Silvercorp net income $43.7 million, $0.26 per share, for Fiscal 2017

Trading Symbol: 

TSX: SVM


NYSE MKT: SVM

 

VANCOUVER, May 25, 2017 /CNW/ - Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX: SVM) (NYSE: SVM) reported its financial and operating results for the fourth quarter and twelve months ended March 31, 2017.  All amounts are expressed in US Dollars.

FISCAL YEAR 2017 HIGHLIGHTS

  • Net income attributable to equity shareholders of $43.7 million, or $0.26 per share1, up 589% compared to net income attributable to equity shareholders of $6.3 million, or $0.04 per share in the prior year. Adjusted net income2 attributable to equity shareholders of $38.6 million or $0.23 per share, up 509% from the prior year after adjustment to one-time net impairment reversal of $5.1 million;
  • Silver, lead, and zinc metals sold up 29%, 34%, and 5%, respectively from the prior year, to approximately 6.5 million ounces silver, 70.5 million pounds lead, and 18.3 million pounds zinc;
  • Silver production of approximately 6.4 million ounces, surpassing the Fiscal 2017 annual production guidance by 25%;
  • Sales of $163.5 million, up 51% compared to $107.9 million in the prior year;
  • A 12%, 16%, and 15% increase in the head grades of silver, lead, and zinc compared to the prior year; 
  • Gross margin of 54% compared with 33% in the prior year;
  • Cash flow from operations of $80.4 million, an increase of $48.5 million compared to $31.9 million in the prior year;
  • Cash production costs per tonne ore2 decreased by 11% to $59.84 from $67.39 in the prior year;
  • Cash costs per ounce of silver2, net of by-product credits, of negative $3.03, compared to $1.44 in the prior year;
  • All-in sustaining costs per ounce of silver2, net of by-product credits, of $3.82, compared to $10.20 in the prior year; and
  • Ended the fiscal year with $96.5 million in cash and cash equivalents and short-term investments, an increase of $34.5 million or 56% compared to $62.0 million as at March 31, 2016.

HIGHLIGHTS FOR THE FOURTH QUARTER FISCAL 2017 ("Q4 FISCAL 2017")

  • Net income attributable to equity shareholders was $13.5 million, or $0.08 per share in Q4 Fiscal 2017, compared to the loss of $1.5 million, or $0.01 per share in Q4 Fiscal 2016. Adjusted net income attributable to equity shareholders of $8.2 million, or $0.05 per share after adjustment to one-time impairment reversal of $5.3 million;
  • Silver and lead metals sold up 34% and 53%, respectively from the prior year quarter, to approximately 1.3 million ounces silver and 14.3 million pounds lead;
  • Sales of $34.1 million, up 75% compared to $19.4 million in Q4 Fiscal 2016;
  • Gross margin of 60% compared with 32% in the prior year;
  • Cash costs per ounce of silver, net of by-product credits, of negative $3.65, compared to $2.22 in the prior year;
  • All-in sustaining costs per ounce of silver, net of by-product credits, of $3.26, compared to $9.91 in the prior year.

 

_____________________________________

1

Earnings per share refers to basic earnings per share

2

Non IFRS measure, please see reconciliation on section 11 of MD&A for the corresponding period

 

FINANCIALS

1.   Fiscal 2017 vs. Fiscal 2016

Net income attributable to the shareholders of the Company in Fiscal 2017 was $43.7 million, or $0.26 per share, up 589% compared to $6.3 million, or $0.04 per share in Fiscal 2016. The adjusted net income attributable to the shareholders of the Company was $38.6 million, or $0.23 per share, up 509% compared to $6.3 million, or $0.04 per share in the prior year.

In the current fiscal year, the Company's financial results were mainly impacted by the following: i) improved head grades yielded higher silver, lead, and zinc metals sold, up 29%, 34%, and 5% respectively; ii) a 9% decrease in per tonne ore production costs; and iii) the increase of metals prices, as the realized selling price for silver, lead, and zinc increased by 15%, 21%, and 33% compared to the prior year, respectively.  

Sales in Fiscal 2017 were $163.5 million, up 51% compared to $107.9 million in Fiscal 2016.  Silver and gold sales represented $89.6 million and $3.3 million, respectively, while base metals represented $70.6 million of total sales compared to silver, gold and base metals of $60.6 million, $1.9 million, and $45.4 million, respectively, in Fiscal 2016.

Cost of sales in Fiscal 2017 was $75.3 million compared to $71.9 million in Fiscal 2016.  The cost of sales included $57.6 million (Fiscal 2016 - $54.5 million) cash costs, $17.7 million (Fiscal 2016 - $17.3 million) depreciation, amortization and depletion charges, and a $nil write down of inventories (Fiscal 2016 - $0.2 million). 

Gross profit in Fiscal 2017 was 54% compared to 33% in Fiscal 2016. The improvement of gross profit margin was mainly due to: i) a 12%, 16%, and 15% increase in the head grades of silver, lead, and zinc; ii) a 9% decrease in per tonne ore production costs; and iii) the increase of metal prices. Ying Mining District's gross margin was 57% compared to a 38% gross profit margin in the prior year, while GC Mine's profit margin was 31% compared to a 10% gross profit margin in the prior year.

Cash flows provided by operating activities in Fiscal 2017 were $80.4 million, an increase of $48.5 million or 152%, compared to $31.9 million in the prior year.  Before changes in non-cash operating working capital, cash flows provided by operating activities in Fiscal 2017 were $76.0 million, an increase of $42.8 million or 129%, compared to $33.1 million in the prior year mainly due to the improvement of operating earnings.

The Company ended the fiscal year with $96.5 million in cash and short term investments, an increase of $34.5 million or 56% compared to $62.0 million as at March 31, 2016.

Working capital as at March 31, 2017 was $70.7 million, an increase of $35.5 million or 101%, compared to $35.2 million working capital as at March 31, 2016.

