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Pan American Silver joins Voluntary Principles on Security and Human Rights


Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX: SVM) (NYSE American: SVM) reported its financial and operating results for the fourth quarter and twelve months ended March 31, 2022 (“Fiscal 2022”). All amounts are expressed in US Dollars, and figures may not add due to rounding.

FISCAL YEAR 2022 HIGHLIGHTS

  • Mined 996,280 tonnes of ore and milled 1,002,335 tonnes of ore, up 3% and 4% compared to the prior year.
  • Sold approximately 6.3 million ounces of silver, 3,400 ounces of gold, 63.6 million pounds of lead, and 26.8 million pounds of zinc, representing decreases of 1%, 28%, 5% and 4% in silver, gold, lead and zinc sold, compared to the prior year. Gold sales in the prior year included one-time sales of 1,200 ounces from the remaining concentrate inventory produced at the BYP mine before it was placed on care and maintenance in 2014.
  • Revenue of $217.9 million , up 13% compared to $192.1 million in the prior year.
  • Net income attributable to equity holders of $30.6 million , or $0.17 per share, compared to $46.4 million , or $0.27 per share in the prior year.
  • Adjusted earnings attributable to equity holders of $52.4 million , or $0.30 per share, compared to $49.8 million , or $0.28 per share in the prior year. The adjustments were made to remove impacts from non-recurring items, share-based compensation, foreign exchange gain/loss, impairment adjustments and reversals, gain/loss on equity investments and the share of associates’ operating results.
  • Cash flow from operations of $107.4 million , up 25% or $21.5 million compared to $85.9 million in the prior year.
  • Cash cost per ounce of silver, net of by-product credits, of negative $1.29 compared to negative $1.80 in the prior year.
  • All-in sustaining cost per ounce of silver, net of by-product credits, of $8.77 , compared to $7.49 in the prior year.
  • Paid $4.4 million of dividends to the Company’s shareholders.
  • Acquired the Kuanping silver-lead-zinc-gold project in China for $13.1 million .
  • Strong balance sheet with $212.9 million in cash and cash equivalents and short-term investments, up $13.8 million or 7% compared to $199.1 million as at March 31, 2021 . This does not include the investments in associates and equity investment in other companies, having a total market value of $164.3 million as at March 31, 2022 ( $212.1 million as at March 31, 2021 ).

HIGHLIGHTS FOR Q4 FISCAL 2022

  • Mined 180,505 tonnes of ore and milled 182,670 tonnes of ore, up 11% and 1%, respectively, compared to the prior year quarter.
  • Sold approximately 1.2 million ounces of silver, 500 ounces of gold, 12.3 million pounds of lead, and 4.3 million pounds of zinc, up 11% and 13%, respectively, in silver and lead sold compared to the prior year quarter, and down 29% and 5%, respectively, in gold and zinc sold compared to the prior year quarter.
  • Revenue of $41.6 million , up 16% or $5.9 million compared to $35.7 million in the prior year quarter.
  • Net income attributable to equity holders of $4.0 million , or $0.02 per share, compared to $7.0 million , or $0.04 per share, in the prior year quarter.
  • Adjusted earnings attributable to equity holders of $9.5 million , or $0.05 per share, compared to $11.0 million , or $0.06 per share, in the prior year quarter.
  • Cash flow from operations of $11.4 million , up 411% or $9.2 million compared to $2.2 million in the prior year quarter.
  • Cash cost per ounces of silver, net of by-product credits, of negative $0.54 compared to negative $0.39 in the prior year quarter.
  • All-in sustaining cost per ounce of silver, net of by-product credits, of $12.60 , compared to $12.55 in the prior year quarter.

CONSOLIDATED FINANCIAL RESULTS

Three months ended March 31,

Year ended March 31,

2022

2021

Changes

2022

2021

Changes

Financial

Revenue (in thousands of $)

$       41,590

$    35,732

16%

$    217,923

$    192,105

13%

Mine operating earnings (in thousands of $)

13,709

13,404

2%

84,301

84,162

0%

Net income attributable to equity holders

3,966

7,021

-44%

30,634

46,376

-34%

Earnings per share – basic ($/share)

0.02

0.04

-50%

0.17

0.27

-37%

Adjusted earnings attributable to equity holders

9,496

10,960

-13%

52,427

49,798

5%

Adjusted earning per share – basic ($/share)

