Silvercorp Reports Record Silver Production, Sales and Cash Flows for Fiscal 2011 Q3: Net Income Up 140% to $29.7 Million or $0.18 Per Share
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/08/11 -- Silvercorp Metals Inc. (TSX: SVM)(NYSE: SVM) ('Silvercorp' or the 'Company') today reported its unaudited financial and operating results for the third quarter ended December 31, 2010 ('Q3 2011'). Record silver production coupled with increasing silver prices resulted in record quarterly sales, cash flows from operations and net income. Silvercorp also provided its operational and financial outlook for fiscal 2012. The following financial results are expressed in US dollars (US$) unless stated otherwise.
THIRD QUARTER HIGHLIGHTS
-- Record silver production of 1.52 million ounces, a 25% increase compared
to 1.22 million ounces in the third quarter of fiscal 2010 ('Q3 2010');
-- Record sales of $51.8 million, up 66% from a year ago;
-- Record net income of $29.7 million, or $0.18 per share, a 140% increase
from a year ago. Excluding all non-operational items, adjusted net
earnings were $22.2 million, or $0.13 per share;
-- Record cash flows from operations (before non-cash working capital
changes) of $31.6 million, or $0.19 per share, increased 68% from a year
ago;
-- Achieved total production cost of negative $5.93 per ounce of silver and
a cash cost of negative $7.13 per ounce of silver, maintaining
Silvercorp's position as the lowest cost silver producer among its
industry peers;
-- Raised $110.5 million net proceeds from an equity financing;
-- Received a mining permit for the GC Silver-Lead-Zinc Project in
Guangdong Province, China;
-- Acquired a 70% equity interest in BYP Gold-Lead-Zinc mine in Hunan
Province, China;
-- Dividend payment of $3.2 million, or CAD$0.02 per share; and
-- Total cash, cash equivalents, and short term investments increased to
$223.7 million.
FINANCIALS
For the third quarter of fiscal 2011, Silvercorp posted record net income of $29.7 million, or $0.18 per share, representing a 140% increase compared to the same quarter last year of $12.4 million or $0.08 per share. Excluding all non-operational items, which mainly consisted of (i) a $3.3 million dilution gain on our investment in New Pacific Metals Corp., an affiliate of the Company and (ii) a $3.7 million gain on our holding of held-for-trading financial assets, the adjusted net earnings were $22.2 million, or $0.13 per share.
For the nine months ended December 31, 2010, net income increased 96% to $56.3 million or $0.34 per share, compared to net income of $28.8 million, or $0.18 per share a year ago. Earnings improved primarily as a result of higher realized selling prices combined with record high metal production.
Sales in the third quarter were a record high of $51.8 million, up 66% from $31.3 million in the same quarter last year. The increase was attributable to higher quantities of metals sold and higher realized selling prices for all metals produced by the Company. In Q3 2011, the Company sold 1.52 million ounces of silver, 18.8 million pounds of lead and 4.8 million pounds of zinc, representing an increase of 25%, 16%, and 8%, respectively, compared to 1.22 million ounces of silver, 16.2 million pounds of lead, and 4.5 million pounds of zinc in Q3 2010. The average realized selling prices for silver, lead, and zinc increased to $20.36/oz., $0.89/lb., and $0.70/lb., respectively, up by 57%, 17%, and 9%, respectively, compared with the metal prices realized in Q3 2010. Higher metal production and realized selling prices also resulted in revenue increasing by 58% to $124.9 million for the nine months period ended December 31, 2010.
Cost of sales for the quarter was $11.8 million, representing a 67% increase as the Company mined 40% more ore and milled 79% more ore compared to the same quarter last year. For the nine months period ended December 31, 2010 and 2009, cost of goods sold were $31.8 million and $19.0 million, respectively. The cost of goods sold increased correspondingly with higher sales.
Gross profit margin for the quarter was 77%, unchanged from the prior year. The gross profit margin did not increase in line with metal prices, mainly due to the change in production mix compared to the same quarter last year. We successfully increased production at the HPG, LM, and TLP mines which have lower head grades relative to the Ying mine. In Q3 2011, 19% of Silvercorp's silver production was from the HPG, LM and TLP mines compared with 11% in Q3 2010. For the nine months ended December 31, 2010 and 2009, gross profit margin was 75% and 76%, respectively.
In Q3 2011, the Company generated $31.6 million of cash flows from operating activities before non-cash working capital changes, representing a 68% increase from Q3 2010. For the nine months ended December 31, 2010, cash flows from operating activities, before changes in non-cash working capital, was $71.9 million, a 58% improvement from the same period last year.
The Company ended the quarter with $223.7 million in cash and short term investments, and working capital of $209.3 million. During the quarter the company paid $3.2 million in dividends, $11.3 million in capital expenditures, and raised $110.5 million net proceeds from an equity financing.