2.   Q4 Fiscal 2017 vs. Q4 Fiscal 2016

Net income attributable to equity shareholders of the Company in Q4 Fiscal 2017 was $13.5 million, or $0.08 per share compared to a loss of $1.5 million, or $0.01 per share in Q4 Fiscal 2016 while the adjusted net income attributable to the equity shareholders of the Company in Q4 Fiscal 2017 was $8.2 million, or $0.05 per share. 

The Company's financial results in Q4 Fiscal 2017 were mainly impacted by the following: i) more lead concentrate sold at the Ying Mining District, resulted in higher quantities of silver and lead metals being sold, up 34% and 53%, respectively; ii) a 19% decrease in per tonne ore production costs; iii) due to the annual Chinese New Year holiday the mine is only in operation for two months in Q4, resulting in reduced tonnage of ore mined compared to previous quarters of Fiscal 2017; and iv) the increase of metals prices, as the realized selling price for silver, lead, and zinc increased by 22%, 49%, and 107% compared to the prior year quarter, respectively.  

Sales in Q4 Fiscal 2017 were $34.1 million, up 75% compared to $19.4 million in the same quarter last year. Silver and gold sales represented $18.3 million and $0.7 million, respectively, while base metals represented $15.1 million of total sales compared to silver, gold and base metals of $11.1 million, $0.3 million, and $8.0 million, respectively, in the prior year quarter.

Cost of sales in Q4 Fiscal 2017 was $13.8 million compared to $13.2 million in Q4 Fiscal 2016.  The cost of sales included $12.0 million (Q4 Fiscal 2016 - $10.2 million) cash costs, $1.8 million (Q4 Fiscal 2016 - $2.8 million) depreciation, amortization and depletion charges, and $nil write down of inventories (Q4 Fiscal 2016 - $0.2 million).  

Gross profit in Q4 Fiscal 2017 improved to 60%, compared to 32% in Q4 Fiscal 2016.

Cash flows provided by operating activities in Q4 Fiscal 2017 were $4.9 million in Q4 Fiscal 2017 compared to $4.3 million in Q4 Fiscal 2016. Before changes in non-cash operating working capital, cash flows provided by operating activities in the current quarter were $9.1 million, an increase of $7.0 million, compared to $2.1 million in the prior year quarter.

OPERATIONS AND DEVELOPMENT

In Fiscal 2017, the Company sold 6.5 million ounces of silver, 3,300 ounces of gold, 70.5 million pounds of lead, and 18.3 million pounds of zinc, compared to 5.0 million ounces of silver, 2,400 ounces of gold, 52.5 million pounds of lead, and 17.5 million pounds of zinc, respectively, in Fiscal 2016.  The increase of metals sold was mainly due to: i) a 6% increase in ore milled, and ii) a 12%, 16% and 15% increase in the head grades of silver, lead and zinc head grades, resulting largely from the ongoing dilution control measures and operation management improvements.

1. Ying Mining District, Henan Province, China









Operational results - Ying Mining District







Q4 2017

Q3 2017

Q2 2017

Q1 2017

Q4 2016


Fiscal year ended March 31,


March 31, 2017

 December 31, 2016 

 September 30, 2016 

 June 30, 2016 

 March 31, 2016 


2017

2016

Ore Mined (tonne)  

112,755

171,303

179,194

173,508

99,415


636,760

589,766

Ore Milled (tonne)  

108,051

182,259

180,154

167,747

99,203


638,211

587,450

Head Grades  










Silver (gram/tonne)

298

303

302

308

310


303

268


Lead (%)

4.8

4.8

4.9

4.4

4.0


4.7

3.9


Zinc (%)

0.8

0.8

1.1

1.1

0.9


1.0

0.8

Recoveries 










Silver (%)

96.6

95.1

95.5

95.7

95.0


95.5

95.0


Lead (%)

95.6

96.7

96.3

96.4

96.3


96.5

95.6


Zinc (%)

46.2

47.5

42.9

48.4

57.6


46.0

54.1

Metal Sales  










Silver (in thousands of ounce)

1,255

1,555

1,630

1,490

857


5,930

4,395


Gold (in thousands of ounce)

0.7

0.7

1.0

0.9

0.3


3.3

2.3


Lead (in thousands of pound)

13,520

17,269

17,768

14,861

7,379


63,418

43,469


Zinc (in thousands of pound)

1,033

1,210

1,785

1,820

999


5,848

5,155

Cash mining costs ($ per tonne)  

49.99

55.21

49.13

52.33

54.63


51.79

56.90

Total mining costs ($ per tonne)  

53.50

80.53

76.30

78.64

83.24


74.04

79.93

Cash milling costs ($ per tonne)  

10.43

9.09

8.85

10.07

13.70


9.50

12.34

Total milling costs ($ per tonne)  

13.60

11.03

10.86

12.25

17.38


11.73

14.91

Cash production costs ($ per tonne)

64.34

68.22

61.79

66.27

71.90


65.17

73.25










Cash costs per ounce of silver ($) 

(3.73)

(4.60)

(2.68)

0.12

2.83


(2.70)

1.38

All-in sustaining costs per ounce of silver ($) 

0.74

1.34

2.33

5.80

8.92


2.61

8.60

* Figures may not add due to rounding








 

In Fiscal 2017, total ore mined at the Ying Mining District was 636,760 tonnes, an 8% increase compared to 589,766 tonnes mined in the prior year.  Correspondently, ore milled increased by 9% to 638,211 tonnes from 587,450 tonnes in the prior year. Silver, lead and zinc head grades improved by 13%, 20% and 19%, respectively, to 303 grams per tonne ("g/t") for silver, 4.7% for lead and 1.0% for zinc from 268 g/t for silver, 3.9% for lead and 0.8% for zinc in the prior year, resulting largely from the ongoing dilution control and operation management improvements.   

