VANCOUVER, British Columbia, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX/NYSE American: SVM) reported its financial and operating results for the first quarter ended June 30, 2020 (“Q1 Fiscal 2021”). All amounts are expressed in US Dollars.

Q1 FISCAL YEAR 2021 HIGHLIGHTS

Mined 254,555 tonnes of ore, down 1% compared to the prior year quarter;
Sold approximately 1.9 million ounces of silver, 1,100 ounces of gold, 20.9 million pounds of lead, and 7.0 million pounds of zinc, representing an increase of 1%, 10%, and 17% in silver, gold and lead sold, and a decrease of 5% in zinc sold, compared to the prior year quarter;
Revenue of $46.7 million, up 2% or $1.1 million compared to $45.6 million in the prior year quarter;
Net income attributable to equity shareholders of $15.5 million, or $0.09 per share, compared to $12.6 million or $0.07 per share in the prior year quarter;
Cash cost per ounce of silver1, net of by-product credits, of negative $1.48, compared to negative $2.17 in the prior year quarter;
All-in sustaining cost per ounce of silver1, net of by-product credits, of $5.61, compared to $5.69 in the prior year quarter;
Cash flow from operations of $30.1 million, compared to $19.9 million in the prior year quarter;
Gain of $16.4 million on equity investments;
Receipt of $6.5 million (CAD$9.0 million) break fee from Guyana Goldfields Inc.;
Paid dividends of $2.2 million, or $0.0125 per share, to equity shareholders;
Invested $5.8 million in New Pacific Metals Corp. (“NUAG”) to maintain the Company’s ownership interest at 28.8%;
Strong balance sheet with $178.4 million in cash and cash equivalents and short-term investments, an increase of $35.9 million or 25% compared to March 31, 2020; and,
Investment in NUAG with market value of $178.2 million and other investments of $7.4 million.
1 Alternative performance (non-IFRS) measure. Please refer to section 10 of the corresponding MD&A for reconciliation.

FINANCIALS

Net income attributable to equity shareholders of the Company in Q1 Fiscal 2021 was $15.5 million, or $0.09 per share, compared to $12.6 million, or $0.07 per share in the three months ended June 30, 2019 (“Q1 Fiscal 2020”).

The Company’s financial results in Q1 Fiscal 2021 were mainly impacted by the following: i) an increase of 1%, 10% and 17% in the amount of silver, gold, and lead sold, respectively; offset by a 5% decrease in the amount of zinc sold; ii) an increase of 10% and 24% in the net realized selling prices for silver and gold, offset by a decrease of 19% and 14% in the net realized selling prices for lead and zinc; iii) gain of $16.4 million on equity investments, of which $5.5 million was reported in profit and $10.9 million was reported in other comprehensive income; offset by a $1.8 million increase in foreign exchange loss; and iv) a $5.9 million increase in income tax expenses.

Revenue in Q1 Fiscal 2021 was $46.7 million, up 2% or $1.1 million compared to $45.6 million in the prior year quarter. The increase was mainly due to i) an increase of $2.4 million in revenue arising from the increase in the amount of silver, gold and lead sold; ii) an increase of $2.7 million in revenue arising from the increase in net realized selling prices for silver and gold; offset by iii) a decrease of $3.6 million in revenue arising from the decrease in net realized selling price for lead and zinc; and iv) a decrease of $0.2 million in revenue due to less zinc sold. Silver, gold and base metal sales represented $26.2 million, $1.5 million, and $19.0 million, respectively, compared to silver, gold and base metals sales of $23.6 million, $1.1 million, and $20.9 million, respectively, in the prior year quarter. Revenue from the Ying Mining District in Q1 Fiscal 2021 was $39.7 million, up 5% compared to $37.8 million in the prior year quarter. Revenue from the GC Mine in Q1 Fiscal 2021 was $7.0 million, down 10% compared to $7.8 million in the prior year quarter.

Production costs expensed in Q1 Fiscal 2021 were $17.7 million, a slight decrease compared to $18.0 million in Q1 Fiscal 2020. The production costs expensed represent approximately 264,680 tonnes of ore processed and expensed at a cost of $67.05 per tonne, compared to approximately 261,440 tonnes at $68.85 per tonne in Q1 Fiscal 2020.

Mineral resource taxes in Q1 Fiscal 2021 were $1.34 million, up 7% compared to $1.25 million in Q1 Fiscal 2020, and the increase was mainly due to higher revenue.

Government fees and other taxes in Q1 Fiscal 2021 were $0.5 million, compared to $0.6 million in Q1 Fiscal 2020. Government fees and other taxes are comprised of environmental protection fees, surtaxes on VAT, land usage levies, stamp duties and other miscellaneous levies, duties and taxes imposed by the state and local Chinese governments.

Income from mine operations in Q1 Fiscal 2021 was $19.3 million, or 41% of revenue, compared to $17.7 million or 39% of revenue in Q1 Fiscal 2020. Income from mine operations at the Ying Mining District was $17.6 million or 44% of revenue, compared to $16.0 million or 42% of revenue in Q1 Fiscal 2020. Income from mine operations at the GC Mine was $1.8 million or 26% of revenue, compared to $1.8 million or 23% of revenue in Q1 Fiscal 2020.