OPERATIONS
In Q3 2011, Silvercorp achieved record silver production of 1.52 million ounces, up 25% from a year ago. Total ore mined also increased 40% to a record 167,213 tonnes. For the nine months ended December 31, 2010, the Company mined 466,639 tonnes of ore, a 43% increase from the same period last year of 325,720 tonnes. Increased production from the TLP, HPG, and LM mines contributed to the record mine production.
A total of 161,528 tonnes of ore was milled in the quarter, representing a 79% increase compared to 90,460 tonnes of ore milled in the same quarter last year. During the nine months ended December 31, 2010, 461,270 tonnes of ore was milled, up 68% compared to 273,974 tonnes last year. The increased mill throughput was achieved as the second mill at the Ying Mining Camp commenced operations at the beginning of 2010, which increased our total milling capacity to 2,500 tonnes per day, providing room to accommodate future mine production growth.
Consolidated total production cost per ounce of silver was negative $5.93 and the cash cost per ounce of silver was negative $7.13, up approximately 10% compared to the total production costs and cash production costs per ounce of silver of negative $6.87 and negative $7.73, respectively, in same quarter last year. Cost increased mainly because of the relatively lower head grades compared to a year ago, offset by higher realized base metal prices. During the nine months ended December 31, 2010, the consolidated total production cost and cash costs per ounce of silver were negative $5.46 and negative $6.60, respectively, compared to negative $5.61 and negative $6.40 a year ago.
On a quarterly basis, cash mining cost decreased from $48.93 per tonne last year to $48.30 per tonne, but increased from $40.36 in Q2 2011. The increase resulted from (i) higher utility costs as diesel was used to generate additional electricity to support the increased production and as backup for power shortages, (ii) higher labour costs from the increase of year-end bonus accrual and (iii) higher material costs as more steel and other supplies were used in mine preparation and development.
Silvercorp's total operational results for the past five quarters are summarized at Table 1 below:
Table 1: Total Operational Results
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010
31-Dec-10 30-Sept-10 30-Jun-10 31-Mar-10 31-Dec-09
Ore Mined (tonne)
Direct Smelting Ore
(tonne) 3,711 3,065 3,426 2,485 3,428
Ore to be milled
(tonne) 163,502 151,380 141,556 78,549 115,907
-------------------------------------------------------
167,213 154,445 144,982 81,034 119,335
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Run of Mine Ore (tonne)
Direct Smelting Ore
(tonne) 3,711 3,065 3,426 2,485 3,428
Ore Milled (tonne) 157,817 147,488 145,763 131,436 87,032
-------------------------------------------------------
161,528 150,553 149,189 133,921 90,460
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Mining costs per
tonne of ore
mined ($) 58.28 49.12 48.61 57.06 57.81
Cash Mining Cost
per tonne of ore
mined ($) 48.30 40.36 40.33 47.36 48.93
Non Cash Mining
Cost per tonne of
ore mined ($) 9.98 8.76 8.28 9.70 8.88
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Head Grade of Run of
Mine Ore
Silver (gram/tonne) 330.0 312.0 326.3 303.8 440.8
Lead (%) 5.7 5.6 6.1 5.7 8.3
Zinc (%) 1.8 1.9 2.0 1.6 3.0
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Total Production
Cost per ounce of
Silver ($) (5.93) (5.17) (5.21) (4.61) (6.87)
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Total Cash Cost per
ounce of Silver ($) (7.13) (6.30) (6.31) (5.64) (7.73)
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Metal Sales
Silver (in
thousands of ounce) 1,523 1,343 1,387 1,079 1,220
Lead (in thousands
of pound) 18,795 17,028 18,803 14,921 16,211
Zinc (in thousands
of pound) 4,791 3,869 4,431 2,747 4,454
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In Q3 2011, 81% of Silvercorp's silver production was from the Ying Mine (89% in Q3 2010). The operational results for the past five quarters at the Ying Mine are summarized at Table 2 below:
Table 2: Ying Mine Operational Results
Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010
30-Dec-10 30-Sept-10 30-Jun-10 31-Mar-10 31-Dec-09
Ore Mined (tonne)
Direct Smelting Ore
(tonne) 3,640 3,017 3,339 2,418 3,357
Ore to be milled
(tonne) 82,101 82,187 79,873 54,174 82,711
-------------------------------------------------------
85,741 85,204 83,212 56,592 86,068
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Run of Mine Ore (tonne)
Direct Smelting Ore
(tonne) 3,640 3,017 3,339 2,418 3,357
Ore Milled (tonne) 81,700 79,995 81,898 70,214 70,776
-------------------------------------------------------
85,340 83,012 85,237 72,632 74,133
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Mining costs per
tonne of ore mined ($) 64.12 54.79 55.10 57.50 56.90
Cash Mining Cost
per tonne of ore
mined ($) 49.85 42.66 43.83 45.60 45.75
Non Cash Mining
Cost per tonne of
ore mined ($) 14.27 12.13 11.27 11.84 11.15
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Head Grade of Run of
Mine Ore
Silver (gram/tonne) 499.0 461.0 470.5 429.3 488.5
Lead (%) 8.3 7.9 8.1 7.6 9.0
Zinc (%) 2.9 2.8 2.8 2.8 3.4
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Total Production
Cost per ounce of
Silver ($) (7.67) (6.94) (5.83) (6.14) (7.47)
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Total Cash Cost per
ounce of Silver ($) (8.76) (7.99) (6.80) (7.26) (8.36)
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Metal Sales
Silver (in
thousands of ounce) 1,241 1,095 1,147 836 1,086
Lead (in thousands
of pound) 14,862 13,486 14,230 11,097 14,327
Zinc (in thousands
of pound) 3,954 3,275 3,605 2,747 4,038
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EXPLORATION AND PROJECT DEVELOPMENT
Ying Mining Camp, Henan Province, China
In Q3 2011, the Ying Mining Camp incurred exploration and development expenditures of $6.1 million. These expenditures were mainly used to delineate and upgrade mineral resources by tunnelling and diamond drilling, and to build shafts, declines and raises. A total of 18,240 metres of tunnel, 40,386 metres of diamond drilling and 443 metres of shafts, declines and raises were completed.