Silver, gold, lead, and zinc metals sold in Fiscal 2017 at the Ying Mining District was up by 35%, 43%, 46% and 13%, respectively, to approximately 5.9 million ounces silver, 3,300 ounces gold, 63.4 million pounds lead, and 5.8 million pounds zinc from 4.4 million ounces silver, 2,300 ounces gold, 43.5 million pounds lead, and 5.2 million pounds of zinc. 

Total and cash mining costs per tonne at the Ying Mining District in Fiscal 2017 were $74.04 and $51.79 per tonne, respectively, compared to $79.93 and $56.90 per tonne in the prior year. The decrease in cash mining costs was mainly due to: i) a 4% decrease in per tonne labour costs, and ii) a 28% decrease in per tonne mining preparation costs. 

Total and cash milling costs per tonne at the Ying Mining District in Fiscal 2017 were $11.73 and $9.50, a decrease of 21% and 23%, respectively, compared to $14.91 and $12.34 in Fiscal 2016. The decrease in cash milling costs was mainly due to i) an 8% decrease in per tonne labor costs, ii) a 20% reduction in raw material costs, iii) a 10% decrease in per tonne utility costs, and iv) the exclusion of mineral resources tax from milling costs. Prior to June 30, 2016, mineral resource tax was levied at RMB¥13.0 per tonne of ore milled and included as part of milling costs. Effective July 1, 2016, the mineral resource tax has been changed to a levy based on a certain percentage of sales, and therefore such tax is excluded from milling costs but expensed and included directly as part of cost of sales.

Correspondingly, cash production costs per tonne of ore processed in Fiscal 2017 at the Ying Mining District was $65.17, an 11% decrease compared to $73.25 in the prior year due to the decrease in both per tonne cash mining and milling costs.

Cash costs per ounce of silver, net of by-product credits, in Fiscal 2017 at the Ying Mining District, was negative $2.70 compared to $1.38 in the prior year. The decrease was mainly due to i) lower per tonne cash production costs as discussed above, and ii) a 73% increase in by-product credits mainly arising from 46% and 13% increase in lead and zinc metals sold and 19% and 37% increase in net realized lead and zinc selling prices. Sales from lead and zinc accounted for 39% of the total sales at the Ying Mining District in Fiscal 2017, and amounted to $55.8 million, an increase of $23.5 million, compared to $32.3 million in the prior year.

All in sustaining costs per ounce of silver, net of by-product credits, in Fiscal 2017 at the Ying Mining District was $2.61 compared to $8.60 in the prior year. The decrease was mainly due to lower cash costs per ounce of silver as discussed above.

In Fiscal 2017, approximately 93,755 meters ("m") of underground diamond drilling (Fiscal 2016 – 63,398 m) and 17,787 m of preparation tunnelling (Fiscal 2016 – 19,113 m) were completed and expensed as mining preparation costs at the Ying Mining District. In addition, approximately 60,241 m of horizontal tunnel, raises and declines (58,268 m) were completed and capitalized.  Total exploration and development expenditures capitalized at the Ying Mining District in Fiscal 2017 were $18.1 million compared to $18.9 million in Fiscal 2016.

In Q4 Fiscal 2017, the Company mined 112,755 tonnes of ore at the Ying Mining District, a 13% increase compared to 99,415 tonnes in Q4 Fiscal 2016. Correspondently, ore milled increased by 9% to 108,051 tonnes from 99,203 tonnes in the prior year quarter. Head grades were 298 gram per tonne ("g/t") for silver, 4.8% for lead, and 0.8% for zinc in Q4 Fiscal 2017, compared to 310 g/t for silver, 4.0% for lead, and 0.9% for zinc in Q4 Fiscal 2016. 

Silver, lead, and zinc metals sold in Q4 Fiscal 2017 at the Ying Mining District was up by 46%, 83%, and 3%, respectively, to approximately 1.3 million ounces silver, 13.5 million pounds lead, and 1.0 million pounds zinc from 0.9 million ounces silver, 7.4 million pounds lead, and 1.0 million pounds of zinc. 

In Q4 Fiscal 2017, the total and cash mining costs per tonne, at the Ying Mining District, were $53.50 and $49.99, compared to $83.24 and $54.63 in Q4 Fiscal 2016. The decrease in per tonne cash mining costs was mainly due to higher output resulting in lower per tonne labor costs and mine administration costs.

The total milling and cash milling cost per tonne in Q4 Fiscal 2017 at the Ying Mining District was $13.60 and $10.43, a decrease of 22% and 24%, respectively, compared to $17.38 and $13.70 in the prior year period. The decrease in cash milling costs was mainly due to i) a 16% decrease in per tonne labor costs, ii) a 25% reduction in raw material costs, and iii) the exclusion of mineral resources tax from milling costs as discussed above.

Correspondingly, cash production costs per tonne of ore processed in Q4 Fiscal 2017 at the Ying Mining District was $64.34, an 11% decrease compared to $71.90 in the prior year quarter due to the decrease in both per tonne cash mining and milling costs.

Cash costs per ounce of silver, net of by-product credits, at the Ying Mining District, was negative $3.73 in Q4 Fiscal 2017 compared to $2.83 in Q4 Fiscal 2016. The decrease was mainly due to: i) lower per tonne cash production costs as discussed above, and ii) a 90% increase in by-product credits arising from 83% and 3% increase in lead and zinc metals sold and 36% and 115% increase in net realized lead and zinc selling prices. Sales from lead and zinc accounted for 43% of the total sales at the Ying Mining District in the current quarter, and amounted to $13.8 million, an increase of $8.2 million, compared to $5.6 million in the prior year quarter.

All in sustaining costs per ounce of silver, net of by-product credits, at the Ying Mining District in Q4 Fiscal 2017 was $0.74 per ounce of silver compared to $8.92 in Q4 Fiscal 2016. The decrease was mainly due to the lower per tonne cash production costs and the increase in by-product credits as discussed above.  

