Big Gold Inc. press release
Silvercorp Reports Q3 Results: Net Income of $12.7 Million, $0.08 per Share and Provides Fiscal 2019 Production and Cash Costs Guidance
CSE - Canadian National Stock Exchange · Gold · Silver · Copper · Zinc · Canada
Canada NewsWire
VANCOUVER, Feb. 8, 2018
Trading Symbol:TSX: SVM NYSE AMERICAN: SVM
VANCOUVER, Feb. 8, 2018/CNW/ -Silvercorp Metals Inc. ("Silvercorp" or the "Company") (TSX: SVM) (NYSE American: SVM) reported its financial and operating results for the third quarter ended December 31, 2017. All amounts are expressed in US Dollars.
THIRD QUARTER HIGHLIGHTS
Net income attributable to equity shareholders of $12.7 million, or $0.08per share1, compared to net income attributable to equity shareholders of $13.1 million, or $0.08per share in the prior year quarter; Gross margin of 52% compared with 55% in the prior year quarter; Sales of $44.4 million, down $3.4 millionor 7% compared to $47.8 millionin the prior year quarter; Inventories of silver-lead concentrate of 6,234 tonnes, valued at approximately $16.0 million, an increase of $4.5 millionor 39%, compared to 4,666 tonnes valued at approximately $11.5 millionin the prior year quarter; Silver, lead, and zinc metals sold amounted to approximately 1.5 million ounces silver, 15.8 million pounds lead, and 6.4 million pounds zinc, compared to 1.7 million ounces silver, 19.5 million pounds lead, and 5.7 million pounds zinc in the prior year quarter; Head grades were 315 grams per tonne ("g/t") for silver, 4.5% for lead, and 1.0% for zinc at the Ying Mining District, compared to 303 g/t for silver, 4.8% for lead and 0.8% for zinc in the prior year quarter; Total and cash mining costs per tonne ore2of $74.16and $56.11, respectively, compared to $67.12and $47.52in the prior year quarter; Cash cost per ounce of silver2, net of by-product credits, of negative $5.92, compared to negative $5.48in the prior year quarter; All-in sustaining cost per ounce of silver2, net of by-product credits, of $3.16, compared to $1.87in the prior year quarter; Spent $1.8 millionto buyback 788,000 common shares of the Company; Paid $1.7 milliondividend to equity shareholders of the Company; Invested $3.8 millionto participate in a private placement of New Pacific Metals Corp.; and, Ended the quarter with $113.3 millionin cash and cash equivalents and short-term investments, an increase of $16.8 millionor 17%, compared to $96.5 millionas at March 31, 2017.
| | | 1_Earnings per share refers to basic earnings per share_ | | 2_Non IFRS measure, please refer to section 10 of the corresponding MD&A for reconciliation_ |
FINANCIALS
Net income attributable to equity shareholders of the Companyin Q3 Fiscal 2018 was $12.7 millionor basic earnings per share of $0.08, compared to $13.1 million, or $0.08per share in Q3 Fiscal 2017.
Sales in Q3 Fiscal 2018 were $44.4 million, down 7% compared to $47.8 millionin the same quarter last year. Silver and gold sales represented $19.8 millionand $0.6 million, respectively, while base metals represented $23.9 millionof total sales, compared to silver, gold and base metals sales of $23.4 million, $0.7 million, and $23.7 million, respectively, in the prior year quarter.
The Company's financial results in Q3 Fiscal 2018 were mainly impacted by the following: i) an increase of 8% and 37% in the realized selling prices for lead and zinc, compared to the prior year quarter, ii) a 3% decrease in the realized selling price for silver, iii) less metals sold as inventory built up; and iv) higher per tonne production costs.
As at December 31, 2017, silver-lead concentrate inventories were 6,234 tonnes containing approximately 0.7 million ounces of silver and 6.9 million pounds of lead, an increase of 34% or 1,568 tonnes, compared to 4,666 tonnes silver-lead concentrate inventories containing approximately 0.5 million ounces of silver and 5.4 million pounds of lead held as at December 31, 2016.
Cost of salesin Q3 Fiscal 2018 was $21.2 million, comparable to $21.5 millionin Q3 Fiscal 2017. The cost of sales included $15.6 million(Q3 Fiscal 2017 - $14.9 million) cash production costs, $1.3 millionmineral resources tax (Q3 Fiscal 2017 - $1.4 million), and $4.4 million(Q3 Fiscal 2017 - $5.2 million) depreciation and amortization charges.
