Mr. Guoliang Ma reports
SILVERCORP REPORTS NET INCOME OF $46.4 MILLION, $0.27 PER SHARE, AND CASH FLOW FROM OPERATIONS OF $85.9 MILLION FOR FISCAL 2021
Silvercorp Metals Inc. has released its financial and operating results for the fourth quarter and 12 months ended March 31, 2021. All amounts are expressed in U.S. dollars, and figures may not add due to rounding.
Fiscal year 2021 highlights:
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Mined 964,925 tonnes of ore and milled 967,581 tonnes of ore, up 9 per cent and 8 per cent, respectively, compared with the prior year, with silver and lead production meeting the production guidance and zinc production beating the production guidance;
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Sold approximately 6.3 million ounces of silver, 4,700 ounces of gold, 67.1 million pounds of lead and 27.9 million pounds of zinc, up 1 per cent, 42 per cent, 3 per cent and 10 per cent, respectively, compared with the prior year;
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Revenue of $192.1-million, up 21 per cent or $33.3-million compared with $158.8-million in the prior year;
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Net income attributable to equity shareholders of $46.4-million, or 27 cents per share, up 35 per cent compared with $34.3-million, or 20 cents per share, in the prior year;
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Cash cost per ounce of silver, net of byproduct credits, of negative $1.80 compared with negative $1.91 in the prior year;
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All-in sustaining cost per ounce of silver, net of byproduct credits, of $7.49 compared with $6.86 in the prior year;
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Cash flow from operations of $85.9-million, up 11 per cent or $8.7-million compared with $77.2-million in the prior year;
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Received $6.5-million ($9.0-million (Canadian)) break fee from Guyana Goldfields Inc. and realized a gain of $15.4-million on disposal of the shares of Guyana Goldfields;
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Paid $4.4-million of dividends to the company's shareholders;
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Invested $5.8-million in a private placement of New Pacific Metals Corp. (NUAG) to maintain the company's ownership interest;
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Acquired a 26.99-per-cent interest in Whitehorse Gold Corp. (WHG), having a fair market value of $15.1-million as at March 31, 2021, as a result of: (a) receiving 5,740,285 WHG common shares under a spinout transaction completed by NUAG; and (b) subscribing for 5,774,000 WHG common shares at total cost of $1.3-million under a private placement;
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Won an on-line auction to acquire the exploration rights to the Zhonghe silver project from the Henan provincial government of China, with the mineral right transfer contract pending the national security clearance by the related authorities;
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Acquired a 43.8-per-cent interest in the La Yesca silver project in Mexico through a new corporate structure, New Infini Silver Inc., for approximately $9.1-million;
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Strong balance sheet with $199.1-million in cash and cash equivalents and short-term investments, an increase of $56.6-million or 40 per cent compared with $142.5-million as at March 31, 2020. This does not include $212.1-million in total market value of investments in associates and equity investments in other companies as at March 31, 2021.
Highlights for Q4 fiscal 2021:
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Mined 163,072 tonnes of ore and milled 180,674 tonnes of ore, up 53 per cent and 76 per cent, respectively, compared with the prior-year quarter;
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Sold approximately 1.1 million ounces of silver, 700 ounces of gold, 10.9 million pounds of lead and 4.6 million pounds of zinc, up 32 per cent, 40 per cent, 13 per cent and 50 per cent, respectively, compared with approximately 800,000 ounces of silver, 500 ounces of gold, 9.7 million pounds of lead and 3.1 million pounds of zinc in the prior-year quarter;
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Revenue of $35.7-million, up 89 per cent or $16.8-million compared with $18.9-million in the prior-year quarter;
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Net income attributable to equity shareholders of $7.0-million, or four cents per share, compared with $3.2-million, or two cents per share, in the prior-year quarter;
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Cash cost per ounce of silver, net of byproduct credits, of negative 39 cents compared with negative 85 cents in the prior-year quarter;
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All-in sustaining cost per ounce of silver, net of byproduct credits, of $12.55 compared with $15.17 in the prior-year quarter;
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Cash flow from operations of $2.2-million compared with $6.3-million in the prior-year quarter. The decrease was mainly due to $9.4-million use of cash from working capital changes. Before changes in non-cash working capital, cash flows provided by operating activities in the current quarter were $11.9-million, up $2.7-million compared with $9.2-million in fourth quarter fiscal 2020.
