Silvercorp Metals Inc (TSX:SVM, AMEX:SVM) told investors it achieved revenue of $58.5 million in its fiscal third quarter as it sold approximately 1.9 million ounces of silver, 1,100 ounces of gold, 19.3 million pounds of lead, and 7.1 million pounds of zinc.
Reporting results for the three months ended December 31, 2022, the China-focused metals miner said it ended the period with a strong balance sheet with $210.3 million in cash, cash equivalents and short-term investments, up 5%, after generating cash flow from operating activities of $25.7 million over the quarter.
While revenue for the quarter was steady, net income attributable to its equity holders more than doubled to $11.9 million, up from $5.1 million in 3Q 2022, resulting in net income of $0.07 per share, up from $0.03 in the corresponding period.
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Over the quarter, Silvercorp said it mined 296,050 tonnes of ore, up 1% compared to 292,072 tonnes in 3Q 2022. Ore milled was 303,442 tonnes, effectively the same compared to 304,772 tonnes in the corresponding quarter a year earlier.
Production for the quarter represented increases of 1%, 0%, and 6%, respectively, for silver, gold and lead, and a decrease of 13% in zinc production over 3Q 2022.
Consolidated production costs of $77.73 per tonne were down 9% compared to $85.73 per tonne a year earlier, the company said. All-in-sustaining production costs per tonne of ore processed were marginally lower at $136.90, it added.
Kuanping update
The company noted that its Kuanping silver-lead-zinc-gold project received a mining license from the Department of Natural Resources in China’s Henan Province in December 2022. The Kuanping mining license covers 6.97 square kilometres and is good until March 13, 2029.
As of December 31, 2022, the company said a total of $4 million in expenditures have been incurred on the construction of the new 3,000 tonnes per day flotation mill and the new tailings storage facility. A total of 2,147 metres of drainage tunnels were completed, and the site preparation for the new mill was also substantially completed. Also, the first batch of $4.1 million of milling equipment was ordered. The environmental assessment study report was revised and is pending government approval, Silvercorp said.
The company said it also spent approximately $1.8 million to upgrade most roads to concrete and upgrade certain environmental protection facilities at the Ying Mining District as part of its continued commitment to build and operate green mines. Additionally, it spent about $1 million to construct an X-Ray Transmission (XRT) Ore Sorting System to optimize mine planning and improve processing head grades at the GC Mine. The XRT Ore Sorting System is expected to be completed in the fourth quarter of fiscal 2023, it said.
Fiscal 2024 outlook
Silvercorp said it expects to mine and process 1.1 million to 1.17 million tonnes of ore in Fiscal 2024, yielding approximately 4,400 to 5,500 ounces of gold, 6.8 to 7.2 million ounces of silver, 70.5 to 73.8 million pounds of lead, and 27.7 to 29.7 million pounds of zinc.
Fiscal 2024 production guidance represents production increases of approximately 3% to 8% in ores, 1% to 26% in gold, 3% to 8% in silver, 3% to 8% in lead, and 14% to 23% in zinc compared to the expected production result in Fiscal 2023, the company said.
Silvercorp is a Canadian mining firm producing silver, gold, lead, and zinc with a long history of profitability and growth potential.
It says its strategy is to create shareholder value by focusing on generating free cash flow from long-life mines; organic growth through extensive drilling for discovery; ongoing M&A efforts, and long-term commitment to responsible mining and ESG.
Contact the author at stephen.gunnion@proactiveinvestors.com