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Silvercorp Metals fiscal 3Q revenue jumps 5% to $44.5M on strong production

It produces silver, lead and zinc metals in concentrates from mines in China, with ore mined up 1% to 262,586 tons from the prior-year quarter

Silvercorp Metals Inc - Silvercorp Metals fiscal 3Q revenue jumps 5% to $44.5M on strong production
The company has seen encouraging results from exploration at its GC silver-lead-zinc mine in China's Guangdong Province

China-focused miner Silvercorp Metals Inc (NSYEAMERICAN:SVM) (TSX:SVM) posted fiscal third-quarter results Friday that saw revenue leap 5% year-on-year, driven by encouraging production figures. 

For the fiscal third-quarter ended on December 31, 2019, the profitable Canadian mining company reported revenue which jumped 5% to $44.5 million, compared to the same period a year earlier. 

The mining company producing silver, lead and zinc metals in concentrates from mines in China said ore mined was up 1% to 262,586 tons, compared to the prior-year quarter. 

READ: Silvercorp Metals says exploration at its GC mine has extended mineralization

Silvercorp sold approximately 1.7 million ounces of silver, 18.8 million pounds of lead, and 8.4 million pounds of zinc, up 0%, 6% and 103%, respectively, compared to 1.7 million ounces of silver, 17.8 million pounds of lead, and 4.1 million pounds of zinc in the same period a year earlier. The company also sold 700 ounces of gold, down 36% compared to 1,100 ounces sold in the same quarter a year earlier.

The miner ended the quarter with inventories of 3,815 tonnes of silver-lead concentrate and 270 tonnes of zinc concentrate, down 9% and 54%, compared to 4,176 tonnes of silver-lead concentrate and 586 tonnes of zinc concentrate as at September 30, 2019.

Net income of $6.3 million

The company posted fiscal third-quarter net income of $6.3 million, or $0.04 per share, a decrease of $2.4 million compared to $8.7 million, or $0.05 per share in the prior-year quarter. 

The company said its financial results in the fiscal third-quarter of 2020 were mainly impacted by an increases of 17% and 20% in the average realized selling prices for silver and gold and an increases of 6% and 103% of lead and zinc sold, offset by a decreases of 21% and 27% in the average realized selling prices for lead and zinc, and a $1.3 million foreign exchange loss. 

The company saw a foreign exchange loss of $1.3 million during the fiscal third-quarter of 2020, compared to a foreign exchange gain of $2.4 million in the fiscal third-quarter of 2019. “The foreign exchange gain or loss is mainly driven by the fluctuation of the US dollar against the Canadian dollar,” explained the miner.

In other highlights, the company paid $2.2 million in dividends to shareholders.

Investment in New Pacific Metals 

It also invested $3.8 million in New Pacific Metals Corp through its public offering to maintain the company’s ownership interest at 28.9%.

The company has a strong balance sheet with $155.1 million in cash and cash equivalents and short-term investments, an increase of $19.9 million or 15% compared to $135.2 million at September 30, 2019.

For the nine month period ended on December 31, 2019, the company mined 779,235 tons of ore, an increase of 5% or 33,840 tons, compared to 745,395 tons mined in the same period a year earlier. Ore milled was 789,684 tons, up 5% or 40,740 tons, compared to 748,944 tons in the same prior year period.

Similarly, for the nine month period ended on December 31, the company sold around 5.5 million ounces of silver, 2,800 ounces of gold, 55.7 million pounds of lead, and 22.3 million pounds of zinc,  up 8%, 0%, 7%, and 45%, respectively, compared to 5.1 million ounces of silver, 2,800 ounces of gold, 52.1 million pounds of lead, and 15.4 million pounds of zinc sold in the same period a year earlier.

Fiscal 2021 production outlook 

In fiscal 2021, the company expects to process around 930,000-970,000 tons of ore, yielding 6.2 million to 6.5 million ounces of silver, 66.1 million to 68.5 million pounds of lead, and 24.5 million to 26.7 million pounds of zinc. The miner's fiscal 2021 production guidance represents an increase of approximately 2% to 7% in silver production, 2% to 5% in lead production, and 12% to 22% in zinc production compared to the current fiscal 2020 annual guidance.

--Adds fiscal 2021 production outlook--

Contact the author Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Quick facts: Silvercorp Metals Inc

Price: 5.35 CAD

TSX:SVM
Market: TSX
Market Cap: $927.76 m
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