Big Gold Inc. press release
Silvercorp Reports Q2 Results: Net Income of $11.1 Million, $0.07 Per Share
CSE - Canadian National Stock Exchange · Gold · Silver · Copper · Zinc · Canada
Canada NewsWire
VANCOUVER, Nov. 8, 2017
Trading Symbol: TSX: SVM NYSE AMERICAN: SVM
VANCOUVER, Nov. 8, 2017/CNW/ -Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX: SVM) (NYSE American: SVM) reported its financial and operating results for the second quarter ended September 30, 2017. All amounts are expressed in US Dollars.
SECOND QUARTER HIGHLIGHTS
Net income attributable to equity shareholders of $11.1 million, or $0.07per share, compared to net income attributable to equity shareholders of $12.4 million, or $0.07per share in the prior year quarter; Gross margin of 54% compared with 56% in the prior year quarter; Sales of $47.5 million, up 3% compared to $46.3 millionin the prior year quarter; Silver, lead, and zinc metals sold amounted to approximately 1.6 million ounces silver, 16.9 million pounds lead, and 5.6 million pounds zinc, compared to 1.8 million ounces silver, 19.9 million pounds lead, and 5.9 million pounds zinc in the prior year quarter; Head grades were 294 grams per tonne ("g/t") for silver, 4.3% for lead, and 0.8% for zinc at the Ying Mining District, compared to 302 g/t for silver, 4.9% for lead and 1.1% for zinc in the prior year quarter; Total and cash mining costs per tonne ore1of $70.58and $52.77, respectively, compared to $64.67and $43.09in the prior year quarter; Cash cost per ounce of silver1, net of by-product credits, of negative $5.16, compared to negative $3.05in the prior year quarter; All-in sustaining cost per ounce of silver1, net of by-product credits, of $2.26, compared to $3.15in the prior year quarter; Increased ownership in New Pacific Metals Corp. ("NUAG") from 16.1% to 31.8% for $20.0 million; and, Ended the quarter with $98.6 millionin cash and cash equivalents and short-term investments, an increase of $2.2 millionor 2% compared to $96.5 millionas at March 31, 2017.
| _ | | 1_Non IFRS measure, see section 10 of the corresponding management's discussion and analysis for reconciliation_ |
FINANCIALS
Net income attributable to equity shareholders of the Companyin Q2 Fiscal 2018 was $11.1 million, or $0.07per share, compared to $12.4 million, or $0.07per share in Q2 Fiscal 2017.
The Company's financial results in Q2 Fiscal 2018 were mainly impacted by the following: i) an increase of 48% and 58% in the realized selling prices for lead and zinc, compared to the prior year quarter, ii) a 7% decrease in the realized selling price for silver, iii) less metals sold; iv) higher per tonne production costs, and iv) a $1.1 millionforeign exchange loss recorded in the current quarter.
Sales in Q2 Fiscal 2018 were $47.5 million, up 3% compared to $46.3 millionin the same quarter last year. Silver and gold sales represented $22.6 millionand $0.9 million, respectively, while base metals represented $24.1 millionof total sales, compared to silver, gold and base metals sales of $27.0 million, $1.1 million, and $18.2 million, respectively, in the prior year quarter.
Cost of salesin Q2 Fiscal 2018 was $21.9 millioncompared to $20.5 millionin Q2 Fiscal 2017. The cost of sales included $16.2 million(Q2 Fiscal 2017 - $13.8 million) cash production costs, $1.3 millionmineral resources tax (Q2 Fiscal 2017 - $1.0 million), and $4.4 million(Q2 Fiscal 2017 - $5.7 million) depreciation and amortization charges. The increase of cash production costs was mainly due to higher per tonne cash production costs recorded in current quarter while the increase of mineral resources tax was due to higher sales achieved in Q2 Fiscal 2018.
Gross profitmargin in Q2 Fiscal 2018 was 54%, compared to 56% in Q2 Fiscal 2017. Ying Mining District's gross margin was 56% compared to a 61% gross profit margin in the prior year quarter. GC Mine's profit margin was 40% compared to a 38% gross profit margin in the prior year quarter.
General andadministrative expensesin Q2 Fiscal 2018 were $4.5 million, an increase of 8% or $0.4 million, compared to $4.1 millionin Q2 Fiscal 2017.