This underground drilling program discovered 18 new veins at the TLP Mine and 12 new veins at the LM Mine with numerous high grade pockets identified. Furthermore, many existing veins in the Ying Mining Camp were also substantially extended to down dip and along striking directions. It is expected that those new discoveries will add resources/reserves that will either extend the life of the mine or increase the current mining capacity as many of those pockets are close to the existing mining tunnels and can be quickly developed into mining stopes.
GC Project, Guangdong Province, China
In Q3 2011, the GC project in the Guangdong Province received its 30 year mining permit, issued by the Ministry of Land and Resources of China. The permit was issued on the terms applied for, covering the entire 5.52 square kilometre area of the GC Project and allows for the operation of an underground mine to produce silver, lead and zinc ore.
BYP Project, Hunan Province, China
In Q3 2011, Silvercorp announced the acquisition of a 70% equity interest in Yunxiang Mining Co. Ltd. ('Yunxiang'), a private mining company in Hunan Province, China. Yunxiang's primary asset is the BYP Gold-Lead-Zinc mine (the 'BYP mine'), located 220 km, or a 3 hour drive, southwest of Changsha, the capital city of Hunan Province, China. The total cost of the share purchase and the joint venture capital investment is approximately US$33 million. The transaction successfully closed subsequent to the end of the quarter.
Silvertip Project, British Columbia, Canada
In Q3 2011, Silvercorp completed the 2010 surface drilling program on the Silvertip silver-lead-zinc project in northern British Columbia, Canada. A total of 10,913 metres has been drilled from 36 holes. The 2010 drilling program has successfully defined and updated the silver-lead-zinc resources on extensions to the east and south of the main ore body. A new resource estimate is currently underway. Silvercorp also conducted a 4,113 line kilometers VTEM airborne geophysical survey over an area of 367 square kilometres and completed certain studies and reports required for a B.C. Small Mine Permit application. A total of $8.3 million in capital expenditures were incurred on the Silvertip project as of December 31, 2010, of which $6.3 million was for exploration and permitting and $2.0 million was for camp and infrastructure.
OUTLOOK FOR THE FORTH QUARTER OF FISCAL YEAR 2011
During the first nine months of fiscal year 2011, Silvercorp produced 4.25 million ounces of silver, at a cash cost of negative $6.60 per ounce, net of by-product credits. The Company also produced 54.6 million pounds of lead and 13.1 million pounds of zinc during the nine month period. Silvercorp expects to meet or exceed its forecast to produce 5.3 million ounces of silver for its fiscal year ending March 31, 2011.
OUTLOOK FOR THE FISCAL YEAR 2012
Production in China
From the four mines at the Ying Mining Camp production is expected to increase to 600,000 tonnes of ore at a grade of 325g/t silver, 0.4g/t gold, 6% lead and 1.9% zinc, yielding 5.6 million ounces of silver, 4,000 ounces of gold, and 90 million pounds of lead and zinc. Total production costs will remain unchanged at approximately $75 per tonne of ore.
The BYP mine is expected to commence production in the first quarter of fiscal year 2012 and is expected to mine and mill 130,000 tonnes of ore at a grade of 7 g/t gold, yielding approximately 26,000 ounces of gold at an estimated total production cost of $28 per tonne of ore.