Gross profitmargin in Q3 Fiscal 2018 was 52%, compared to 55% in Q3 Fiscal 2017. Ying Mining District's gross margin was 55% compared to a 58% gross profit margin in the prior year quarter. GC Mine's profit margin was 41% compared to a 39% gross profit margin in the prior year quarter.
General andadministrative expensesin Q3 Fiscal 2018 and the nine months ended December 31, 2017were $4.9 millionand $14.0 million(Q3 Fiscal 2017 - $4.0 million, nine months ended December 31, 2016- $12.5 million). The increase was mainly due to the resumption of activities at the XHP Project to review alternatives and activities carried at the BYP Mine to renew its mining license, resulting in additional office and administrative expenses and labour costs.
Income tax expensesin Q3 Fiscal 2018 were $4.3 millioncompared to $5.4 millionin Q3 Fiscal 2017. The income tax expense recorded in Q3 Fiscal 2017 included current income tax expense of $3.7 million(Q3 Fiscal 2016 – $4.7 million) and deferred income tax expense of $0.6 million(Q3 Fiscal 2016 – $0.6 million).
Cash flows provided by operating activitiesin Q3 Fiscal 2018 were $27.5 million, compared to $28.3 millionin the prior year quarter. Before changes in non-cash operating working capital, cash flows provided by operating activities in Q3 Fiscal 2018 were $23.0 million, a decrease of $3.4 millionor 13%, compared to $26.4 millionin the prior year quarter.
For the nine months ended December 31, 2017, net income attributable to equity shareholders of the Company was $34.8 millionor $0.21per share, up 15% compared to $30.2 millionor $0.18per share in the same prior year period; sales were $131.6 million, up 2% from $129.4 millionin the same prior year period; and cash flow from operating activities was $65.1 million, down 14% from $75.6 millionin the same prior year period.
Working capitalas at December 31, 2017was $84.9 million, an increase of $14.2 millionor 20%, compared to $70.7 millionworking capital as at March 31, 2017.
OPERATIONS AND DEVELOPMENT
(i)Q3 Fiscal 2018 vs. Q3 Fiscal 2017
On a consolidated basis, the Company mined 252,284 tonnes of ore in Q3 Fiscal 2018, comparable to 252,784 tonnes in Q3 Fiscal 2017. Ore milled were 256,037 tonnes, compared to 263,339 tonnes of ore milled in Q3 Fiscal 2017.
In Q3 Fiscal 2018, the Company sold approximately 1.5 million ounces of silver, 700 ounces of gold, 15.8 million pounds of lead, and 6.4 million pounds of zinc, compared to 1.7 million ounces of silver, 700 ounces of gold, 19.5 million pounds of lead, and 5.7 million pounds of zinc, respectively, in Q3 Fiscal 2017. Sales from lead and zinc accounted for 54% of the total sales and amounted to $23.8 million, an increase of $0.3 million, compared to $23.5 millionin the prior year quarter.
The consolidated total mining costs and cash mining costs were $74.16and $56.11per tonne, compared to $67.12and $47.52per tonne, respectively, in Q3 Fiscal 2017. The increase in cash mining costs were mainly due to: i) a $0.9 millionincrease in raw material supply costs, ii) a $0.4 millionincrease in mining preparation costs resulting from more underground tunnelling expensed in the current quarter, and iii) a $0.5 millionincrease in mining labor costs due to additional bonus accrued as per the Company's profit sharing plan in China.
The consolidated total milling costs and cash milling costs in Q3 Fiscal 2018 were $13.45and $11.31per tonne, compared to $12.40and $10.32per tonne, respectively, in Q3 Fiscal 2017. The increase in cash milling costs were mainly due to $0.2 millionincrease in raw material supply costs.
The consolidated total production costs and cash costs per ounce of silver, net of by-product credits, were negative $3.04and negative $5.92compared to negative $2.50and negative $5.48respectively, 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 1% increase in by-product credits, mainly arising from 8% and 37% increase in lead and zinc net realized selling prices.
The consolidated all-in sustaining costs per ounce of silver, net of by-product credits, is $3.16compared to $1.87in Q3 Fiscal 2017.