CONSOLIDATED FINANCIAL RESULTS
Three months ended March 31, Year ended March 31,
2021 2020 2021 2020
Financial
Revenue (in thousands of $) $35,732 $18,859 $192,105 $158,829
Mine operating earnings (in thousands of $) 13,404 3,204 84,162 59,374
Net earnings attributable to equity shareholders 7,021 3,163 46,376 34,274
Earning per share -- basic ($/share) 0.04 0.02 0.27 0.20
Net cash generated from operating activities (in thousands of $) 2,231 6,278 85,912 77,246
Capitalized expenditures (in thousands of $) 10,115 3,917 45,556 33,671
Cash and cash equivalents and short-term investments (in thousands of $) 199,092 142,519 199,092 142,519
Working capital (in thousands of $) 184,013 130,351 184,013 130,351
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Metals sold
Silver (in thousands of ounces) 1,056 800 6,315 6,257
Gold (in thousands of ounces) 0.7 0.5 4.7 3.3
Lead (in thousands of pounds) 10,876 9,654 67,118 65,344
Zinc (in thousands of pounds) 4,580 3,059 27,914 25,401
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Average selling price, net of value-added tax and smelter charges
Silver ($/ounce) 20.11 12.29 17.61 13.56
Gold ($/ounce) 1,437 1,250 1,430 1,185
Lead ($/pound) 0.81 0.67 0.75 0.80
Zinc ($/pound) 0.98 0.51 0.78 0.62
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1.
Fiscal 2021 financial results
Net income attributable to equity shareholders of the company in fiscal 2021 was $46.4-million or 27 cents per share, up 35 per cent or $12.1-million compared with $34.3-million or 20 cents per share in fiscal 2020.
In fiscal 2021, the company's consolidated financial results were mainly impacted by: (i) an increase of 1 per cent, 42 per cent, 3 per cent and 10 per cent, respectively, in silver, gold, lead and zinc sold; (ii) an increase of 30 per cent, 21 per cent and 26 per cent, respectively, in the realized selling prices for silver, gold and zinc; (iii) a $7.7-million gain on equity investment; offset by: (iv) a decrease of 6 per cent in the realized selling price for lead; and (v) a $7.7-million foreign exchange loss.
Revenue in fiscal 2021 was $192.1-million, up 21 per cent or $33.3-million compared with $158.8-million in fiscal 2020. The increase was mainly due to: (i) an increase of $5.9-million arising from the increase in the quantities of metal sold; (ii) an increase of $30.2-million arising from the increase in the realized selling price for silver, gold and zinc; offset by: (iii) a decrease of $2.8-million arising from the decrease in the realized selling price for lead. Revenues from silver, gold and base metals were $111.2-million, 6.7-million and $74.2-million, respectively, up 31 per cent, 72 per cent and 6 per cent, respectively, compared with $84.9-million, $3.9-million and $70.0-million in fiscal 2020. Revenue from the Ying mining district was $157.3-million, up 20 per cent compared with $131.4-million in fiscal 2020. Revenue from the GC mine was $33.3-million, up 21 per cent compared with $27.4-million in fiscal 2020.
Income from mine operations in fiscal 2021 was $84.2-million, up 42 per cent compared with $59.4-million in fiscal 2020. Income from mine operations at the Ying mining district was $74.2-million, up 37 per cent compared with $54.1-million in fiscal 2020. Income from mine operations at the GC mine was $9.8-million, up 72 per cent compared with $5.7-million in fiscal 2020.
Cash flow provided by operating activities in fiscal 2021 was $85.9-million, up 11 per cent compared with $77.2-million in fiscal 2020.
The company ended the fiscal year with $199.1-million in cash, cash equivalents and short-term investments, up 40 per cent or $56.6-million compared with $142.5-million as at March 31, 2020.