Income tax expensesin Q2 Fiscal 2018 were $5.3 millioncompared to $5.9 millionin Q2 Fiscal 2017. The income tax expense recorded in Q2 Fiscal 2017 included current income tax expense of $4.5 million(Q2 Fiscal 2016 – $4.9 million) and deferred income tax expense of $0.7 million(Q2 Fiscal 2016 – $1.0 million).
Cash flows provided by operating activitiesin Q2 Fiscal 2018 were $20.7 million, compared to $27.0 millionin the prior year quarter. Before changes in non-cash operating working capital, cash flows provided by operating activities in Q2 Fiscal 2018 were $21.7 million, a decrease of $3.2 millionor 13%, compared to $24.9 millionin the prior year quarter. Free cash flow in Q2 Fiscal 2018 was $14.2 million, compared to $20.6 millionin the prior year quarter.
For the six months ended September 30, 2017, net income attributable to the shareholders of the Company was $22.1 millionor $0.13per share, up 23% compared to $17.1 millionor $0.10per share in the same prior year period; sales were $87.2 million, up 7% from $81.6 millionin the same prior year period; and cash flow from operating activities and free cash flow were $37.6 millionand $23.9 million, respectively, compared to $47.2 millionand $33.4 millionin the same prior year period.
Working capitalas at September 30, 2017was $77.6 million, an increase of $6.9 millionor 10%, compared to $70.7 millionworking capital as at March 31, 2017.
OPERATIONS AND DEVELOPMENT
In Q2 Fiscal 2018, the Company's production was affected by power downtime due to power grid upgrading works, government inspections and explosive supply limitations brought in as a public safety measure by local governments in advance of the 19thNational Congress of the Communist Party of China("CPC"), and the typhoon conditions in South China. On a consolidated basis, the Company mined 239,106 tonnes of ore in Q2 Fiscal 2018, a decrease of 6% or 14,780 tonnes compared to 253,886 tonnes in Q2 Fiscal 2017. Ore mined at the Ying Mining District decreased by 3% or 5,900 tonnes, and ore mined at the GC Mine decreased by 12% or 8,880 tonnes.
In Q2 Fiscal 2018, the Company sold approximately 1.6 million ounces of silver, 800 ounces of gold, 16.9 million pounds of lead, and 5.6 million pounds of zinc, compared to 1.8 million ounces of silver, 1,000 ounces of gold, 19.9 million pounds of lead, and 5.9 million pounds of zinc, respectively, in Q2 Fiscal 2017. The decrease of metals sold was mainly due to less production and lower head grade achieved at the Ying Mining District.
In Q2 Fiscal 2018, the consolidated total mining costs and cash mining costs were $70.58and $52.77per tonne, compared to $64.67and $43.09per tonne, respectively, in Q2 Fiscal 2017. The increase in cash mining costs were mainly due to i) $0.6 millionincrease in raw material costs mainly arising from the increasing prices in copper and steel related material, such as cable, rail and ground support products, ii) $1.0 millionincrease in mining preparation costs resulting from more underground drilling and tunnelling expensed in the current quarter, and iii) lower production output resulting in higher per tonne overhead costs allocation.
The consolidated total production costs and cash costs per ounce of silver, net of by-product credits, were negative $2.43and negative $5.16in Q2 Fiscal 2018 compared to $0.10and negative $3.05respectively, in the prior year quarter. The overall decrease in cash cost per ounce of silver, net of by-product credits, is mainly due to a 27% increase in by-product credits, mainly arising from 48% and 58% increase in lead and zinc net realized selling prices, offset by 15% and 5% decrease in lead and zinc metals sold. Sales from lead and zinc accounted for 50% of the total sales and amounted to $23.9 million, an increase of $5.7 million, compared to $18.2 millionin the prior year quarter.
In Q2 Fiscal 2018, the consolidated all-in sustaining costs per ounce of silver, net of by-product credits, is $2.26compared to $3.15in Q2 Fiscal 2017. The decrease was mainly due to an increase of $5.7 millionin by-product credits offset by a $0.6 millionincrease in sustaining capital expenditures and the increase of per tonne cash production costs as discussed above.
For the six months ended September 30, 2017, approximately 3.1 million ounces of silver, 1,700 ounces of gold, 32.8 million pounds of lead, and 10.6 million pounds of zinc were sold compared to 3.5 million ounces of silver, 2,000 ounces of gold, 36.7 million of lead, and 11.1 million pounds of zinc sold in the same prior year period; the consolidated total mining and cash mining costs were $69.39and $51.57per tonne, 4% and 14% increase compared to $66.61and $45.09per tonne in the same prior year period while the consolidated total milling costs and cash milling costs reduced by 5% and 6% to $12.45and $10.13, respectively, compared to $13.11and $10.79per tonne in the same prior year period; and, the consolidated cash production costs and all-in sustaining costs per ounce of silver, net of by-product credits, were negative $4.51and $3.44compared to negative $1.68and $5.01, respectively, in the same prior year period.
