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Silvercorp Reports Q3 Results: Net Income of $12.7 Million, $0.08 per Share and Provides Fiscal 2019 Production and Cash Costs Guidance

VANCOUVER, British Columbia – February 8, 2018 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX: SVM) (NYSE American: SVM) reported its financial and operating results for the third quarter ended December 31, 2017.  All amounts are expressed in US Dollars.

THIRD QUARTER HIGHLIGHTS

  • Net income attributable to equity shareholders of $12.7 million, or $0.08 per share1, compared to net income attributable to equity shareholders of $13.1 million, or $0.08 per share in the prior year quarter;
  • Gross margin of 52% compared with 55% in the prior year quarter;
  • Sales of $44.4 million, down $3.4 million or 7% compared to $47.8 million in the prior year quarter; 
  • Inventories of silver-lead concentrate of 6,234 tonnes, valued at approximately $16.0 million, an increase of $4.5 million or 39%, compared to 4,666 tonnes valued at approximately $11.5 million in the prior year quarter;
  • Silver, lead, and zinc metals sold amounted to approximately 1.5 million ounces silver, 15.8 million pounds lead, and 6.4 million pounds zinc, compared to 1.7 million ounces silver, 19.5 million pounds lead, and 5.7 million pounds zinc in the prior year quarter;
  • Head grades were 315 grams per tonne (“g/t”) for silver, 4.5% for lead, and 1.0% for zinc at the Ying Mining District, compared to 303 g/t for silver, 4.8% for lead and 0.8% for zinc in the prior year quarter;
  • Total and cash mining costs per tonne ore2 of $74.16 and $56.11, respectively, compared to $67.12 and $47.52 in the prior year quarter; 
  • Cash cost per ounce of silver2, net of by-product credits, of negative $5.92, compared to negative $5.48 in the prior year quarter; 
  • All-in sustaining cost per ounce of silver2, net of by-product credits, of $3.16, compared to $1.87 in the prior year quarter;
  • Spent $1.8 million to buyback 788,000 common shares of the Company;
  • Paid $1.7 million dividend to equity shareholders of the Company;
  • Invested $3.8 million to participate in a private placement of New Pacific Metals Corp.; and,
  • Ended the quarter with $113.3 million in cash and cash equivalents and short-term investments, an increase of $16.8 million or 17%, compared to $96.5 million as at March 31, 2017.

1 Earnings per share refers to basic earnings per share

2 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 Q3 Fiscal 2018 was $12.7 million or basic earnings per share of $0.08, compared to $13.1 million, or $0.08 per share in Q3 Fiscal 2017. 

Sales in Q3 Fiscal 2018 were $44.4 million, down 7% compared to $47.8 million in the same quarter last year. Silver and gold sales represented $19.8 million and $0.6 million, respectively, while base metals represented $23.9 million of total sales, compared to silver, gold and base metals sales of $23.4 million, $0.7 million, and $23.7 million, respectively, in the prior year quarter.

Cost of sales in Q3 Fiscal 2018 was $21.2 million, comparable to $21.5 million in Q3 Fiscal 2017.  The cost of sales included $15.6 million (Q3 Fiscal 2017 - $14.9 million) cash production costs, $1.3 million mineral resources tax (Q3 Fiscal 2017 - $1.4 million), and $4.4 million (Q3 Fiscal 2017 - $5.2 million) depreciation and amortization charges.

Gross profit margin in Q3 Fiscal 2018 was 52%, compared to 55% in Q3 Fiscal 2017. Ying Mining District’s gross margin was 55% compared to a 58% gross profit margin in the prior year quarter. GC Mine’s profit margin was 41% compared to a 39% gross profit margin in the prior year quarter.

General and administrative expenses in Q3 Fiscal 2018 and the nine months ended December 31, 2017 were $4.9 million and $14.0 million (Q3 Fiscal 2017 - $4.0 million, nine months ended December 31, 2016 - $12.5 million). The increase was mainly due to the resumption of activities at the XHP Project to review alternatives and activities carried at the BYP Mine to renew its mining license, resulting in additional office and administrative expenses and labour costs.

Income tax expenses in Q3 Fiscal 2018 were $4.3 million compared to $5.4 million in Q3 Fiscal 2017.  The income tax expense recorded in Q3 Fiscal 2017 included current income tax expense of $3.7 million (Q3 Fiscal 2016 – $4.7 million) and deferred income tax expense of $0.6 million (Q3 Fiscal 2016 – $0.6 million).

Cash flows provided by operating activities in Q3 Fiscal 2018 were $27.5 million, compared to $28.3 million in the prior year quarter.  Before changes in non-cash operating working capital, cash flows provided by operating activities in Q3 Fiscal 2018 were $23.0 million, a decrease of $3.4 million or 13%, compared to $26.4 million in the prior year quarter.

For the nine months ended December 31, 2017, net income attributable to equity shareholders of the Company was $34.8 million or $0.21 per share, up 15% compared to $30.2 million or $0.18 per share in the same prior year period; sales were $131.6 million, up 2% from $129.4 million in the same prior year period; and cash flow from operating activities was $65.1 million, down 14% from $75.6 million in the same prior year period.

Working capital as at December 31, 2017 was $84.9 million, an increase of $14.2 million or 20%, compared to $70.7 million working capital as at March 31, 2017.

OPERATIONS AND DEVELOPMENT

(i) Q3 Fiscal 2018 vs. Q3 Fiscal 2017

(ii) Nine months ended December 31, 2017 vs Nine months ended December 31, 2016

1. Ying Mining District, Henan Province, China

(i) Q3 Fiscal 2018 vs. Q3 Fiscal 2017

(ii) Nine months ended December 31, 2017 vs Nine months ended December 31, 2016

2.  GC Mine, Guangdong Province, China

(i) Q3 Fiscal 2018 vs. Q3 Fiscal 2017

(ii) Nine months ended December 31, 2017 vs Nine months ended December 31, 2016

FISCAL 2019 PRODUCTION AND CASH COST GUIDANCE  

(*) Both AISC and cash cost are non-IFRS measures.  AISC refers to all-in sustaining cost per tonne of ore processed. Cash cost refers to cash production costs per tonne of ore processed. Foreign exchange rates assumptions used are: US$1 = CAD$1.25, US$1 = RMB¥6.50.

  1. Ying Mining District, Henan Province, China
  1.  GC Mine, Guangdong Province, China

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.

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