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Silvercorp Metals reports increased revenue and cashflow in its fiscal second quarter

Published: 08:22 05 Nov 2021 EDT

Silvercorp Metals Inc -
Cash flow from operations for fiscal 2Q, 2022 came in at US$30.9 million, versus US$29.6 million in fiscal 2Q, 2021

Silvercorp Metals Inc (TSX:SVM, AMEX:SVM), the China-focused metals miner, reported increased cash flow from operations and revenue in its fiscal second quarter to end-September, bolstered by higher realized metals selling prices. 

In the three months to September 30, the company reported revenue of US$58.4 million, up from US$56.3 million in the second quarter a year earlier. 

Cash flow from operations for fiscal 2Q, 2022 came in at US$30.9 million, versus US$29.6 million in fiscal 2Q, 2021. 

Silvercorp put the increased revenue mainly down to increased gold, lead and zinc net realized selling prices, which were offset, though, by a decrease in the quantities of silver, gold, and lead sold. 

READ: Silvercorp Metals on track to meet annual output guidance for fiscal 2022 as it posts second quarter figures

In the quarter, the company sold around 1.7 million ounces of silver, 800 ounces of gold, 17.3 million pounds of lead, and 7.6 million pounds of zinc, which represented 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.

Across the group's mines, the all-in-sustaining production cost per tonne of ore processed was US$135.76, up 9%, compared to US$124.24 per tonne, in 2Q, fiscal 2021, but within its current annual cost guidance.

In terms of production, the company mined 292,468 tonnes of ore and milled 271,816 tonnes, up 9% and 3% respectively compared to the same period a year earlier.

The net income for the three months was US$9.4 million, down 39% versus the US$15.5 million seen in fiscal 2Q, 2021, mainly due to an unrealized loss of US$4.1 million on investments in the current quarter compared to a gain of US$2.8 million in the prior-year quarter, said Silvercorp.

The miner finished the quarter with a strong balance sheet, with US$221.1 million in cash and equivalents and short-term investments, up 3% compared to US$214.4 million as at June 30, 2021 and up 11% compared to US$199.1 million as at March 31, this year.

The group's flagship project is the Ying project (also known as the SGX project), which comprises six separate mines in Henan Province in central China, which feed two mills

In October this year, production was temporarily suspended for ten days at the SGX mine as a precautionary measure due to heavy rainfall in the Yellow River region.

Despite this interruption, Silvercorp said it expected to maintain a similar mining production rate as achieved in this latest quarter in its fiscal third quarter, as well as increase the milling tonnage at the Ying mining district.

Contact the author at giles@proactiveinvestors.com

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