1. Ying Mining District, Henan Province, China
| | | | | | | | | | | | Operational results - Ying Mining District | | | | | | | | | | | | Q2 2018 September 30, 2017 | Q1 2018
June 30, 2017 | Q4 2017
March 31, 2017 | Q3 2017
December 31, 2016 | Q2 2017
September 30, 2016 | | Six months ended September 30, | | | | | | 2017 | 2016 | | | | | | | | Ore Mined (tonne) | 173,294 | 160,408 | 112,755 | 171,303 | 179,194 | | 333,701 | 352,702 | | | Ore Milled (tonne) | 173,946 | 164,959 | 108,051 | 182,259 | 180,154 | | 338,904 | 347,901 | | | Head Grades | | | | | | | | | | | | Silver (gram/tonne) | 294 | 304 | 298 | 303 | 302 | | 299 | 305 | | | Lead(%) | 4.3 | 4.6 | 4.8 | 4.8 | 4.9 | | 4.4 | 4.7 | | | Zinc (%) | 0.8 | 0.8 | 0.8 | 0.8 | 1.1 | | 0.8 | 1.1 | | Recoveries | | | | | | | | | | | | Silver(%) | 95.6 | 95.8 | 96.6 | 95.1 | 95.5 | | 95.7 | 95.6 | | | Lead(%) | 96.2 | 96.3 | 95.6 | 96.7 | 96.3 | | 96.3 | 96.3 | | | Zinc (%) | 50.7 | 45.8 | 46.2 | 47.5 | 42.9 | | 48.4 | 45.5 | | Metal Sales | | | | | | | | | | | | Silver (in thousands of ounce) | 1,472 | 1,324 | 1,255 | 1,555 | 1,630 | | 2,796 | 3,120 | | | Gold (in thousands of ounce) | 0.8 | 0.9 | 0.7 | 0.7 | 1.0 | | 1.7 | 1.9 | | | Lead (in thousands of pound) | 15,279 | 13,765 | 13,520 | 17,269 | 17,768 | | 29,044 | 32,629 | | | Zinc (in thousands of pound) | 2,269 | 755 | 1,033 | 1,210 | 1,785 | | 3,024 | 3,605 | | Cash mining cost ($ per tonne) | 59.67 | 54.78 | 49.99 | 55.21 | 49.13 | | 57.32 | 50.70 | | | Total mining cost ($ per tonne) | 81.20 | 76.67 | 53.50 | 80.53 | 76.30 | | 79.03 | 77.44 | | | Cash milling cost ($ per tonne) | 8.50 | 8.07 | 10.43 | 9.09 | 8.85 | | 8.29 | 9.44 | | | Total milling cost ($ per tonne) | 10.45 | 10.10 | 13.60 | 11.03 | 10.86 | | 10.28 | 11.53 | | | Cash production cost ($ per tonne) | 71.85 | 66.93 | 64.34 | 68.22 | 61.79 | | 69.47 | 63.98 | | | | | | | | | | | | | | Cash cost per ounce of silver ($) | (4.27) | (2.97) | (3.73) | (4.60) | (2.68) | | (3.79) | (1.44) | | | All-in sustaining cost per ounce of silver ($) | 1.08 | 3.66 | 0.74 | 1.34 | 2.33 | | 2.30 | 3.99 | |
In Q2 Fiscal 2018, the total ore mined at the Ying Mining District was 173,294 tonnes, a decrease of 3%, compared to 179,194 tonnes mined in the prior year quarter. Approximately 2,900 tonnes of ore production was affected by several days of power downtime due to power grid upgrades by State Grid Corporation, and approximately 3,000 tonnes production was affected by government inspections and explosive supply limitation brought in as a safety measure by the local government in advance of the 19thCPC National Congress. As a further public safety measure during the 19thCPC National Congress in October 2017, mining activities at the Ying Mining District were temporary suspended for five days as requested by the local government, which has impacted ore production by approximately 10,000 tonnes in the third quarter of Fiscal 2018.