0.05

0.06

-17%

0.30

0.28

7%

Net cash generated from operating activities (in thousands of $)

11,406

2,231

411%

107,378

85,912

25%

Capitalized expenditures (in thousands of $)

9,831

6,996

41%

53,991

45,556

19%

Cash and cash equivalents and short-term investments (in thousands of $)

212,925

199,092

7%

212,925

199,092

7%

Working capital (in thousands of $)

186,270

184,014

1%

186,270

184,014

1%

Metals sold

Silver (in thousands of ounces)

1,173

1,056

11%

6,265

6,315

-1%

Gold (in thousands of ounces)

0.5

0.7

-29%

3.4

4.7

-28%

Lead (in thousands of pounds)

12,279

10,876

13%

63,563

67,118

-5%

Zinc (in thousands of pounds)

4,340

4,580

-5%

26,809

27,914

-4%

Average Selling Price, Net of Value Added Tax and Smelter Charges

Silver ($/ounce)

19.38

20.11

-4%

19.36

17.61

10%

Gold ($/ounce)

1,475

1,437

3%

1,495

1,430

5%

Lead ($/pound)

0.93

0.81

15%

0.90

0.75

20%

Zinc ($/pound)

1.22

0.98

24%

1.08

0.78

38%

1. Fiscal 2022 Financial Results

Net income attributable to equity holders of the Company in Fiscal 2022 was $30.6 million or $0 .17 per share, compared to $46.4 million or $0 .27 per share in the year ended March 31, 2021 (“Fiscal 2021”).

In Fiscal 2022, the Company’s consolidated financial results were mainly impacted by i) an increase of 10%, 5%, 20% and 38%, respectively, in the realized selling prices for silver, gold, lead and zinc; offset by ii) a 1%, 28%, 5% and 4% decrease in silver, gold, lead and zinc sold; iii) a 17% increase in cash production costs per tonne, and iv) an impairment charge of $10.6 million against bond investments and a $3.5 million loss on equity investments in Fiscal 2022 while an impairment charge of $1.4 million against bond investments and a gain of $7.7 million on equity investments was recorded in Fiscal 2021.

Revenue in Fiscal 2022 was $217.9 million , up 13% or $25.8 million compared to $192.1 million in Fiscal 2021. The increase was mainly due to an increase of $29.9 million arising from the increase in the net realized silver, gold, lead and zinc selling prices; offset by a decrease of $7.8 million arising from the decrease in the quantities of silver, gold, lead and zinc sold. Revenues from silver, gold, and base metals were $121.3 million , $5.1 million , and $91.6 million , respectively, compared to $111.2 million , $6.7 million , and $74.2 million in Fiscal 2021. Revenue from the Ying Mining District was $176.8 million , up 12% compared to $157.3 million in Fiscal 2021. Revenue from the GC Mine was $41.2 million , up 24% compared to $33.3 million in Fiscal 2021. Gold sales in Fiscal 2021 included $1.5 million from sales of remaining gold concentrate inventory at the BYP mine before it was placed on care and maintenance in 2014.

Income from mine operations in Fiscal 2022 was $84.3 million , compared to $84.2 million in Fiscal 2021. Income from mine operations at the Ying Mining District was $70.0 million , down 6% compared to $74.2 million in Fiscal 2021. Income from mine operations at the GC Mine was $14.8 million , up 52% compared to $9.8 million in Fiscal 2021.

Cash flow provided by operating activities in Fiscal 2022 was $107.4 million , up 25% or $21.5 million , compared to $85.9 million in Fiscal 2021.

The Company ended the fiscal year with $212.9 million in cash, cash equivalents and short-term investments, up 7% or $13.8 million , compared to $199.1 million as at March 31, 2021 .

Working capital as at March 31, 2022 was $186.3 million , up 1% or $2.3 million , compared to $184.0 million as at March 31, 2021 .

2. Q4 Fiscal 2022 Financial Results

Net income attributable to equity holders of the Company in Q4 Fiscal 2022 was $4.0 million or $0.2 per share, compared to $7.0 million or $0.04 per share in the three months ended March 31, 2021 (“Q4 Fiscal 2021”).