Budgets for mill construction, mine development and exploration of three projects in China
The total capital expenditures for the three projects in China are estimated at $67 million for fiscal 2012, which include capital expenditures of $53 million for mine development, mill construction, and other capital items (e.g. surface facilities, roads, land usage rights, and reporting) and exploration expenditures of $14 million to complete a 241,000 metre surface and underground drilling program. The budget estimate is based on the contracts on hand, designs by qualified Chinese engineering firms, and the Company's past operation experience in China. The details for each project are as follows:
The Ying Mining Camp
-- The capital expenditures for the Ying, TLP, LM and HPG mines and central
mill are budgeted at $18.5 million which includes several vertical
shafts, declines and raises totaling 7,000 metres ($5.6 million), 40,000
metres of horizontal tunnels for development and mining exploration ($7
million), 1,500 metres of ramps ($1.2 million), a new tailing facility
($2 million), and equipment as well as surface facilities ($2.7
million).
-- The exploration expenditure for a 171,000 metre underground drilling
program at the four mines of the Ying Camp is estimated to be $8.5
million.
The GC Project
-- The capital expenditures for fiscal 2012 are budgeted at $22.5 million,
which includes a 1,500 tonne per day mill and tailing dam ($12 million),
land-usage rights ($5 million), a 1,500 metre ramp ($1.2 million), a 500
metre shaft ($1.5 million) and surface facilities ($2.8 million). By the
end of fiscal 2012, it is expected that the GC project will achieve a
700 tonne per day mining capacity and a 1,500 tonne per day milling
capacity. In order to bring the project into full mining production of
1,500 tonnes per day, further capital expenditures will be required for
fiscal 2013 which are expected to be partially financed through cash
flows generated from the GC project.
-- As the Company has successfully obtained its mining permit for the GC
project, drilling will resume in fiscal 2012. A 20,000 metre surface
diamond drilling program is budgeted at $2.5 million.
The BYP Mine
-- The capital expenditures for fiscal 2012 are budgeted at $12 million. In
order to achieve an initial mining and milling capacity of 400 tonnes
per day, or a total of 130,000 tonnes of ore for fiscal 2012, the
Company will upgrade the existing 400 tonne per day floatation mill
($1.5 million), build a cement back-filling facility ($1.5 million),
complete about 7,000 metres of mine development tunnels ($1.5 million),
and acquire land usage rights and build surface facilities including
roads, an office, accommodations and a laboratory ($2.5 million), for a
total of $7 million of capital expenditures. In addition, to achieve a
production capacity of 1,000 tonnes per day starting in fiscal 2013, the
Company will spend $5 million to expand the 400 tonne per day mill to a
1,000 tonne per day capacity ($3.0 million) and develop 1,500 metres of
ramp and access tunnels ($2 million) to allow mechanized mining in the
future.
-- The exploration expenditures for a 50,000 metre underground and surface
drilling program are estimated to cost $3 million.
Silvertip project in Canada
The Company has budgeted $2 million to complete the ongoing environmental assessment study, to prepare and submit an application for a Small Mine Permit, and to complete a feasibility study for the project.
In addition to the aggressive exploration program carried out by the Company to grow the resources and reserves in its operating projects, Silvercorp continually seeks acquisition opportunities in China and other jurisdictions.
CONFERENCE CALL AND WEBCAST INFORMATION
A conference call and live audio webcast to discuss these results is scheduled as follows:
Date: Wednesday, February 9, 2011
Time: 8:00 am PT (11:00 am ET)
Dial-In Number: 1-612-234-9959
Live audio webcast: www.silvercorp.ca
(click on the link on the home page)
Playback webcast can be accessed at: www.silvercorp.ca
About Silvercorp Metals Inc.
Silvercorp Metals Inc. is engaged in the acquisition, exploration, development and mining of high-grade silver-related mineral properties in China and Canada. Silvercorp is the largest primary silver producer in China through the operation of the four silver-lead-zinc mines at the Ying Mining Camp in the Henan Province of China. Silvercorp is currently building the GC silver-lead-zinc project in Guangdong Province as its second China production base and foothold, and this will be followed by the third production foothold at the recently acquired BYP gold-lead-zinc project in Hunan Province. In Canada, Silvercorp is preparing to apply for a Small Mine Permit for the Silvertip high grade silver-lead-zinc mine project in northern British Columbia to provide a further platform for growth and geographic diversification. The Company's shares are traded on the New York Stock Exchange and Toronto Stock Exchange and are included as a component of the S&P/TSX Composite and the S&P/TSX Global Mining Indexes.