2.  GC Mine, Guangdong Province, China









Operational results - GC Mine

Q4 2017

Q3 2017

Q2 2017

Q1 2017

Q4 2016


Fiscal year ended March 31,


March 31, 2017

December 31, 2016

September 30, 2016

June 30, 2016

March 31, 2016


2017

2016

Ore Mined (tonne)  

40,224

81,481

74,692

64,349

50,014


260,746

257,575

Ore Milled (tonne)  

39,929

81,080

76,100

63,587

50,124


260,696

256,862

Head Grades  










Silver (gram/tonne)

91

89

96

99

92


94

94


Lead (%)

1.3

1.4

1.6

1.5

2.0


1.4

1.8


Zinc (%)

2.6

2.8

2.8

2.9

2.7


2.8

2.5

Recovery Rates 










Silver (%)

72.8

75.4

76.2

76.8

79.1


75.7

78.9


Lead (%)

82.4

85.5

86.6

86.9

84.9


85.7

88.2


Zinc (%)

74.8

86.5

86.4

85.8

82.6


84.7

82.9

Metal Sales  










Silver (in thousands of ounce)

53

179

183

149

118


564

637


Lead (in thousands of pound)

818

2,214

2,163

1,860

1,970


7,055

9,042


Zinc (in thousands of pound)

455

4,478

4,106

3,407

2,576


12,446

12,302

Cash mining costs ($ per tonne)  

37.91

31.34

28.61

33.50

26.24


32.10

38.23

Total mining costs ($ per tonne)  

45.37

38.90

36.78

41.91

34.76


40.03

46.49

Cash milling costs ($ per tonne)  

20.06

13.09

12.94

15.60

16.99


14.73

15.79

Total milling costs ($ per tonne)  

24.99

15.50

15.57

18.81

20.67


17.78

18.30

Cash production costs ($ per tonne) 

57.97

44.43

41.55

49.10

43.23


46.83

54.02










Cash costs per ounce of silver ($) 

(1.72)

(13.11)

(6.39)

(0.28)

(2.24)


(6.47)

1.85

All-in sustaining costs per ounce of silver ($) 

14.55

(6.12)

(1.49)

4.76

1.19


0.20

8.81

* Figures may not add due to rounding








 

In Fiscal 2017, total ore mined at the GC Mine was 260,746 tonnes, a 1% increase compared to 257,575 tonnes of mined in Fiscal 2016.  Correspondingly, ore milled increased by 1% to 260,696 tonnes from 256,862 tonnes in the prior year. Head grades were 94 g/t for silver, 1.4% for lead, and 2.8% for zinc compared to 94 g/t for silver, 1.8% for lead, and 2.5% for zinc in the prior year. 

In Fiscal 2017, GC Mine sold 564 thousand ounces of silver, 7.1 million pounds of lead, 12.4 million pounds of zinc compared to 637 thousand ounces of silver, 9.0 million pounds of lead, and 12.3 million pounds of zinc sold in the prior year.   

Total and cash mining costs per tonne at the GC Mine in Fiscal 2017 were $40.03 and $32.1 per tonne, compared to $46.49 and $38.23 per tonne in Fiscal 2016. The decrease in cash mining costs was mainly because approximately 35% of ore was by-product ore from exploration tunnelling or extracted from previously mined stopes for which direct mining costs were paid in prior years and the only cost involved was to ship the ore to the mill.  

Total and cash milling costs per tonne at the GC Mine in Fiscal 2017 were $17.78 and $14.73, compared to $18.30 and $15.79, respectively, in Fiscal 2016. The decrease in milling costs was mainly due to the exclusion of mineral resources from milling costs as discussed above.

Correspondingly, cash production costs per tonne of ore processed in Fiscal 2017 at the GC Mine decreased by 13% to $46.83 from $54.02 in the prior year due to the decrease in both per tonne cash mining and milling costs.

Cash costs per ounce of silver, net of by-product credits, at the GC Mine, was negative $6.47 compared to $1.85 in the prior year. The decrease was mainly due to: i) lower per tonne cash production costs as discussed above, and ii) a 12% increase in by-product credits, mainly arising from more zinc sold and a 19% and 33% increase in net realized lead and zinc selling prices. Sales from lead and zinc accounted for 69% of the total sales at the GC Mine in Fiscal 2017, and amounted to $14.3 million, an increase of $1.8 million, compared to $12.5 million in the prior year.

All in sustaining costs per ounce of silver, net of by-product credits, in Fiscal 2017 at the GC Mine was $0.20 compared to $8.81 in the prior year. The decrease was mainly due to lower cash costs per ounce of silver and less corporate expenditures and sustaining capital expenditures incurred.

In Fiscal 2017, approximately 12,484 m of underground diamond drilling (Fiscal 2016 – 20,556 m) and 14,690 m of tunnelling (Fiscal 2016 – 13,570 m) were completed and expensed as mining preparation costs at the GC Mine. In addition, approximately 1,721 m of horizontal tunnel, raises and declines (Fiscal 2016 – 1,409 m) were completed and capitalized.  Total exploration and development expenditures capitalized at the GC Mine in Fiscal 2017 were $0.7 million compared to $0.9 million in Fiscal 2016.

In Q4 Fiscal 2017, the Company mined 40,224 tonnes of ore at the GC Mine, a 20% decrease compared to 50,014 tonnes in the prior year quarter. Correspondingly, ore milled decreased by 20% to 39,929 tonnes from 50,124 tonnes in Q4 Fiscal 2016. Head grades were 91 g/t for silver, 1.3% for lead, and 2.6% for zinc in Q4 Fiscal 2017, compared to 92 g/t for silver, 2.0% for lead, and 2.7% for zinc in the prior year quarter. 