Compared to the prior year quarter, the Company’s consolidated financial results in Q4 Fiscal 2022 were mainly impacted by i) an increase of 3%, 15%, and 24%, respectively, in the realized selling prices for gold, lead and zinc; ii) an 11% and 13% increase in silver and lead sold; offset by iii) a 4% decrease in the realized selling price for silver;  iv) a 29% and 5% decrease in gold and zinc sold; v) an 8% increase in cash production costs per tonne; and vi) a foreign exchange loss of $3.2 million .

Revenue in Q4 Fiscal 2022 was $41.6 million , up 16% or $5.7 million , compared to $35.9 million in the same prior year period. The increase was mainly due to i) an increase of $3.5 million arising from more silver and lead sold; and ii) an increase of $2.4 million arising from the increase in the net realized selling price for lead and zinc. Silver, gold and base metals sales represented $22.7 million , $0.9 million , and $18.0 million , respectively, compared to silver, gold and base metals sales of $21.2 million , $1.0 million and $13.6 million , respectively, in the same prior year period.

Income from mine operations in Q4 Fiscal 2022 was $13.7 million , up 2% compared to $13.4 million in Q4 Fiscal 2021. Income from mine operations at the Ying Mining District was $11.9 million , compared to $11.9 million in Q4 Fiscal 2021, while GC Mine was $2.0 million , up 16% compared to $1.7 million in Q4 Fiscal 2021.

Cash flows provided by operating activities in Q4 Fiscal 2022 were $11.4 million , compared to $2.2 million in Q4 Fiscal 2021. Before changes in non-cash operating working capital, cash flow provided by operating activities In Q4 Fiscal 2022 was $14.0 million , compared to $11.9 million in Q4 Fiscal 2021.

CONSOLIDATED OPERATIONAL RESULTS

Three months ended March 31,

Year ended March 31,

2022

2021

Changes

2022

2021

Changes

Ore Production (tonne)

Ore mined

180,505

163,072

11%

996,280

964,925

3%

Ore milled

182,670

180,674

1%

1,002,335

967,581

4%

Metal Production

Silver (in thousands of ounces)

1,146

1,195

-4%

6,149

6,331

-3%

Gold (in thousands of ounces)

0.5

0.3

67%

3.4

3.5

-3%

Lead (in thousands of pounds)

11,962

12,156

-2%

64,431

68,430

-6%

Zinc (in thousands of pounds)

4,101

4,672

-12%

26,812

28,011

-4%

Cash Costs

Cash cost per ounce of silver, net of by-product credits ($)

(0.54)

(0.39)

-38%

(1.29)

(1.80)

28%

All-in sustaining cost per ounce of silver, net of by-product credits ($)

12.60

12.55

0%

8.77

7.49

17%

Cash production cost per tonne of ore processed ($)

92.78

85.70

8%

84.85

72.71

17%

All-in sustaining cost per tonne of ore processed ($)

171.56

156.36

10%

141.54

128.20

10%

1. Fiscal 2022 Operational Results

In Fiscal 2022, on a consolidated basis, the Company mined 996,280 tonnes of ore, up 3% or 31,355 tonnes, compared to 964,925 tonnes in Fiscal 2021. Ore milled in Fiscal 2022 was 1,002,335 tonnes, up 4% or 34,754 tonnes, compared to 967,581 tonnes in Fiscal 2021.

In Fiscal 2022, the Company sold approximately 6.3 million ounces of silver, 3,400 ounces of gold, 63.6 million pounds of lead, and 26.8 million pounds of zinc, representing decreases of 1%, 28%, 5% and 4% respectively, in silver, gold, lead and zinc sold. Gold sold in Fiscal 2021 included one-time sales of 1,200 ounces from pre 2014 concentrate inventories at the BYP Mine.

Compared to Fiscal 2021, the Company’s production costs in Fiscal 2022 were mainly impacted by i) an overall 14.5% increase in mining contractors’ fee rate at the Ying Mining District;  ii) an annual average 5% appreciation of the Chinese yuan against the US dollar, resulting in higher costs presented in US dollars; iii) an average 7% increase in employees’ pay rates; iv) an annual average 12% increase in electricity prices; and iv) the contribution rate paid for employees’ social welfare funds in China returning to the normal rate from a reduced rate granted by the Chinese government in Fiscal 2021 due to Covid-19.