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 Camp; 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; First Nations title claims and rights; 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, 2010 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 Balance Sheets - Unaudited
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars)
December 31, 2010 March 31, 2010
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ASSETS
Current Assets
Cash and cash equivalents $ 196,428 $ 50,618
Short term investments 27,317 43,773
Accounts receivable,
prepaids and deposits 8,153 2,474
Inventories 4,105 3,175
Current portion of future
income tax assets 359 112
Amounts due from related parties 49 138
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236,411 100,290
Long term prepaids and deposits 2,272 505
Long term investments 43,530 15,106
Restricted cash 79 78
Plant and equipment 33,744 29,024
Mineral rights and properties 158,155 133,248
Future income tax assets 1,125 1,203
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$ 475,316 $ 279,454
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LIABILITIES
Current Liabilities
Accounts payable and
accrued liabilities $ 15,459 $ 7,504
Deposits received 2,873 6,737
Bank loan and notes payable - 1,465
Current portion of asset
retirement obligations 316 292
Dividends payable 3,511 3,238
Income tax payable 4,901 1,658
Current portion of future income
tax liabilities 82 -
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27,142 20,894
Future income tax liabilities 20,879 19,475
Asset retirement obligations 2,552 2,357
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50,573 42,726
Non-controlling interests 29,308 21,738
SHAREHOLDERS' EQUITY
Share capital 263,181 145,722
Contributed surplus 4,587 4,702
Reserves 31,893 31,893
Accumulated other comprehensive income 31,552 14,910
Retained earnings 64,222 17,763
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395,435 214,990
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$ 475,316 $ 279,454
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SILVERCORP METALS INC.
Consolidated Statements of Operations - Unaudited
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars, except for per share figures)
Three months ended Nine months ended
December 31, December 31,
---------------------------- -------------------------
2010 2009 2010 2009
---------------------------------------------------------------------------
Sales $ 51,838 $ 31,283 $ 124,905 $ 78,940
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Cost of sales 9,983 6,010 26,882 16,157
Depreciation,
amortization and
depletion 1,820 1,043 4,869 2,796
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11,803 7,053 31,751 18,953
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Gross profit 40,035 24,230 93,154 59,987
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Expenses
Accretion of asset
retirement obligations 42 32 122 93
Amortization 157 407 460 776
Foreign exchange
loss (gain) 1,342 791 1,174 (643)
General exploration
and property
investigation expenses 58 941 2,493 4,207
Impairment charges
and bad debt - - - 698
Investor relations 174 131 345 312
General and
administrative 3,647 2,688 11,145 7,221
Professional fees 185 201 759 1,439
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5,605 5,191 16,498 14,103
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34,430 19,039 76,656 45,884
Other income and (expenses)
Equity loss on
investment in NUX (131) (107) (227) (325)
Dilution gain on
investment in NUX 3,332 - 4,726 -
Gain on disposal of
mineral rights and
properties - - 537 -
Loss on disposal of
plant and equipment (201) (244) (650) (1,371)
Unrealized gain
(loss) on held-for-
trading securities 3,668 (10) 3,745 (22)
Gain on disposal of
long term investments 366 - 366 -
Interest expenses (10) - (40) -
Interest income 394 237 985 635
Other income 135 72 331 285
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7,553 (52) 9,773 (798)
Income before income taxes
and non-controlling
interests 41,983 18,987 86,429 45,086
Income tax expense (recovery)
Current 5,835 2,556 13,359 6,074
Future (735) 125 606 351
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5,100 2,681 13,965 6,425
Income before
non-controlling
interests 36,883 16,306 72,464 38,661
Non-controlling
interests (7,148) (3,897) (16,177) (9,874)
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Net income $ 29,735 $ 12,409 $ 56,287 $ 28,787
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Basic earnings
per share $ 0.18 $ 0.08 $ 0.34 $ 0.18
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Diluted earnings
per share $ 0.18 $ 0.08 $ 0.34 $ 0.18
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Weighted Average
Number of Shares
Outstanding-
Basic 166,965,680 162,379,441 165,541,533 161,853,198
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Weighted Average
Number of Shares
Outstanding-
Diluted 168,535,816 163,912,759 166,800,884 163,487,318
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SILVERCORP METALS INC.
