ID: 84281283
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.silvercorpmetals.com
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 given consent to the technical information contained in this news release.
About Silvercorp
Silvercorp is a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability and growth potential. The Company's strategy is to create shareholder value by 1) focusing on generating free cashflow from long life mines; 2) organic growth through extensive drilling for discovery; 3) ongoing merger and acquisition efforts to unlock value; and 4) long term commitment to responsible mining and sound Environmental, Social, and Governance ("ESG") practices. For more information, please visit our website at www.silvercorpmetals.com.
For further information
Silvercorp Metals Inc.
Lon Shaver
President
Phone: (604) 669-9397
Toll Free 1(888) 224-1881
Email: investor@silvercorp.ca
Website: www.silvercorpmetals.com
ALTERNATIVE PERFORMANCE (NON-IFRS) MEASURES
This news release should be read in conjunction with the Company's Management Discussion & Analysis ("MD&A"), the unaudited condensed interim consolidated financial statements and related notes contains therein for the three and nine months ended December 31, 2023, which have been posted on SEDAR+ under the Company's profile at www.sedarplus.ca and on EDGAR at www.sec.gov, and are also available on the Company's website at www.silvercorpmetals.com under the Investor section. This news release refers to various alternative performance (non-IFRS) measures, such as adjusted earnings and adjusted earnings per share, cash costs and all-in sustaining costs per ounce of silver, net of by-product credits, production costs and all-in sustaining production costs per tonne of ore processed, silver equivalent, 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 32, section 11 – Alternative Performance (Non-IFRS) Measures in the MD&A for the three and nine months ended December 31, 2023 filled on SEDAR at www.sedarplus.ca and EDGAR at www.sec.gov and which is incorporated by reference here in.
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 and US 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.
Actual results may vary from forward-looking statements. 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 public health crises; 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
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" and in the Company's Annual Report on Form 40-F, and in the Company's other filings with Canadian and
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. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, guidance cannot be guaranteed. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
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SOURCE Silvercorp Metals Inc
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