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Silvercorp Metals expects to meet annual output guidance for fiscal 2022 despite first quarter decline

Published: 12:40 14 Jul 2021 BST

Silvercorp Metals Inc -
Silvercorp said in expects to produce between 6.3 million and 6.6 million ounces of silver, and between 65.7 million and 68.9 million pounds of lead, along with 26.9 and 28.5 million pounds of zinc for the year to March 31, 2022

Silvercorp Metals Inc (TSE:SVM) (NYSEAMERICAN:SVM) (FRA:S9Y), the China-focused miner, has told investors it expects to meet its annual production guidance for fiscal 2022, despite a decline in output for its fiscal first quarter to end-June this year.

Silvercorp said it expects to churn out between 6.3 million and 6.6 million ounces of silver, and between 65.7 million and 68.9 million pounds of lead, along with 26.9 and 28.5 million pounds of zinc for the year to March 31, 2022.

READ: Silvercorp Metals hits high-grade veins in and above production areas with exploration drilling at SGX mine

Across its operations, the company mined 231,235 tonnes in the first quarter of fiscal year 2022, which was down 9% compared to fiscal 1Q 2021. That amounted to around 1.5 million ounces of silver, 1,000 ounces of gold, 15.9 million pounds of lead, and 7.2 million pounds of zinc, down 16%, 9%, 21%, and 4%, respectively compared to the year earlier period.

In terms of sales, Silvercorp sold around 1.6 million ounces of silver, 1,000 ounces of gold, 16.8 million pounds of lead, and 7.3 million pounds of zinc, representing decreases of 12%, 9%, and 20%, respectively compared to fiscal 1Q, 2021, in silver, gold and lead, but an increase of 4% in zinc sold.

The company put the decline in output mainly down to mining contracts renewal negotiations at its flagship Ying project.

The two-year mining contracts with eight contractors expired on March 31, 2021, and the parties reached a temporary two-month extension but during negotiations, some contract workers took breaks or left due to the uncertainty, it said.

The contracts were renewed for an additional two-year term in mid-May, this year.

At the Ying project, which comprises a complex of six mines, ore mined was down 18% compared to the fiscal first quarter of 2021, but ore mined at the firm's GC mine was up 10% on the year earlier period.

Silvercorp describes itself as a profitable Canadian mining company, which produces silver, lead and zinc metals in concentrates from mines in China.

Also in the statement, the company said it expects to release its first quarter results on August 5 this year after market close.

Contact the author at giles@proactiveinvestors.com

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