Consolidated Statements of Cash Flows - Unaudited
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars)
Three months ended Nine months ended
December 31, December 31,
--------------------- --------------------
2010 2009 2010 2009
---------------------------------------------------------------------------
Cash provided by (used in)
Operating activities
Net income for the period $ 29,735 $ 12,409 $ 56,287 $ 28,787
Add (deduct) items not
affecting cash:
Accretion of asset retirement
obligations 42 32 122 93
Depreciation, amortization and
depletion 1,977 1,450 5,329 3,572
Equity loss on investment in
NUX 131 107 227 325
Dilution gain on investment in
NUX (3,332) - (4,726) -
Future income tax expenses
(recovery) (735) 125 606 351
Impairment charges and bad
debt - - - 698
Unrealized loss (gain) on
held-for-trading securities (3,668) 10 (3,745) 22
Gain on disposal of long term
investments (366) - (366) -
Gain on disposal of mineral
rights and properties - - (537) -
Loss on disposal of plant and
equipment 201 244 650 1,371
Non-controlling interests 7,148 3,897 16,177 9,874
Stock-based compensation 522 423 1,749 1,322
Unrealized foreign exchange
loss (gain) (77) 48 117 (970)
Changes in non-cash working
capital 469 (2,819) (1,966) (3,221)
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Cash provided by operating
activities 32,047 15,926 69,924 42,224
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Investing activities
Mineral rights and properties
Acquisition and capital
expenditures (8,460) (3,290) (20,378) (11,031)
Proceeds on disposals - - 537 -
Plant and equipment
Acquisition (2,804) (574) (6,210) (1,382)
Proceeds on disposals - 14 1 133
Long-term investments
Acquisition (8,319) - (10,338) (1,323)
Proceeds on disposals 1,113 - 1,113 -
Net redemption (purchase) of
short term investments 16,900 (4,532) 17,109 (5,251)
Prepayments to acquire plant
and equipment (955) 1,360 (2,187) (638)
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Cash used in investing
activities (2,525) (7,022) (20,353) (19,492)
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Financing activities
Advances to related parties,
net of repayments received 8 49 313 (56)
Bank loan and notes payable
Proceeds - - - 2,927
Repayments - - (1,473) (658)
Non-controlling interests
Distribution (10,582) (3,898) (10,582) (7,191)
Cash dividends distributed (3,233) (3,366) (9,607) (8,898)
Capital stock
Proceeds from issuance of
common shares 111,934 770 113,951 828
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Cash provided by (used in)
financing activities 98,127 (6,445) 92,602 (13,048)
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Effect of exchange rate changes
on cash and cash equivalents 2,516 1,228 3,637 2,349
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Increase in cash and cash
equivalents 130,165 3,687 145,810 12,033
Cash and cash equivalents,
beginning of period 66,263 49,816 50,618 41,470
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Cash and cash equivalents,
end of period $ 196,428 $ 53,503 $ 196,428 $ 53,503
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SILVERCORP METALS INC.
Mining Data
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(Expressed in thousands of U.S. dollars, except for mining data figures)
Q3 Fiscal 2011 Three months ended December 31, 2010
------------------------------------
YING HPG&LM TLP Total
------------------------------------
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne) 3,640 71 - 3,711
Stockpiled Ore (tonne) 82,101 22,216 59,184 163,502
------------------------------------
85,741 22,287 59,184 167,213
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Run of Mine Ore (tonne)
Direct Smelting Ore (tonne) 3,640 71 - 3,711
Ore Milled (tonne) 81,700 19,644 56,473 157,817
------------------------------------
85,340 19,715 56,473 161,528
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Mining cost per tonne of ore mined ($) 64.12 67.06 46.50 58.28
Cash mining cost per tonne of
ore mined ($) 49.85 58.15 42.33 48.30
Non cash mining cost per tonne of
ore mined ($) 14.27 8.91 4.17 9.98
Unit shipping costs($) 3.59 3.02 3.26 3.40
Milling cost per tonne of ore
milled ($) 13.89 13.21 13.56 13.69
Cash milling cost per tonne of
ore milled ($) 12.22 11.81 12.06 12.11
Non cash milling cost per tonne of
ore milled ($) 1.67 1.40 1.50 1.58
Average Production Cost
Silver ($ per ounce) 3.37 8.48 10.74 4.63
Gold ($ per ounce) 145.84 407.64 - 211.60
Lead ($ per pound) 0.15 0.36 0.47 0.20
Zinc ($ per pound) 0.12 0.29 0.37 0.16
Total production cost per ounce of
Silver ($) (7.67) (2.13) 3.96 (5.93)
Total cash cost per ounce of Silver ($) (8.76) (3.90) 2.37 (7.13)
Total Recovery of the Run of Mine Ore
Silver (%) 92.9 92.7 85.9 92.0
Lead (%) 96.6 95.4 88.4 95.3
Zinc (%) 70.1 67.1 71.1 70.1
Head Grades of Run of Mine Ore
Silver (gram/tonne) 499.0 186.0 125.0 330.0
Lead (%) 8.3 4.1 2.3 5.7
Zinc (%) 2.9 0.6 0.8 1.8
Sales Data
Metal Sales
Silver (in thousands of ounce) 1,241 105 177 1,523
Gold (in thousands of ounce) 0.4 0.4 0.0 0.8
Lead (in thousands of pound) 14,862 1,618 2,314 18,795
Zinc (in thousands of pound) 3,954 167 671 4,791
Metal Sales
Silver ($) 25,248 2,142 3,610 31,000
Gold ($) 392 359 1 752
Lead ($) 13,263 1,418 2,071 16,752
Zinc ($) 2,750 117 467 3,334
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41,653 4,036 6,149 51,838
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Average Selling Price, Net of Value
Added Tax and Smelter Charges
Silver ($ per ounce) 20.34 20.49 20.39 20.36
Gold ($ per ounce) 881.35 985.07 - 946.61
Lead ($ per pound) 0.89 0.88 0.89 0.89
Zinc ($ per pound) 0.70 0.70 0.70 0.70
SILVERCORP METALS INC.