Correspondingly, ore milled in Q2 Fiscal 2018 decreased by 3% to 173,946 tonnes from 180,154 tonnes in the prior year quarter. Head grades were 294 grams per ton ("g/t") for silver, 4.3% for lead, and 0.8% for zinc, compared to 302 g/t for silver, 4.9% for lead and 1.1% for zinc in the prior year quarter. The decrease of head grades is mainly due to the average geological grades of ore mined in the current quarter being lower than the prior year quarter.
In Q2 Fiscal 2018, the Ying Mining District sold approximately 1.5 million ounces silver, 15.3 million pounds lead, and 2.3 million pounds zinc, compared to 1.6 million ounces silver, 17.8 million pounds lead, and 1.8 million pounds of zinc in the prior year quarter. The decrease of metals sold at the Ying Mining District was mainly due to a 3% decrease of ore milled and lower head grades achieved in the current quarter.
Total and cash mining costs per tonne at the Ying Mining District in Q2 Fiscal 2018 were $81.20and $59.67per tonne, respectively, compared to $76.30and $49.13per tonne in the prior year quarter. The increase in cash mining costs were mainly due to i) $0.6 millionincrease in raw material costs mainly arising from the increasing prices in copper and steel related material, ii) $0.7 millionincrease in mining preparation costs resulting from more underground drilling and tunnelling expensed in the current quarter, and iii) lower production output resulting in higher per tonne overhead costs allocation. Total and cash milling costs per tonne at the Ying Mining District in Q2 Fiscal 2018 were $10.45and $8.50, a decrease of 4%, compared to $10.86and $8.85in Q2 Fiscal 2017.
Cash cost per ounce of silver, net of by-product credits, in Q2 Fiscal 2018 at the Ying Mining District, was negative $4.27compared to negative $2.68in the prior year quarter. The improvement was mainly due to a $4.2 millionor 28% increase in by-product credits offset by the 16% increase in the per tonne cash production costs.
All in sustaining costs per ounce of silver, net of by-product credits, in Q2 Fiscal 2018 at the Ying Mining District was $1.08compared to $2.33in the prior year quarter. The improvement was mainly due to lower cash costs per ounce of silver as discussed above.
For the six months ended September 30, 2017, a total of 333,701 tonnes of ore were mined and 338,904 tonnes milled at the Ying Mining District, down by 5% and 3%, compared to 352,702 tonnes mined and 347,901 tonnes milled in the same prior year period. Average head grades were 299 g/t for silver, 4.4% for lead, and 0.8% for zinc compared to 305 g/t for silver, 4.7% for lead, and 1.1% for zinc, respectively, in the same prior year period.
During the same time periods, the Ying Mining District sold approximately 2.8 million ounces of silver, 1,700 ounces of gold, 29.0 million pounds of lead, and 3.0 million pounds of zinc, compared to 3.1 million ounces of silver, 1,900 ounces of gold, 32.6 million pounds of lead, and 3.6 million pounds of zinc in prior year period.
For the six months ended September 30, 2017, the cash mining costs at the Ying Mining District was $57.32per tonne, an increase of 13% compared to $50.70in the same prior year period. The cash milling costs was $8.29per tonne, a decrease of 12% compared to $9.44in the same prior year period.
Cash costs per ounce of silver and all in sustaining costs per ounce of silver, net of by‐product credits, at the Ying Mining District, for the six months ended September 30, 2017, were negative $3.79and $2.30respectively, compared to negative $1.44and $3.99in the same prior year period.
In Q2 Fiscal 2018, approximately 29,834 m or $0.6 millionof underground diamond drilling (Fiscal Q2 2017 – 22,188 m or $0.5 million) and 6,390 m or $1.9 millionof preparation tunnelling (Fiscal Q2 2017 – 5,333 m or $1.4 million) were completed and expensed as mining preparation costs at the Ying Mining District. In addition, approximately 16,958 m or $5.2 millionof horizontal tunnel, raises and declines (Q2 Fiscal 2017 – 14,804 m or $4.8 million) were completed and capitalized.
For the six months ended September 30, 2017, approximately 60,898 m or $1.3 millionof underground diamond drilling (same prior year period – 35,038 m or $0.9 million) and 11,727 or $3.3 millionof preparation tunnelling (same prior year period – 10,169 m or $2.8 million) were completed and expensed as mining preparation costs at the Ying Mining District. In addition, approximately 35,848 m or $10.2 millionof horizontal tunnel, raises, and declines (same prior year period – 32,677 m or $9.7 million) were completed and capitalized.
