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Silvercorp Metals sees healthy boost to silver, lead, and zinc metals sold as it reports 1Q results

Silvercorp mined 257,392 tonnes of ore in 1Q, a rise of 9%, mainly due to an increase of ore from its Ying Mining District

Ying mining district
The firm ended the quarter with US$121 million in cash and cash equivalents and short-term investments, a boost of $5.7 million or 5%

Silvercorp Metals Inc (TSE:SVM) (NSYEAMERICAN:SVM) saw a notable boost in the amount of silver, lead and zinc metals sold in its first quarter, the metals producer reported on Thursday. 

The Vancouver-based company, which is focused on silver-related mineral properties in China, reported an increase of 27%, 20%, and 15%, respectively, in the amount of silver, lead, and zinc metals sold in the period, according to a statement by the firm.

The company said it mined 257,392 tonnes of ore in the first quarter, an increase of 9% as compared to the 236,697 tonnes mined in the same quarter a year earlier. The boost was mainly due to an increase of ore mined at its flagship Ying Mining District, in Henan province, China. 

READ: Roth reiterates Silvercorp Metal's Buy rating, maintains price target

In the first quarter ended June 30, 2019, Silvercorp reported revenue of US$45.6 million, compared to US$45.1 million a year earlier, mostly due to the increase in metals sold. This was against a challenging backdrop, which saw a decrease in the selling price for silver, lead and zinc.

The firm reported net income of US$12.6 million, or US$0.07 per share in 1Q, compared to US$10.9 million or US$0.06 per share in the same period a year earlier. 

Silvercorp is the primary silver producer in China, with six silver-lead-zinc mines in the Ying mine district in Henan province, as well the silver-lead-zinc Gaocheng project in Guangdong, China. Silvercorp also holds a stake in New Pacific Metals Corp (CVE:NUAG) (OTCMKTS:NUPMF) which is focused on advancing its Silver Sand project in Bolivia. 

Strong cash balance

The firm ended the quarter with US$121 million in cash and cash equivalents and short-term investments, a boost of $5.7 million or 5%, compared to $115.3 million from the previous quarter.

Working capital came in at US$110.8 million, up from US$96.9 million in the prior quarter.

The company ended the period with inventories of 4,247 tonnes of silver-lead concentrate and 285 tonnes of zinc concentrate, compared to 3,248 tonnes of silver-lead concentrate and 368 tonnes of zinc concentrate in the previous quarter.

Silvercorp shares had climbed 4.2% higher to C$4.69 by the close on Thursday, before the company reported. The stock gained 4.7% to US$3.53 in New York. 

Contact Katie Lewis at katie@proactiveinvestors.com

Quick facts: Silvercorp Metals Inc

Price: 9.26 CAD

TSX:SVM
Market: TSX
Market Cap: $1.62 billion
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