In Fiscal 2022, the consolidated cash production cost per tonne of ore processed was $84.85 , up 17% compared to $72.71 in Fiscal 2021. The consolidated cash mining cost was $68.90 per tonne, up 16% compared to $59.44 in Fiscal 2021. The consolidated cash milling cost was $13.43 per tonne, up 25% compared to $10.73 in Fiscal 2021.

In Fiscal 2022, the consolidated all-in sustaining production cost per tonne of ore processed was $141.54 , up 10% compared to $128.20 in Fiscal 2021, but within the Company’s annual guidance.

In Fiscal 2022, the consolidated cash cost per ounce of silver, net of by-product credits, was negative $1.29 , compared to negative $1.80 in Fiscal 2021. The increase was mainly due to the increase in per tonne cash production costs, offset by an increase of $2.61 in by-product credits per ounce of silver. The consolidated all-in sustaining cost per ounce of silver, net of by-product credits, was $8.77 , compared to $7.49 in Fiscal 2021.

In Fiscal 2022, on a consolidated basis, a total of 426,128 metres or $20.7 million worth of diamond drilling were completed (Fiscal 2021 – 254,900 metres or $8.7 million ), of which approximately 276,450 metres or $7.2 million worth of underground drilling were expensed as part of mining costs (Fiscal 2021 – 196,320 metres or $5.0 million ) and approximately 149,678 metres or $13.5 million worth of drilling were capitalized (Fiscal 2021 – 58,580 metres or $3.7 million ). In addition, approximately 31,301 metres or $11.6 million worth of preparation tunnelling were completed and expensed as part of mining costs (Fiscal 2021 – 34,637 metres or $8.9 million ), and approximately 74,062 metres or $31.0 million worth of tunnels, raises, ramps and declines were completed and capitalized (Fiscal 2021 – 85,221metres or $31.5 million ).

2. Q4 Fiscal 2022 Operational Results

In Q4 Fiscal 2022, the Company mined 180,505 tonnes of ore, up 11% or 17,433 tonnes, compared to 163,072 tonnes in Q4 Fiscal 2021. Ore milled in Q4 Fiscal 2022 was 182,670 tonnes, up 1% or 1,996 tonnes, compared to 180,674 tonnes in Q4 Fiscal 2021.

In Q4 Fiscal 2022, the Company sold approximately 1.2 million ounces of silver, 500 ounces of gold, 12.3 million pounds of lead, and 4.3 million pounds of zinc, representing increases of 11% and 13%, respectively, in silver and lead sold, and decreases of 29% and 5%, respectively, in gold and zinc sold, compared to approximately 1.1 million ounces of silver, 700 ounces of gold, 10.9 million pounds of lead, and 4.6 million pounds of zinc sold in Q4 Fiscal 2021.

In Q4 Fiscal 2022, the consolidated cash mining cost was $73.52 per tonne, compared to $70.56 in Q4 Fiscal 2021. The consolidated cash milling cost was $16.45 per tonne, compared to $12.66 per tonne in Q4 Fiscal 2021. The increase was mainly due to the same factors for the annual results.

Correspondingly, the consolidated cash production cost per tonne of ore processed for Q4 Fiscal 2022 was $92.78 , up 8% compared to $85.70 in Q4 Fiscal 2021. The all-in sustaining production cost per tonne of ore processed was $171.56 , up 10% compared to $156.36 in Q4 Fiscal 2021.

In Q4 Fiscal 2022, the consolidated cash cost per ounce of silver, net of by-product credits, was negative $0.54 , compared to negative $0.39 in Q4 Fiscal 2021. The consolidated all-in sustaining cost per ounce of silver, net of by-product credits was $12.60 compared to $12.55 in Q4 Fiscal 2021.

In Q4 Fiscal 2022, on a consolidated basis, approximately 66,139 metres or $2.4 million worth of diamond drilling (Q4 Fiscal 2021– 49,459 metres or $1.6 million ) were completed, of which approximately 50,384 metres or $1.2 million worth of underground drilling were expensed as part of mining costs (Q4 Fiscal 2021– 41,752 metres or $0.8 million ) and approximately 15,755 metres or $1.3 million worth of drilling were capitalized (Q4 Fiscal 2021– 7,887 metres or $0.8 million ). In addition, approximately 5,688 metres or $2.1 million worth of preparation tunnelling were completed and expensed as part of mining costs (Q4 Fiscal 2021– 7,015 metres or $1.5 million ), and approximately 13,340 metres or $5.9 million worth of tunnels, raises, ramps and declines were completed and capitalized (Q4 Fiscal 2021– 10,803 metres or $4.7 million ).