2. GC Mine, Guangdong Province, China
| | | | | | | | | | | | Operational results - GC Mine | Q2 2018
September 30, 2017 | Q1 2018
June 30, 2017 | Q4 2017
March 31, 2017 | Q3 2017
December 31, 2016 | Q2 2017
September 30, 2016 | | Six months ended September 30, | | | | | | 2017 | 2016 | | | | | | | | Ore Mined (tonne) | 65,812 | 64,865 | 40,224 | 81,481 | 74,692 | | 130,677 | 139,041 | | | Ore Milled (tonne) | 63,648 | 65,944 | 39,929 | 81,080 | 76,100 | | 129,592 | 139,687 | | | Head Grades | | | | | | | | | | | | Silver (gram/tonne) | 102 | 98 | 91 | 89 | 96 | | 100 | 97 | | | Lead(%) | 1.4 | 1.6 | 1.3 | 1.4 | 1.6 | | 1.5 | 1.5 | | | Zinc (%) | 2.8 | 2.7 | 2.6 | 2.8 | 2.8 | | 2.7 | 2.9 | | Recovery Rates | | | | | | | | | | | | Silver(%) | 74.4 | 81.2 | 72.8 | 75.4 | 76.2 | | 77.8 | 76.5 | | | Lead(%) | 82.8 | 88.8 | 82.4 | 85.5 | 86.6 | | 86.0 | 86.7 | | | Zinc (%) | 81.6 | 80.9 | 74.8 | 86.5 | 86.4 | | 81.2 | 86.1 | | Metal Sales | | | | | | | | | | | | Silver (in thousands of ounce) | 155 | 189 | 53 | 179 | 183 | | 344 | 332 | | | Lead (in thousands of pound) | 1,656 | 2,147 | 818 | 2,214 | 2,163 | | 3,803 | 4,023 | | | Zinc (in thousands of pound) | 3,311 | 4,244 | 455 | 4,478 | 4,106 | | 7,555 | 7,513 | | Cash mining cost ($ per tonne) | 34.60 | 39.20 | 37.91 | 31.34 | 28.61 | | 36.88 | 30.87 | | | Total mining cost ($ per tonne) | 42.62 | 46.99 | 45.37 | 38.90 | 36.78 | | 44.78 | 39.15 | | | Cash milling cost ($ per tonne) | 14.63 | 16.73 | 20.06 | 13.09 | 12.94 | | 14.95 | 14.15 | | | Total milling cost ($ per tonne) | 17.90 | 19.85 | 24.99 | 15.50 | 15.57 | | 18.14 | 17.05 | | | Cash production cost ($ per tonne) | 49.23 | 55.93 | 57.97 | 44.43 | 41.55 | | 51.83 | 45.02 | | | | | | | | | | | | | | Cash cost per ounce of silver ($) | (13.56) | (7.80) | (1.72) | (13.11) | (6.39) | | (10.39) | (3.94) | | | All-in sustaining cost per ounce of silver ($) | (3.77) | (2.48) | 14.55 | (6.12) | (1.49) | | (3.06) | 1.32 | |
In Q2 Fiscal 2018, the total ore mined at the GC Mine was 65,812 tonnes, a decrease of 8,880 tonnes or 12%, compared to 74,692 tonnes mined in Q2 Fiscal 2017, while ore milled decreased by 16% to 63,648 tonnes from 76,100 tonnes in the prior year quarter. The decrease was mainly due to the interruption arising from the typhoon that impacted South Chinaduring the quarter and the regulatory mine inspection during the normal process to renew the safety production permit at the GC Mine. Head grades were 102 g/t for silver, 1.4% for lead, and 2.8% for zinc compared to 96 g/t for silver, 1.6% for lead, and 2.8% for zinc in the prior year quarter.
In Q2 Fiscal 2018, the GC Mine sold 155 thousand ounces of silver, 1.7 million pounds of lead, 3.3 million pounds of zinc, compared to 183 thousand ounces of silver, 2.2 million pounds of lead, and 4.1 million pounds of zinc sold in the prior year quarter. The decrease of metal sold at the GC Mine was mainly due to less ore processed in the current quarter.
Total and cash mining costs per tonne at the GC Mine in Q2 Fiscal 2018 were $42.62and $34.60per tonne, compared to $36.78and $28.61per tonne in Q2 Fiscal 2017. The increase in cash mining costs was mainly due to a $0.3 millionincrease in mining preparation costs resulting from more underground drilling and tunnelling expensed in the current quarter and less production output resulting in higher per tonne overhead costs allocation.