Mining Data
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars, except for mining data figures)
Q3 Fiscal 2010 Three months ended December 31, 2009
------------------------------------
YING HPG&LM TLP Total
------------------------------------
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne) 3,357 72 - 3,428
Stockpiled Ore (tonne) 82,711 17,200 15,995 115,907
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86,068 17,272 15,995 119,335
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Run of Mine Ore (tonne)
Direct Smelting Ore (tonne) 3,357 72 - 3,428
Ore Milled (tonne) 70,776 14,943 1,313 87,032
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74,133 15,015 1,313 90,460
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Mining cost per tonne of ore mined ($) 56.90 59.96 60.40 57.81
Cash mining cost per tonne of
ore mined ($) 45.75 56.10 58.30 48.93
Non cash mining cost per tonne of
ore mined ($) 11.15 3.86 2.10 8.88
Unit shipping costs($) 3.60 2.78 2.80 3.38
Milling cost per tonne of
ore milled ($) 11.48 11.94 61.21 12.28
Cash milling cost per tonne of ore
milled ($) 10.45 10.85 44.28 11.01
Non cash milling cost per tonne of
ore milled ($) 1.02 1.09 16.92 1.27
Average Production Cost
Silver ($ per ounce) 2.58 5.63 13.10 2.93
Gold ($ per ounce) 83.44 288.55 - 128.91
Lead ($ per pound) 0.15 0.31 0.87 0.17
Zinc ($ per pound) 0.13 0.24 - 0.14
Total production cost per ounce of
Silver ($) (7.47) (2.15) 15.00 (6.87)
Total cash cost per ounce of Silver ($) (8.36) (2.71) 14.00 (7.73)
Total Recovery of the Run of Mine Ore
Silver (%) 91.0 85.9 86.4 92.1
Lead (%) 95.8 94.0 90.5 96.7
Zinc (%) 76.0 75.0 - 75.9
Head Grades of Run of Mine Ore
Silver (gram/tonne) 488.5 235.7 86.9 440.8
Lead (%) 9.0 5.3 2.7 8.3
Zinc (%) 3.4 0.9 - 3.0
Sales Data
Metal Sales
Silver (in thousands of ounce) 1,086 133 1 1,220
Gold (in thousands of ounce) 0.2 0 - 0.5
Lead (in thousands of pound) 14,327 1,873 11 16,211
Zinc (in thousands of pound) 4,038 416 - 4,454
Metal Sales
Silver ($) 14,094 1,739 11 15,844
Gold ($) 84 219 - 303
Lead ($) 10,917 1,358 8 12,283
Zinc ($) 2,618 235 - 2,853
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27,713 3,551 19 31,283
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Average Selling Price, Net of Value
Added Tax and Smelter Charges
Silver ($ per ounce) 12.98 13.11 11.00 12.99
Gold ($ per ounce) 420.00 671.78 - 571.70
Lead ($ per pound) 0.76 0.72 0.73 0.76
Zinc ($ per pound) 0.65 0.56 - 0.64
SILVERCORP METALS INC.
Mining Data
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars, except for mining data figures)
Q3 Fiscal 2011 Nine months ended December 31, 2010
------------------------------------
YING HPG&LM TLP Total
------------------------------------
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne) 9,996 196 10 10,202
Stockpiled Ore (tonne) 244,161 55,159 157,117 456,437
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254,157 55,355 157,127 466,639
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Run of Mine Ore (tonne)
Direct Smelting Ore (tonne) 9,996 196 10 10,202
Ore Milled (tonne) 243,593 53,568 153,907 451,068
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253,589 53,764 153,917 461,270
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Mining cost per tonne of ore mined ($) 58.06 64.45 38.57 52.25
Cash mining cost per tonne of ore
mined ($) 45.49 57.07 34.63 43.20
Non cash mining cost per tonne of
ore mined ($) 12.57 7.38 3.94 9.05
Unit shipping costs ($) 3.57 3.23 3.24 3.42
Milling cost per tonne of ore
milled ($) 13.30 12.84 13.30 13.25
Cash milling cost per tonne of
ore milled ($) 11.63 11.43 11.67 11.62
Non cash milling cost per tonne of
ore milled ($) 1.67 1.41 1.63 1.63
Average Production Cost
Silver ($ per ounce) 3.11 7.89 8.87 4.18
Gold ($ per ounce) 160.08 436.66 447.24 222.62
Lead ($ per pound) 0.15 0.38 0.44 0.21
Zinc ($ per pound) 0.12 0.29 0.35 0.17
Total production cost per ounce of
Silver ($) (6.83) (0.97) 1.74 (5.46)
Total cash cost per ounce of Silver
($) (7.87) (2.42) 0.03 (6.60)
Total Recovery of the Run of Mine Ore
Silver (%) 92.3 87.3 87.9 91.2
Lead (%) 96.4 94.7 88.6 95.1
Zinc (%) 70.1 60.3 70.4 69.5
Head Grades of Run of Mine Ore
Silver (gram/tonne) 476.8 229.3 135.1 322.8
Lead (%) 8.1 1.8 2.1 5.8
Zinc (%) 2.8 0.6 1.8 1.9
Sales Data
Metal Sales
Silver (in thousands of ounce) 3,484 275 494 4,253
Gold (in thousands of ounce) 1.1 0.9 0.2 2.2
Lead (in thousands of pound) 42,578 4,423 7,625 54,626
Zinc (in thousands of pound) 10,834 435 1,822 13,091
Metal Sales
Silver ($) 57,197 4,582 8,171 69,950
Gold ($) 901 803 158 1,862
Lead ($) 34,792 3,547 6,225 44,564
Zinc ($) 7,060 264 1,205 8,529
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99,950 9,196 15,759 124,905
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Average Selling Price, Net of Value
Added Tax and Smelter Charges
Silver ($ per ounce) 16.42 16.68 16.54 16.46
Gold ($ per ounce) 844.03 923.83 834.28 889.71
Lead ($ per pound) 0.82 0.80 0.82 0.81
Zinc ($ per pound) 0.65 0.61 0.66 0.65
SILVERCORP METALS INC.