Silver, lead, and zinc metals sold in Q4 Fiscal 2017 at the GC Mine was down by 55%, 58%, and 82%, respectively, to approximately 53 thousand ounces silver, 818 thousand pounds lead, and 455 thousand pounds zinc from 118 thousand ounces silver, 2.0 million pounds lead, and 2.6 million pounds of zinc.  The decrease was mainly due to: i) lower production in Q4 Fiscal 2017, and ii) increase in concentrate inventory. As at March 31, 2017, GC mine was holding 198 tonnes of lead concentrate inventory and 1,503 tonnes of zinc concentrate inventory, an increase of 127 tonnes and 1,469 tonnes, respectively, compared to 71 tonnes of lead concentrate and 34 tonnes of zinc concentrates held as at March 31, 2016, and an increase of 188 tonnes and 1,494 tonnes, respectively, compared to 10 tonnes of lead concentrate and 29 tonnes of zinc concentrate held as at December 31, 2016.

In Q4 Fiscal 2017, the total and cash mining costs per tonne, at the GC Mine, were $45.37 and $37.91, compared to $34.76 and $26.24 in the prior year period. The increase in per tonne cash mining costs was mainly due to lower output resulting in higher per tonne labor costs and mine administration costs.  The lower output was due to the annual Chinese New Year, which reduced mine operations to only two months during the quarter.  

The total milling and cash milling costs per tonne in Q4 Fiscal 2017 at the GC Mine was $24.99 and $20.06, compared to $20.67 and $16.99 in the prior year quarter. The increase in per tonne milling costs was mainly due to lower output resulting in higher per tonne fixed overhead costs allocated. 

Correspondingly, cash production costs per tonne of ore processed in Q4 Fiscal 2017 at the GC Mine increased to $57.97 from $43.23 in the prior year quarter due to the increase in both per tonne cash mining and milling costs.

Alex Zhang, P.Geo., Vice President, Exploration, is the Qualified Person for Silvercorp under NI 43-101 and has reviewed and given consent to the technical information contained in this news release.

This earnings release should be read in conjunction with the Company's Management Discussion & Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on SEDAR at www.sedar.com and are also available on the Company's website at www.silvercorp.ca.  All figures are in United States dollars unless otherwise stated.

About Silvercorp

Silvercorp is a low-cost silver-producing Canadian mining company with multiple mines in China. The Company's vision is to deliver shareholder value by focusing on the acquisition of under developed projects with resource potential and the ability to grow organically. For more information, please visit our website at www.silvercorp.ca.

CAUTIONARY DISCLAIMER - FORWARD LOOKING STATEMENTS

Certain of the statements and information in this press release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategies", "targets", "goals", "forecasts", "objectives", "budgets", "schedules", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information.  Forward-looking statements or information relate to, among other things: the price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company's material properties; the sufficiency of the Company's capital to finance the Company's operations; estimates of the Company's revenues and capital expenditures; estimated production from the Company's mines in the Ying Mining District; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company's operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company's properties.

Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; property interests;  joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into the Company's existing operations;  competition;  operations and political conditions; regulatory environment in China and Canada;  environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting as per the requirements of the Sarbanes-Oxley Act; and bringing actions and enforcing judgments under U.S. securities laws.

This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's Annual Information Form for the year ended March 31, 2017 under the heading "Risk Factors".  Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended.  Accordingly, readers should not place undue reliance on forward-looking statements or information.  

The Company's forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.

 

SILVERCORP METALS INC.





Consolidated Statements of Financial Position





(Unaudited - Expressed in thousands of U.S. dollars)












As at March 31,


As at March 31,



2017


2016

ASSETS





Current Assets






Cash and cash equivalents


$

73,003


$

41,963


Short-term investments


23,466


19,999


Trade and other receivables


1,311


2,041


Inventories


8,710


8,857


Due from related parties


92


103


Income tax receivable


-


394


Prepaids and deposits


4,250


3,960



110,832


77,317

Non-current Assets






Long-term prepaids and deposits


959


1,856


Reclamation deposits


5,054


2,301


Investment in an associate


8,517


3,133


Other investments


1,207


287


Plant and equipment


65,201


71,045


Mineral rights and properties


206,200


216,080

TOTAL ASSETS


$

397,970


$

372,019






LIABILITIES AND EQUITY





Current Liabilities






Accounts payable and accrued liabilities


$

30,374


$

27,457


Bank loan


-


4,657


Mine right fee payable


-


3,970


Deposits received


6,798


5,849


Income tax payable


2,985


-


Due to related parties


-


179



40,157


42,112

Non-current Liabilities






Mine right fee payable


-


5,796


Deferred income tax liabilities


27,692


23,224


Environmental rehabilitation


12,186


14,328

Total Liabilities


80,035


85,460






Equity






Share capital


232,155


230,933


Share option reserve


13,325


12,628


Reserves


25,409


25,409


Accumulated other comprehensive loss


(50,419)


(35,994)


Retained earnings


42,651


562

Total equity attributable to the equity holders of the Company

263,121


233,538






Non-controlling interests


54,814


53,021

Total Equity


317,935


286,559






TOTAL LIABILITIES AND EQUITY


$

397,970


$

372,019

 

SILVERCORP METALS INC.

Consolidated Statements of Income

(Unaudited - Expressed in thousands of U.S. dollars, except for per share figures)








Three Months Ended March 31,


Years Ended March 31,



2017

2016


2017

2016








Sales


$

34,064

$

19,426


$

163,471

$

107,940

Cost of sales


13,760

13,233


75,285

71,925

Gross profit


20,304

6,193


88,186

36,015








General and administrative


4,356

4,003


16,818

17,394

Government fees and other taxes


530

1,027


4,007

5,780

Foreign exchange (gain) loss


197

2,159


(339)

46

Loss on disposal of plant and equipment


81

20


538

100

Loss on disposal of a subsidiary


-

-


-

460

Share of (income) loss in associate


(122)

216


(282)

50

Impairment reversal of investment in associate


(5,278)

-


(5,278)

-

Impairment of plant and equipment and mineral rights and properties


-

-


181

-

Other income


(424)

(26)


(748)

(205)

Income from operations


20,964

(1,206)


73,289

12,390








Finance income


591

324


2,206

1,382

Finance costs


(75)

(333)


(760)

(1,084)

Income before income taxes


21,480

(1,215)


74,735

12,688








Income tax expense


5,146

(488)


19,237

2,749

Net income


$

16,334

$

(727)


$

55,498

$

9,939








Attributable to:








Equity holders of the Company


$

13,507

$

(1,520)


$

43,674

$

6,336


Non-controlling interests


2,827

793


11,824

3,603



$

16,334

$

(727)


$

55,498

$

9,939








Earnings per share attributable to the equity holders of the Company






Basic earnings per share


$

0.08

$

(0.01)


$

0.26

$

0.04

Diluted earnings per share


$

0.08

$

(0.01)


$

0.25

$

0.04

Weighted Average Number of Shares Outstanding - Basic


167,602,781

168,020,946


167,185,234

169,377,066

Weighted Average Number of Shares Outstanding - Diluted


171,984,629

168,020,946


171,350,024

169,763,096

 

SILVERCORP METALS INC.

