Silvercorp Metals Inc (TSX:SVM, AMEX:SVM) has told investors it is on track to meet its production guidance for the full fiscal year to end-March 2022 as the company unveiled solid second-quarter output numbers.
The China-focused metals miner said it was on pace to generate between 6.3 and 6.6 million ounces of silver, 65.7 to 68.9 million pounds of lead, and 26.9 to 28.5 million pounds of zinc for fiscal 2022.
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 its second quarter to September 30, 2021, Silvercorp said production came in at 1.7 million ounces of silver, 800 ounces of gold, 17.6 million pounds of lead, and 7.5 million pounds of zinc. That represented an increase of 15%, 11%, and 4%, respectively, in silver, lead and zinc, but a decrease of 20% in gold compared to its first fiscal quarter to June 30 this year, said the company.
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Elsewhere, at its GC project in Guangdong province, the company said 179,000 ounces of silver, 2.9 million pounds of lead, and 5.9 million pounds of zinc were generated, compared to 190,000 ounces of silver, 2.6 million pounds of lead and 5.6 million pounds of zinc in the first fiscal quarter of 2022.
Across the group, ore mined was 292,468 tonnes, up 9% over compared to the same quarter of fiscal 2021.
On a consolidated basis, Silvercorp 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, representing decreases of 1%, 64%, and 7%, respectively, in silver, gold and lead sold, and an increase of 3% in lead sold compared to the same quarter of fiscal 2021.
The firm noted that, at Ying, ore milled was 182,173 tonnes, up 26,766 tonnes or 17% over fiscal 1Q, 2022, but 24,760 tonnes lower than mined as a result of transportation interruptions caused by lengthy heavy rains in the latest quarter.
"The company expects to maintain a similar mining production rate and increase the milling tonnage at the Ying Mining District in the next quarter," it said in the statement.
Silvercorp added that it expects to release its second-quarter fiscal unaudited financial results on November 4 after the market close.
Canaccord repeats a 'Buy'
Following the update, broker Canaccord Genuity (TSX:CF, LSE:CF) repeated a 'Buy' on the stock and a C$9.50 price target.
"We continue to view SVM as a compelling option for those investors seeking significant leverage to the silver price," analysts said.
They added that the miner's fiscal second quarter production results had been "modestly weaker than we had anticipated, due to lower head grades at both assets".
"Silver grades at the Ying Mining District were 283g/t, compared to our estimate of 303g/t. Mill throughput was generally in line with our estimates following labour disruptions in the previous quarter which impacted mill utilization. The company remains on track to meet full-year production guidance," said the analysts.
Looking ahead, Canaccord added: "We look forward to additional news on drill results at the Ying Mining District which should culminate in an updated resource and reserve statement sometime in early 2022."
Shares in Toronto on Friday stood at at C$5.10 each.
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