Working capital as at March 31, 2021, was $184.0-million, up 41 per cent or $53.6-million compared with $130.4-million as at March 31, 2020.
2.
Fourth quarter fiscal 2021 financial results
Net income attributable to equity shareholders of the company in Q4 fiscal 2021 was $7.0-million, or four cents per share, up 122 per cent or $3.9-million compared with $3.2-million, or two cents per share, in the three months ended March 31, 2020.
Compared with the prior-year quarter, the company's consolidated financial results in Q4 fiscal 2021 were mainly impacted by the following: (i) an increase of 32 per cent, 40 per cent, 13 per cent and 50 per cent, respectively, in silver, gold, lead and zinc sold; (ii) an increase of 64 per cent, 15 per cent, 21 per cent and 92 per cent, respectively, in the realized selling prices for silver, gold, lead and zinc; offset by: (iii) an $800,000 foreign exchange loss; and (iv) a $1.1-million loss on equity investments.
Revenue in Q4 fiscal 2021 was $35.7-million, up 89 per cent or $16.8-million compared with $18.9-million in Q4 fiscal 2020. The increase was mainly due to: (i) an increase of $7.7-million arising from the increase in the quantities of metal sold; and (ii) an increase of $9.1-million arising from the increase in the realized selling prices. Revenue from silver, gold and base metals was $21.2-million, $1.0-million and $13.5-million, respectively, up 116 per cent, 61 per cent and 61 per cent, respectively, compared with $9.8-million, $600,000 and $8.4-million in Q4 fiscal 2020. Revenue from the Ying mining district was $29.5-million, up 88 per cent compared with $15.7-million in Q4 fiscal 2020. Revenue from the GC mine was $6.3-million, up 97 per cent compared with $3.2-million in fiscal 2020.
Income from mine operations in Q4 fiscal 2021 was $13.4-million, up 319 per cent compared with $3.2-million in Q4 fiscal 2020. Income from mine operations at the Ying mining district was $11.8-million compared with $3.0-million in Q4 fiscal 2020. Income from mine operations at the GC mine was $1.6-million compared with $200,000 in Q4 fiscal 2020.
Cash flows provided by operating activities in Q4 fiscal 2021 were $2.2-million compared with $6.3-million in Q4 fiscal 2020. The decrease was mainly due to a $9.4-million use of cash from working capital changes. Before changes in non-cash working capital, cash flows provided by operating activities in the current quarter were $11.9-million, up $2.7-million compared with $9.2-million in Q4 fiscal 2020.
CONSOLIDATED OPERATIONAL RESULTS
Three months ended March 31, Year ended March 31,
2021 2020 2021 2020
Ore production (tonne)
Ore mined 163,072 106,595 964,925 885,830
Ore milled 180,674 102,431 967,581 892,215
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Metal production
Silver (in thousands of ounces) 1,195 696 6,330 6,291
Gold (in thousands of ounces) 0.3 0.2 3.5 3.3
Lead (in thousands of pounds) 12,156 7,772 68,430 67,373
Zinc (in thousands of pounds) 4,672 3,276 28,012 25,581
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Cash costs
Cash cost per ounce of silver, net of byproduct credits ($) (0.39) (0.85) (1.80) (1.91)
All-in sustaining cost per ounce of silver, net of byproduct credits ($) 12.55 15.17 7.49 6.86
Cash production cost per tonne of ore processed ($) 85.70 68.93 72.71 68.91
All-in sustaining cost per tonne of ore processed ($) 156.36 188.57 128.20 125.29
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1.
Fiscal 2021 operational results
In fiscal 2021, on a consolidated basis, the company mined 964,925 tonnes of ore, up 9 per cent or 79,095 tonnes compared with 885,830 tonnes in fiscal 2020. Ore milled in fiscal 2021 was 967,581 tonnes, up 8 per cent or 75,367 tonnes compared with 892,215 tonnes in fiscal 2020.
The company produced approximately 6.3 million ounces of silver, 3,500 ounces of gold, 68.4 million pounds of lead and 28.0 million pounds of zinc, up 1 per cent, 6 per cent, 2 per cent and 10 per cent, respectively, compared with 6.3 million ounces of silver, 3,300 ounces of gold, 67.4 million pounds of lead and 25.6 million pounds of zinc in fiscal 2020.