Consolidated Statements of Cash Flow

(Unaudited - Expressed in thousands of U.S. dollars)






Three Months Ended March 31,


Years Ended March 31,


2017

2016


2017

2016

Cash provided by






Operating activities







Net income

$

16,334

$

(727)


$

55,498

$

9,939


Add (deduct) items not affecting cash:








Finance costs

75

333


760

1,084



Depreciation, amortization and depletion

2,101

3,193


18,913

18,926



Share of (income) loss in associate

(122)

216


(282)

50



Loss on disposal of a subsidiary

-

-


-

460



Impairment reversal of investment in associate

(5,278)

-


(5,278)

-



Impairment of plant and equipment and mineral rights and properties

-

-


181

-



Write down of inventories

-

159


-

159



Income tax expense

5,146

(488)


19,237

2,749



Finance income

(591)

(324)


(2,206)

(1,382)



Loss on disposal of plant and equipment

81

20


538

100



Share-based compensation

361

145


1,015

887


Income taxes paid

(9,637)

(681)


(13,667)

(1,208)


Interest received

591

324


2,206

1,382


Interest paid

(9)

(41)


(963)

(41)


Changes in non-cash operating working capital

(4,171)

2,215


4,485

(1,224)

Net cash provided by operating activities

4,881

4,344


80,437

31,881







Investing activities







Mineral rights and properties








Capital expenditures

(2,209)

(11,690)


(27,814)

(25,847)


Plant and equipment








Additions

(3,431)

(5,359)


(7,987)

(10,953)



Proceeds on disposals

-

55


51

287


Other investments








Acquisition

-

-


(782)

-



Proceeds on disposals

-

-


33

422


Reclamation deposit paid

(807)

(267)


(2,967)

(276)


Net purchases of short-term investments

7,424

(16,257)


(4,094)

(10,753)


Proceeds for sale of a subsidiary

-

-


-

11

Net cash used in investing activities

977

(33,518)


(43,560)

(47,109)







Financing activities







Bank loan








Proceeds

-

4,619


-

4,619



Repayment

(4,325)

-


(4,325)

-


Non-controlling interests








Loan advanced

-

-


-

(1,587)



Repayments received

-

1,589


-

1,589



Distribution

(762)

-


(2,222)

(1,661)


Cash dividends distributed

-

-


(1,585)

(1,323)


Proceeds from issuance of common shares

415

-


904

-


Common shares repurchased as part of normal course issuer bid

-

(894)


-

(2,580)

Net cash used in financing activities

(4,672)

5,314


(7,228)

(943)

Effect of exchange rate changes on cash and cash equivalents

4,843

2,447


1,391

(2,045)







Increase (decrease) in cash and cash equivalents

6,029

(21,413)


31,040

(18,216)

Cash and cash equivalents, beginning of the year

66,974

63,376


41,963

60,179

Cash and cash equivalents, end of the year

$

73,003

$

41,963


$

73,003

$

41,963

 

SILVERCORP METALS INC.

Mining Data

(Expressed in thousands of U.S. dollars, except for mining data figures)








 Year ended March 31, 2017 




Ying Mining
District1

GC2

 Consolidated 







 Production Data 





 Mine Data 






 Ore Mined (tonne)  

636,760

260,746

897,506



 Ore Milled (tonne) 

638,211

260,696

898,907








 + 

 Mining cost per tonne of ore mined ($) 

74.04

40.03

64.16




Cash mining cost per tonne of ore mined ($)

51.79

32.10

46.07




Non cash mining cost per tonne of ore mined ($)

22.25

7.93

18.09









+

Unit shipping costs($)

3.88

-

2.75









+

Milling costs per tonne of ore milled ($)

11.73

17.78

13.49




Cash milling costs per tonne of ore milled ($)

9.50

14.73

11.02




Non cash milling costs per tonne of ore milled ($)

2.23

3.05

2.47









+

Average Production Costs







Silver ($ per ounce)

5.74

7.03

6.07




Gold ($ per ounce)

412

-

446




Lead ($ per pound)

0.33

0.51

0.35




Zinc ($ per pound)

0.30

0.48

0.32




Other ($ per pound)

-

0.03

0.02








 + 

 Total production costs per ounce of Silver, net of by-product credits ($) 

(0.18)

(1.69)

(0.31)


 + 

 Total cash costs per ounce of Silver, net of by-product credits ($) 

(2.70)

(6.47)

(3.03)








 + 

 All-in sustaining costs per ounce of Silver, net of by-product credits ($) 

2.61

0.20

3.82


 + 

 All-in costs per ounce of Silver, net of by-product credits ($) 

3.18

0.80

4.40









 Recovery Rates 







Silver (%)

95.5

75.7

93.2




Lead (%)

96.5

85.7

95.3




Zinc (%)

46.0

84.7

67.2









 Head Grades 







Silver (gram/tonne)

303

94

242




Lead (%)

4.7

1.4

3.7




Zinc (%)

1.0

2.8

1.5








 Concentrate in stock  






 Lead concentrate (tonne)  

2,293

198

2,491



 Zinc concentate (tonne) 

