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Silvercorp Metals posts first quarter financial and operating results showing an increase in revenue as mined ore tonnes and rolled rose significantly

Published: 06:45 12 Aug 2022 EDT

Silvercorp mine in China
Silvercorp posted first-quarter revenue of $63.6 million, up 8% compared to $58.8 million in the prior year quarter

Silvercorp Metals Inc (TSX:SVM, AMEX:SVM) has reported its first quarter financial and operating results for the three months ended June 30, 2022, showing an increase in revenue as mined ore tonnes and rolled rose significantly.

The company posted first-quarter revenue of $63.6 million, up 8% compared to $58.8 million in the prior-year quarter. It mined 300,104 tonnes of ore and milled 298,176 tonnes of ore, up 30% and 23% compared to the prior-year quarter;

Silvercorp said it sold approximately 1.9 million ounces of silver, 1,100 ounces of gold, 19.1 million pounds of lead, and 6.9 million pounds of zinc in the first quarter, representing increases of 17%, 10%, and 14% in silver, gold and lead sold, and a decrease of 5% in zinc sold, compared to the prior-year quarter.

READ: Silvercorp Metals posts double-digit growth in silver, lead and gold production and sales in 1Q

The company's net income attributable to equity shareholders was $10.2 million, or $0.06 per share, compared to $12.2 million, or $0.07 per share in the prior-year quarter, with adjusted earnings attributable to equity shareholders of $13.5 million, or $0.08 per share, compared to $15.8 million, or $0.09 per share in the prior-year quarter. The adjustments were made to remove impacts from impairment charges, share-based compensation, foreign exchange, mark-to-market equity investments, and the share of associates' operating results.

Cash flow from operations was $40.2 million, up 10% or $3.7 million compared to $36.5 million in the prior year quarter, with an all-in sustaining cost  (AISC) per ounce of silver, net of by-product credits, of $9.25 compared to $7.46 in the prior-year quarter.

The company said it spent and capitalized $3.1 million on exploration drilling, $9.7 million on underground development and $1.2 million on the construction of a new mill and tailings storage facility (TSF) during the first quarter.

Silvercorp highlighted its strong balance sheet with $215.8 million in cash and cash equivalents and short-term investments, up $2.9 million or 1% compared to $212.9 million as at March 31, 2022. The company holds further equity investment portfolio in associates and other companies with a total market value of $147.4 million as of June 30, 2022.

In Q1 Fiscal 2023, on a consolidated basis, a total of 122,930 metres or $4.9 million worth of diamond drilling were completed (Q1 Fiscal 2022 - 107,913 metres or $4.6 million), of which approximately 66,999 metres or $1.8 million worth of underground drilling were expensed as part of mining costs (Q1 Fiscal 2022 - 50,666 metres or $1.3 million) and approximately 55,931 metres or $3.1 million worth of drilling were capitalized (Q1 Fiscal 2022 - 57,247 metres or $3.3 million). In addition, approximately 11,682 metres or $4.1 million worth of preparation tunnelling were completed and expensed as part of mining costs (Q1 Fiscal 2022 - 6,955 metres or $2.8 million), and approximately 24,958 metres or $9.7 million worth of tunnels, raises, ramps and declines were completed and capitalized (Q1 Fiscal 2022 - 17,263 metres or $6.8 million).

An application for a mining permit for the Kuanping Project has been submitted and is pending review and approval by the relevant provincial government authorities, the company noted.

The preliminary design and engineering survey, the water and soil conservation studies for the New Mill and the TSF, and the feasibility study for the TSF have been completed. The company has also received the construction permit for the New Mill and is in the process of negotiating purchases of major equipment for it.

Silvercorp said it expects that the final approval of the environmental and safety assessment studies, and the detailed engineering design of the New Mill and the TSF will be granted in the second quarter of fiscal year 2023.

A conference call to discuss the results will be held on Friday, August 12, 2022, at 9.00am PDT (12.00pm EDT). Dial-in numbers: Canada/USA Toll-free 888-664-6383; International Toll 416-764-8650; Conference ID 38775517

A replay of the conference call and transcript will be available on the company's website at www.silvercorp.ca.

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 focusing on generating free cashflow from long-life mines; organic growth through extensive drilling for discovery; ongoing merger and acquisition efforts to unlock value; and long-term commitment to responsible mining and ESG.

Contact the author at jon.hopkins@proactiveinvestors.com

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