In fiscal 2021, the consolidated cash production cost per tonne of ore processed in fiscal 2021 was $72.71, up 6 per cent compared with $68.91 in fiscal 2020, in line with the company's annual guidance. The consolidated all-in sustaining production cost per tonne of ore processed was $128.20, an increase of 2 per cent compared with $125.29 in fiscal 2020, also in line with the company's annual guidance.
The consolidated cash cost per ounce of silver, net of byproduct credits, was negative $1.80 compared with negative $1.91 in the prior year. The increase was mainly due to an increase of 6 per cent in cash production cost per tonne of ore processed, offset by an increase of 99 cents in byproduct credits per ounce of silver. Sales from lead and zinc in fiscal 2021 amounted to $72.3-million, up 7 per cent or $4.6-million compared with $67.7-million in fiscal 2020.
The consolidated all-in sustaining cost per ounce of silver, net of byproduct credits, was $7.49 compared with $6.86 in fiscal 2020. The increase was mainly due to an increase of 2 per cent in all-in sustaining production cost per tonne of ore processed, offset by an increase of 99 cents in byproduct credits per ounce of silver.
In fiscal 2021, on a consolidated basis, a total of 254,900 metres or $8.7-million worth of diamond drilling were completed (fiscal 2020: 108,156 metres or $3.5-million), of which approximately 196,320 metres or $5.0-million worth of underground drilling were expensed as part of mining costs (fiscal 2020: 108,156 metres or $3.5-million) and approximately 58,580 metres or $3.7-million worth of surface drilling were capitalized (fiscal 2020: nil). Mining preparation tunnelling of 34,637 metres that cost $8.9-million was completed and expensed as part of mining costs (fiscal 2020: 38,403 metres or $10.3-million), and 85,221 metres or $31.5-million worth of tunnels, raises, ramps and declines (fiscal 2020: 73,567 metres or $26.3-million) were completed and capitalized.
2.
Q4 fiscal 2021 operational results
In Q4 fiscal 2021, the company mined 163,072 tonnes of ore, up 53 per cent or 56,477 tonnes compared with 106,595 tonnes in Q4 fiscal 2020. Ore milled in Q4 fiscal 2021 was 180,674 tonnes, up 76 per cent or 78,243 tonnes compared with 102,431 tonnes in Q4 fiscal 2020. The increase was mainly due to an extra month's operational shutdown due to COVID-19 in Q4 fiscal 2020.
The company produced approximately 1.2 million ounces of silver, 300 ounces of gold, 12.2 million pounds of lead and 4.7 million pounds of zinc, up 72 per cent, 50 per cent, 56 per cent and 43 per cent, respectively, compared with approximately 700,000 ounces of silver, 200 ounces of gold, 7.8 million pounds of lead and 3.3 million pounds of zinc in Q4 fiscal 2020.
In Q4 fiscal 2021, the consolidated cash production cost per tonne of ore processed was $85.70, up 24 per cent compared with $68.93 in Q4 fiscal 2020. The increase was mainly due to certain fixed overhead costs related to mining operations expensed directly as mine general and administrative expense during the extra-month operational shutdown in Q4 fiscal 2020. The consolidated all-in sustaining production cost per tonne was $156.36, down 17 per cent compared with $188.57 in Q4 fiscal 2020. The decrease was mainly due to higher production resulting in lower per-tonne fixed-cost allocation.
In Q4 fiscal 2021, the consolidated cash cost per ounce of silver, net of byproduct credits, was negative 39 cents compared with negative 85 cents in Q4 fiscal 2020. The increase was mainly due to the increase in per-tonne cash production cost as discussed above, offset by an increase of $2.44 in byproduct credits per ounce of silver.
In Q4 fiscal 2021, the consolidated all-in sustaining cost per ounce of silver, net of byproduct credits, was $12.55 compared with $15.17 in Q4 fiscal 2020. The decrease was mainly due to the decrease in per-tonne all-in sustaining production cost as discussed above and an increase of 18 cents in all-in sustaining costs per ounce of silver.