480

1,503

1,983







 Sales Data  





 Metal Sales  






 Silver (in thousands of ounces) 

5,930

564

6,494



 Gold (in thousands of ounces) 

3.3

-

3.3



 Lead (in thousands of pounds) 

63,418

7,055

70,473



 Zinc (in thousands of pounds) 

5,848

12,446

18,294



 Other (in thousands of pounds) 

-

12,025

12,025








 Metal Sales  






 Silver (in thousands of $)  

83,606

5,950

89,556



 Gold (in thousands of $)   

3,344

-

3,344



 Lead (in thousands of $)  

51,479

5,373

56,852



 Zinc (in thousands of $)  

4,332

8,909

13,241



 Other (in thousands of $)  

-

478

478




142,761

20,710

163,471


Average Selling Price, Net of Value Added Tax and Smelter Charges 






 Silver ($ per ounce)   

14.10

10.55

13.79



 Gold ($ per ounce)  

1,013

-

1,013



 Lead ($ per pound)  

0.81

0.76

0.81



 Zinc ($ per pound)  

0.74

0.72

0.72







1 Ying Mining District includes mines: SGX, TLP, HPG,LM, BCG and HZG.

2 GC Silver recovery rate consists of 53.7% from lead concentrates and 21.9% from zinc concentrates. 

2 GC Silver sold in zinc concentrates is subjected to higher smelter and refining charges which lowers the net silver selling price. 

 

SILVERCORP METALS INC.

Mining Data

(Expressed in thousands of U.S. dollars, except for mining data figures)








Year ended March 31, 2016




Ying Mining
District1

GC2

Consolidated







Production Data





Mine Data






Ore Mined (tonne)

589,766

257,575

847,341



Ore Milled (tonne)

587,450

256,862

844,312








+

Mining costs per tonne of ore mined ($)

79.93

46.49

69.76




Cash mining costs per tonne of ore mined ($)

56.90

38.23

51.22




Non cash mining costs per tonne of ore mined ($)

23.03

8.26

18.54








+

Unit shipping costs ($)

4.01

-

2.79








+

Milling costs per tonne of ore milled ($) 

14.91

18.30

15.93




Cash milling costs per tonne of ore milled ($)

12.34

15.79

13.38




Non cash milling costs per tonne of ore milled ($)

2.57

2.51

2.55








+

Average Production Costs







Silver ($ per ounce)

7.61

8.80

8.02




Gold ($ per ounce)

492

699

532




Lead ($ per pound)

0.42

0.58

0.45




Zinc ($ per pound)

0.34

0.49

0.36




Other ($ per pound)

-

0.01

0.01








+

Total production costs per ounce of Silver, net of by-product credits ($)

4.62

6.66

4.88


+

Total cash costs per ounce of Silver, net of by-product credits ($)

1.38

1.85

1.44








+

All-in sustaining costs per ounce of Silver, net of by-product credits ($)

8.60

8.81

10.20


+

All-in costs per ounce of Silver, net of by-product credits ($)

10.10

18.54

12.74









Recovery Rates







Silver (%)

95.0

78.9

90.1




Lead (%)

95.6

88.2

93.4




Zinc (%)

54.1

82.9

62.7









Head Grades







Silver (gram/tonne)

268

94

216




Lead (%)

3.9

1.8

3.2




Zinc (%)

0.8

2.5

1.3








Concentrate in stock 






Lead concentrate (tonne) 

3,205

71

3,276



Zinc concentate (tonne)

280

34

314







Sales Data 





Metal Sales 






Silver (in thousands of ounces)

4,395

637

5,032



Gold (in thousands of ounces)

2.3

0.1

2.4



Lead (in thousands of pounds)

43,469

9,042

52,511



Zinc (in thousands of pounds)

5,155

12,302

17,457



Other (in thousands of pounds)

-

46,932

46,932








Metal Sales 






Silver (in thousands of $)

54,314

6,265

60,579



Gold (in thousands of $) 

1,871

42

1,913



Lead (in thousands of $) 

29,520

5,799

35,319



Zinc (in thousands of $) 

2,806

6,674

9,480



Other (in thousands of $) 

-

649

649




88,511

19,429

107,940


Average Selling Price, Net of Value Added Tax and Smelter Charges






Silver ($ per ounce) 

12.36

9.83

12.04



Gold ($ per ounce)

799

781

798



Lead ($ per pound)

0.68

0.64

0.67



Zinc ($ per pound)

0.54

0.54

0.54







1 Ying Mining District includes mines: SGX, TLP, HPG,LM, BCG and HZG.

2 GC Silver recovery rate consists of 59.17% from lead concentrates and 19.71% from zinc concentrates. 

2 GC Silver sold in zinc concentrates is subjected to higher smelter and refining charges which lower the net silver selling price. 

 

SILVERCORP METALS INC.


Mining Data


(Expressed in thousands of U.S. dollars, except for mining data figures)









 Three months ended March 31, 2017 




Ying Mining
District1

GC2

 Consolidated 







 Production Data 





 Mine Data 






 Ore Mined (tonne)  

112,755

40,224

152,979



 Ore Milled (tonne) 

108,051

39,929

147,980








 + 

Mining costs per tonne of ore mined ($) 

53.50

45.37

51.37




Cash mining costs per tonne of ore mined ($)

49.99

37.91

46.82




Non cash mining costs per tonne of ore mined ($)

3.51

7.46

4.55








 + 

Unit shipping costs($) 

3.92

-

2.88








 + 

Milling costs per tonne of ore milled ($)  

13.60

24.99

16.68




Cash milling costs per tonne of ore milled ($)

10.43

20.06

13.03




Non cash milling costs per tonne of ore milled ($)

3.17

4.93

3.65








 + 

Average Production Costs 







Silver ($ per ounce)

4.93

9.97

5.26




Gold ($ per ounce)

332

-

355




Lead ($ per pound)

0.33

0.68

0.35




Zinc ($ per pound)

0.35

0.67

0.36




Other ($ per pound)