General and administrative expenses in Q1 Fiscal 2021 were $4.7 million, an increase of $0.2 million compared to $4.5 million in Q1 Fiscal 2020. The increase was mainly due to an increase of $0.4 million in share-based compensation offset by a decrease of $0.2 million in salaries and benefits. General and administrative expenses include corporate administrative expenses of $2.7 million (Q1 Fiscal 2020 - $2.4 million) and mine administrative expenses of $2.1 million (Q1 Fiscal 2020 - $2.1 million).

Foreign exchange loss in Q1 Fiscal 2021 was $2.7 million, an increase of $1.8 million compared to $0.9 million in Q1 Fiscal 2020. The foreign exchange loss is mainly driven by the appreciation of Canadian dollar against US dollar.

Property evaluation and business development expenses in Q1 Fiscal 2021 were a recovery of $3.8 million, compared to an expense of $0.1 million in Q1 Fiscal 2020. On April 26, 2020, the Company entered into a definitive agreement with Guyana Goldfields Inc. (“Guyana Goldfields”), subsequently amended on May 18, 2020 (collectively, the “Arrangement Agreement”) to acquire all of the issued and outstanding shares of Guyana Goldfields. On June 10, 2020, Guyana Goldfield terminated the Arrangement Agreement and paid the Company a break fee of $6.5 million (CAD$9.0 million). Net of expenses of $2.5 million, a gain of $4.0 million on this transaction was recorded as a recovery of property evaluation and business development expenses.

Gain on equity investments recorded in profit in Q1 Fiscal 2021 was $5.5 million, compared to $nil in Q1 Fiscal 2020. A total gain of $16.4 million on equity investments was reported in the current quarter, of which $10.9 million was recorded in other comprehensive income as the Company made elections to account for equity investments on an instrument-by-instrument basis.

Income tax expenses in Q1 Fiscal 2021 was $5.4 million, an increase of $5.9 million, compared to an income tax recovery of $0.5 million in Q1 Fiscal 2020. In Q1 Fiscal 2021, the Company recorded current income tax expenses of $4.6 million (Q1 Fiscal 2020 – $1.8 million), and deferred income tax expenses of $0.8 million (Q1 Fiscal 2020 – deferred income tax recovery of $2.2 million). The current income tax expenses in Q1 Fiscal 2020 included withholding tax expenses of $1.1 million, which was paid at a rate of 10% on dividends distributed out of China. The deferred income tax recovery in Q1 Fiscal 2020 was mainly related to the tax benefit recognized arising from the disposal of the XHP Project.

Cash flow provided by operating activities in Q1 Fiscal 2021 was $30.1 million, up $10.2 million or 51%, compared to $19.9 million in Q1 Fiscal 2020.

The Company ended the quarter with $178.4 million in cash, cash equivalents and short-term investments, an increase of $35.9 million or 25%, compared to $142.5 million as at March 31, 2020.

Working capital as at June 30, 2020 was $153.7 million, an increase of $23.4 million or 18%, compared to $130.4 million as at March 31, 2020.

OPERATIONS AND DEVELOPMENT

In Q1 Fiscal 2021, on a consolidated basis, the Company mined 254,555 tonnes of ore, a slight decrease of 1% or 2,837 tonnes compared to 257,392 tonnes in Q1 Fiscal 2020. Ore milled was 262,326 tonnes, a slight increase of 1% or 2,784 tonnes, compared to 259,542 tonnes in Q1 Fiscal 2020.

The Company sold approximately 1.9 million ounces of silver, 1,100 ounces of gold, 20.9 million pounds of lead, and 7.0 million pounds of zinc, compared to 1.9 million ounces of silver, 1,000 ounces of gold, 17.8 million pounds of lead, and 7.3 million pounds of zinc in Q1 Fiscal 2020.

In Q1 Fiscal 2021, the consolidated total mining and cash mining costs were $73.91 and $54.97 per tonne, down 5% and 1% compared to $77.40 and $55.45 per tonne, respectively, in Q1 Fiscal 2020. The decrease in cash mining costs was mainly due to a decrease of $3.70 per tonne in the cash mining costs at the GC mine, offset by an increase of $1.07 per tonne in the cash mining costs at the Ying Mining District.

The consolidated total milling and cash milling costs in Q1 Fiscal 2021 were $11.04 and $9.58 per tonne, down 12% and 10% compared to $12.49 and $10.63 per tonne, respectively, in Q1 Fiscal 2020. The decrease in per tonne cash milling costs was mainly due to a decrease of $0.2 million in labour costs.

Correspondingly, the consolidated cash production cost per tonne of ore processed in Q1 Fiscal 2021 was $67.05, down 3% compared to $68.85 in Q1 Fiscal 2020. The consolidated all-in sustaining production costs per tonne of ore processed was $112.59, down 6% compared to $120.16 in Q1 Fiscal 2020. The decrease was mainly due to the lower per tonne production costs as discussed above and a $1.6 million decrease in sustaining capital expenditures.

In Q1 Fiscal 2021, the consolidated cash cost per ounce of silver, net of by-product credits, was negative $1.48, compared to negative $2.17, in Q1 Fiscal 2020. The increase in cash cost per ounce of silver, net of by-product credits, was mainly due to a decrease of $1.5 million in by-product sales.

In Q1 Fiscal 2021, the consolidated all-in sustaining cost per ounce of silver, net of by-product credits, was $5.61 compared to $5.69 in Q1 Fiscal 2020. The decrease was mainly due to i) a $1.6 million decrease in sustaining capital expenditures, offset by ii) the increase in cash cost per ounce of silver, net of by-product credits as discussed above.

1. Ying Mining District, Henan Province, China
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