In Q4 fiscal 2021, on a consolidated basis, a total of 49,459 metres or $1.6-million worth of diamond drilling were completed (Q4 fiscal 2020: 14,612 metres or $500,000), of which approximately 41,572 metres or $800,000 worth of underground drilling were expensed as part of mining costs (Q4 fiscal 2020: 14,612 metres or $500,000), and approximately 7,887 metres or $800,000 worth of surface drilling) were capitalized (Q4 fiscal 2020: nil). Mining preparation tunnelling of 7,015 metres that cost $1.5-million was completed and expensed as part of mining costs (Q4 fiscal 2020: 2,163 metres or $700,000), and 10,803 metres or $4.7-million worth of tunnels, raises, ramps and declines were completed and capitalized (Q4 fiscal 2020: 9,830 metres or $4.3-million).
Individual mine operating performance
Ying mining district
In fiscal 2021, a total of 208,904 metres or $6.9-million worth of diamond drilling (fiscal 2020: 85,643 metres or $2.5-million) were completed at the Ying mining district, of which a total of 150,324 metres or $3.2-million worth of underground diamond drilling (fiscal 2020: 85,643 or $2.5-million) were expensed as part of mining costs, and a total of 58,580 metres or $3.7-million worth of surface drilling (fiscal 2020: nil) were capitalized. In addition, mining preparation tunnelling of 22,918 metres that cost $6.7-million was completed and expensed as mining preparation costs (fiscal 2020: 19,088 metres or $5.7-million), and approximately 73,350 metres or $27.4-million worth of horizontal tunnels, raises, ramps and declines were completed and capitalized (fiscal 2020: 70,240 metres or $23.9-million).
GC mine
In fiscal 2021, approximately 45,996 metres or $1.8-million worth of underground diamond drilling (fiscal 2020: 22,513 metres or $1.0-million) and 11,719 metres or $2.2-million worth of tunnelling (fiscal 2020: 19,315 metres or $4.6-million) were completed and expensed as mining preparation costs at the GC mine. In addition, approximately 11,871 metres or $3.9-million of horizontal tunnels, raises, ramps and declines (fiscal 2020: 3,327 metres or $2.4-million) were completed and capitalized.
Update on mining contracts renewal at the Ying mining disctrict
The company updates that the company has negotiated and renewed contracts with all mining contractors at the Ying mining district, except one who worked at the LME mine. The renewed contracts with terms of two to three years represent an overall 14.5-per-cent increase compared with previous contracts, reflecting: (i) increased social welfare contribution for the contractors' workers; (ii) increased insurance coverage for contractors' workers; and (iii) increases in the prices per tonne ore mined and per metre of tunnelling developed by contractors. Based on the renewed contracts and assuming the same work done in fiscal 2021, the total annual increase is estimated at $5.0-million; however, this is expected to be offset by reduced tunnelling going forward as recent drilling activities in previously mining areas have defined resources that require minimal development.
The previous mining contractor at the LME mine was terminated as no agreement was able to reach. The company has hired most of the previous workers to work at the mine as internal contractors.
Conference call details
A conference call to discuss these results will be held on May 21 at 9 a.m. PDT (12 p.m. EDT). To participate in the conference call, please dial the numbers below.
Canada/United States toll-free: 888-664-6383
International toll: 416-764-8650
Conference ID: 57492576
Participants should dial in 10 to 15 minutes prior to the start time. A replay of the conference call and transcript will be available on the company's website.
Guoliang Ma, PGeo, manager of exploration and resources of the company, is the qualified person as defined by National Instrument 43-101 (Standards of Disclosure for Mineral Projects) and has reviewed and given consent to the technical information contained in this news release.
About Silvercorp Metals Inc.
Silvercorp is a profitable Canadian mining company producing silver, lead and zinc metals in concentrates from mines in China. The company's goal is to continuously create healthy returns to shareholders through efficient management, organic growth and the acquisition of profitable projects. Silvercorp balances profitability, social and environmental relationships, employees' well-being, and sustainable development.
We seek Safe Harbor.
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