Mining Data
---------------------------------------------------------------------------
(Expressed in thousands of U.S. dollars, except for mining data figures)
Q3 Fiscal 2010 Nine months ended December 31, 2009
------------------------------------
YING HPG&LM TLP Total
------------------------------------
Production Data
Mine Data
Ore Mined (tonne)
Direct Smelting Ore (tonne) 10,680 216 8 10,904
Stockpiled Ore (tonne) 244,899 42,193 27,724 314,816
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255,579 42,409 27,732 325,720
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Run of Mine Ore (tonne)
Direct Smelting Ore (tonne) 10,680 217 8 10,904
Ore Milled (tonne) 228,763 31,461 2,844 263,070
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239,443 31,678 2,852 273,974
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Mining cost per tonne of ore mined ($) 54.83 56.90 64.43 55.91
Cash mining cost per tonne of ore
mined ($) 44.77 54.43 61.53 47.45
Non cash mining cost per tonne of
ore mined ($) 10.06 2.46 2.90 8.46
Unit shipping costs($) 3.53 3.08 2.88 3.42
Milling cost per tonne of ore
milled ($) 11.24 11.76 34.40 11.53
Cash milling cost per tonne of ore
milled ($) 10.23 10.73 26.01 10.45
Non cash milling cost per tonne of
ore milled 1.00 1.03 8.38 1.08
Average Production Cost
Silver ($ per ounce) 2.54 5.11 3.16 2.72
Gold ($ per ounce) 101.90 279.58 - 140.05
Lead ($ per pound) 0.15 0.28 0.20 0.16
Zinc ($ per pound) 0.12 0.21 - 0.13
Total production cost per ounce of
Silver ($) (5.70) (4.29) (3.00) (5.61)
Total cash cost per ounce of Silver
($) (6.51) (4.79) (3.25) (6.40)
Total Recovery of the Run of Mine Ore
Silver (%) 91.3 86.4 85.4 92.6
Lead (%) 95.4 92.0 90.1 96.4
Zinc (%) 75.8 72.3 - 75.7
Head Grades of Run of Mine Ore
Silver (gram/tonne) 476.3 195.0 91.7 439.5
Lead (%) 8.7 5.4 4.8 8.4
Zinc (%) 3.2 0.8 - 2.9
Sales Data
Metal Sales
Silver (in thousands of ounce) 3,327 203 15 3,545
Gold (in thousands of ounce) 0.4 0.7 0.0 1.1
Lead (in thousands of pound) 43,428 3,824 201 47,453
Zinc (in thousands of pound) 11,324 669 - 11,993
Metal Sales
Silver ($) 37,500 2,443 160 40,103
Gold ($) 190 474 1 665
Lead ($) 28,952 2,504 134 31,590
Zinc ($) 6,244 338 - 6,582
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72,886 5,759 295 78,940
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Average Selling Price, Net of Value
Added Tax and Smelter Charges
Silver ($ per ounce) 11.27 12.03 10.39 11.31
Gold ($ per ounce) 452.38 658.33 - 583.33
Lead ($ per pound) 0.67 0.65 0.67 0.67
Zinc ($ per pound) 0.55 0.51 - 0.55
Contacts:
Silvercorp Metals Inc.
Rui Feng
Chairman & CEO
(604) 669-9397 or Toll Free: 1(888) 224-1881
Silvercorp Metals Inc.
Lorne Waldman
Corporate Secretary
(604) 669-9397 or Toll Free: 1(888) 224-1881
(604) 669-9387 (FAX)
info@silvercorp.ca
www.silvercorp.ca