INDIVIDAL MINE OPERATING PERFORMANCE

Ying Mining District

Q4 2022

Q3 2022

Q2 2022

Q1 2022

Q4 2021

Year ended March 31,

March 31, 2022

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

2022

2021

Ore Production (tonne)

Ore mined

130,612

200,946

206,933

142,907

112,561

681,398

650,025

Ore milled

131,731

214,982

182,173

155,407

131,725

684,293

651,402

Head grades

Silver (gram/tonne)

271

258

283

279

280

272

290

Lead (%)

3.9

3.7

4.0

4.2

3.9

3.9

4.3

Zinc (%)

0.8

0.8

0.7

0.8

0.8

0.8

0.8

Recovery rates

Silver (%)

95.2

95.1

95.4

94.7

93.7

95.1

94.2

Lead (%)

96.1

95.2

95.5

95.7

95.1

95.6

96.0

Zinc (%)

57.4

64.0

56.0

59.7

65.0

59.7

62.4

Cash Costs

Cash cost per ounce of Silver, net of by-product credits ($)

1.21

1.19

0.71

0.80

1.20

0.96

(0.39)

All-in sustaining cost per ounce of silver, net of by-product credits ($)

10.76

8.36

6.88

6.54

10.00

7.93

6.09

Cash production cost per tonne of ore processed ($)

102.49

99.24

96.59

92.79

98.13

97.76

83.01

All-in sustaining cost per tonne of ore processed ($)

172.63

143.72

141.26

138.55

155.14

147.52

132.54

Metal Production

Silver (in thousands of ounces)

1,062

1,647

1,517

1,283

1,083

5,509

5,615

Gold (in thousands of ounces)

0.5

1.1

0.8

1.0

0.3

3.4

3.5

Lead (in thousands of pounds)

10,542

16,392

14,671

13,278

10,504

54,883

57,886

Zinc (in thousands of pounds)

1,317

2,347

1,584

1,519

1,496

6,767

6,916

In Fiscal 2022, a total of 351,458 metres or $15.6 million worth of diamond drilling were completed (Fiscal 2021 – 208,904 metres or $6.9 million ), of which approximately 216,068 metres or $5.0 million worth of underground drilling were expensed as part of mining costs (Fiscal 2021 – 150,324 metres or $3.2 million ) and approximately 135,390 metres or $10.6 million worth of drilling were capitalized (Fiscal 2021 – 58,580 metres or $3.7 million ). In addition, approximately 25,134 metres or $9.9 million worth of preparation tunnelling were completed and expensed as part of mining costs (Fiscal 2021 – 22,918 metres or $6.7 million ), and approximately 60,311 metres or $26.7 million worth of horizontal tunnels, raises, ramps, and declines were completed and capitalized (Fiscal 2021 – 73,350 metres or $27.4 million ).

GC Mine

Q4 2022

Q3 2022

Q2 2022

Q1 2021

Q4 2021

Year ended March 31,

March 31, 2021

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

2022

2021

Ore Production (tonne)

Ore mined

49,893

91,126

85,535

88,328

50,511

314,882

314,900

Ore milled

50,939

89,790

89,643

87,670

48,949

318,042

316,179

Head grades

Silver (gram/tonne)

62

78

73

80

87

75

85

Lead (%)

1.4

1.5

1.7

1.5

1.7

1.5

1.7

Zinc (%)

2.8

3.2

3.3

3.3

3.3

3.2

3.4

Recovery rates

Silver (%)

82.4

83.5

84.4

84.1

81.9

83.8

82.5

Lead (%)

88.7

89.0

89.5

89.3

89.7

89.2

89.6

Zinc (%)

89.8

89.8

89.6

89.3

88.2

89.6

88.2

Cash Costs

Cash cost per ounce of Silver, net of by-product credits ($)

(16.59)

(25.84)

(22.51)

(17.96)

(12.80)

(20.91)

(11.48)

All-in sustaining…



Read More: Pan American Silver joins Voluntary Principles on Security and Human Rights

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