-

0.04

0.02








 + 

Total production costs per ounce of Silver, net of by-product credits ($) 

(2.54)

4.49

(2.25)


 + 

 Total cash costs per ounce of Silver, net of by-product credits ($) 

(3.73)

(1.72)

(3.65)








 + 

All-in sustaining costs per ounce of Silver, net of by-product credits ($) 

0.74

14.55

3.26


 + 

All-in costs per ounce of Silver, net of by-product credits ($) 

0.86

14.55

3.37









 Recovery Rates 







Silver (%)

96.6

72.8

94.2




Lead (%)

95.6

82.4

94.4




Zinc (%)

46.2

74.8

61.8









 Head Grades 







Silver (gram/tonne)

298

91

242




Lead (%)

4.8

1.3

3.8




Zinc (%)

0.8

2.6

1.3








 Concentrate in stock  






 Lead concentrate (tonne)  

2,293

198

2,491



 Zinc concentate (tonne) 

480

1,503

1,983







 Sales Data  





 Metal Sales  






 Silver (in thousands of ounces) 

1,255

53

1,308



 Gold (in thousands of ounces) 

0.7

-

0.7



 Lead (in thousands of pounds) 

13,520

818

14,338



 Zinc (in thousands of pounds) 

1,033

455

1,488



 Other (in thousands of pounds) 

-

3,446

3,446








 Metal Sales  






 Silver (in thousands of $)  

17,653

682

18,335



 Gold (in thousands of $)   

662

-

662



 Lead (in thousands of $)  

12,756

717

13,473



 Zinc (in thousands of $)  

1,024

395

1,419



 Other (in thousands of $)  

-

175

175




32,095

1,969

34,064


Average Selling Price, Net of Value Added Tax and Smelter Charges 






 Silver ($ per ounce)   

14.07

12.87

14.02



 Gold ($ per ounce)  

946

-

946



 Lead ($ per pound)  

0.94

0.88

0.94



 Zinc ($ per pound)  

0.99

0.87

0.95







1 Ying Mining District includes mines: SGX, TLP, HPG,LM, BCG and HZG.

2 GC Silver recovery rate consists of 51.2% from lead concentrates and 21.7% from zinc concentrates. 

2 GC Silver sold in zinc concentrates is subjected to higher smelter and refining charges which lower the net silver selling price. 

 

SILVERCORP METALS INC.


Mining Data


(Expressed in thousands of U.S. dollars, except for mining data figures)









Three months ended March 31, 2016




Ying Mining
District1

GC2

Consolidated







Production Data





Mine Data






Ore Mined (tonne)

99,415

50,014

149,429



Ore Milled (tonne)

99,203

50,124

149,327








+

Mining costs per tonne of ore mined ($)

83.24

34.76

67.01




Cash mining costs per tonne of ore mined ($)

54.63

26.24

45.12




Non cash mining costs per tonne of ore mined ($)

28.61

8.52

21.89








+

Unit shipping costs ($)

3.57

-

2.37








+

Milling costs per tonne of ore milled ($) 

17.38

20.67

18.49




Cash milling costs per tonne of ore milled ($)

13.70

16.99

14.81




Non cash milling costs per tonne of ore milled ($)

3.68

3.68

3.68








+

Average Production Costs







Silver ($ per ounce)

7.55

8.03

7.80




Gold ($ per ounce)

517

-

545




Lead ($ per pound)

0.45

0.51

0.43




Zinc ($ per pound)

0.31

0.38

0.31




Other ($ per pound)


0.01

0.01








+

Total production costs per ounce of Silver, net of by-product credits ($)

5.15

4.71

5.10


+

Total cash costs per ounce of Silver, net of by-product credits ($)

2.83

(2.24)

2.21








+

All-in sustaining costs per ounce of Silver, net of by-product credits ($)

8.92

1.19

9.91


+

All-in costs per ounce of Silver, net of by-product credits ($)

10.16

51.45

17.09









Recovery Rates







Silver (%)

95.0

79.1

90.0




Lead (%)

96.3

84.9

92.7




Zinc (%)

57.6

82.6

65.4









Head Grades







Silver (gram/tonne)

310

92

242




Lead (%)

4.0

2.0

3.4




Zinc (%)

0.9

2.7

1.4








Concentrate in stock 






Lead concentrate (tonne) 

3,205

71

3,276



Zinc concentate (tonne)

280

34

314







Sales Data 





Metal Sales 






Silver (in thousands of ounces)

857

118

975



Gold (in thousands of ounces)

0.3

-

0.3



Lead (in thousands of pounds)

7,379

1,970

9,349



Zinc (in thousands of pounds)

999

2,576

3,575



Other (in thousands of pounds)

-

8,027

8,027








Metal Sales 






Silver (in thousands of $)

10,021

1,144

11,165



Gold (in thousands of $) 

262

-

262



Lead (in thousands of $) 

5,091

1,169

6,260



Zinc (in thousands of $) 

459

1,175

1,634



Other (in thousands of $) 

-

105

105




15,833

3,593

19,426


Average Selling Price, Net of Value Added Tax and Smelter Charges






Silver ($ per ounce) 

11.69

9.69

11.45



Gold ($ per ounce)

800

-

800



Lead ($ per pound)

0.69

0.61

0.63



Zinc ($ per pound)

0.46

0.46

0.46








1 Ying Mining District includes mines: SGX, TLP, HPG,LM, BCG and HZG.

2 GC Silver recovery rate consists of 63.1% from lead concentrates and 16.0% from zinc concentrates. 

2 GC Silver sold in zinc concentrates is subjected to higher smelter and refining charges which lower the net silver selling price. 

 

SOURCE Silvercorp Metals Inc

For further information: Silvercorp Metals Inc., Gordon Neal, Vice President, Corporate Development, Phone: (604) 669-9397, Toll Free 1(888) 224-1881, Email: investor@silvercorp.ca, Website: www.silvercorp.ca

RELATED LINKS
www.silvercorpmetals.com

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