(ii)Nine months ended December 31, 2017vs Nine months ended December 31, 2016
For the nine months ended December 31, 2017, approximately 4.7 million ounces of silver, 2,400 ounces of gold, 48.6 million pounds of lead, and 17.0 million pounds of zinc were sold compared to 5.2 million ounces of silver, 2,600 ounces of gold, 56.1 million of lead, and 16.8 million pounds of zinc sold in the same prior year period.
The consolidated total mining and cash mining costs were $71.07and $53.17per tonne, 6% and 16% increase compared to $66.79and $45.92per tonne in the same prior year period while the consolidated total milling costs and cash milling costs were $12.81and $10.55, comparable to $12.86and $10.62per tonne in the same prior year period.
The consolidated cash production costs and all-in sustaining costs per ounce of silver, net of by-product credits, were negative $4.97and $3.35compared to negative $2.95and $3.96, respectively, in the same prior year period.
1. Ying Mining District, Henan Province, China
| Operational results - Ying Mining District | | | | | | | | | | | | Q3 2018 | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 | | Nine months ended December 31, | | | | | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | | 2017 | 2016 | | | Ore Mined (tonne) | 166,619 | 173,294 | 160,408 | 112,755 | 171,303 | | 500,321 | 524,005 | | | Ore Milled (tonne) | 167,543 | 173,946 | 164,959 | 108,051 | 182,259 | | 506,448 | 530,160 | | | Head Grades | | | | | | | | | | | | Silver (gram/tonne) | 315 | 294 | 304 | 298 | 303 | | 304 | 305 | | | Lead (%) | 4.5 | 4.3 | 4.6 | 4.8 | 4.8 | | 4.5 | 4.7 | | | Zinc (%) | 1.0 | 0.8 | 0.8 | 0.8 | 0.8 | | 0.9 | 1.0 | | Recoveries | | | | | | | | | | | | Silver (%) | 95.8 | 95.6 | 95.8 | 96.6 | 95.1 | | 95.7 | 95.4 | | | Lead (%) | 96.4 | 96.2 | 96.3 | 95.6 | 96.7 | | 96.3 | 96.4 | | | Zinc (%) | 57.3 | 50.7 | 45.8 | 46.2 | 47.5 | | 51.7 | 46.0 | | Metal Sales | | | | | | | | | | | | Silver (in thousands of ounces) | 1,322 | 1,472 | 1,324 | 1,255 | 1,555 | | 4,118 | 4,675 | | | Gold (in thousands of ounces) | 0.7 | 0.8 | 0.9 | 0.7 | 0.7 | | 2.4 | 2.6 | | | Lead (in thousands of pounds) | 13,487 | 15,279 | 13,765 | 13,520 | 17,269 | | 42,531 | 49,898 | | | Zinc (in thousands of pounds) | 2,006 | 2,269 | 755 | 1,033 | 1,210 | | 5,030 | 4,815 | | Cash mining cost ($ per tonne) | 66.71 | 59.67 | 54.78 | 49.99 | 55.21 | | 60.45 | 52.18 | | | Total mining cost ($ per tonne) | 90.12 | 81.20 | 76.67 | 53.50 | 80.53 | | 82.72 | 78.46 | | | Cash milling cost ($ per tonne) | 9.84 | 8.50 | 8.07 | 10.43 | 9.09 | | 8.80 | 9.31 | | | Total milling cost ($ per tonne) | 11.87 | 10.45 | 10.10 | 13.60 | 11.03 | | 10.80 | 11.35 | | | Cash production cost ($ per tonne) | 80.60 | 71.85 | 66.93 | 64.34 | 68.22 | | 73.18 | 65.35 | | | | | | | | | | | | | | Cash cost per ounce of silver ($) | (4.53) | (4.27) | (2.97) | (3.73) | (4.60) | | (4.03) | (2.50) | | | All-in sustaining cost per ounce of silver ($) | 2.13 | 1.08 | 3.66 | 0.74 | 1.34 | | 2.25 | 3.11 | |
(i)Q3 Fiscal 2018 vs. Q3 Fiscal 2017
In Q3 Fiscal 2018, the total ore mined at the Ying Mining District was 166,619 tonnes, a decrease of 3% or 4,684 tonnes, compared to 171,303 tonnes mined in the prior year quarter. Correspondingly, ore milled in Q3 Fiscal 2018 decreased by 8% to 167,543 tonnes from 182,259 tonnes in the prior year quarter.
Head grades were 315 grams per ton ("g/t") for silver, 4.5% for lead, and 1.0% for zinc, compared to 303 g/t for silver, 4.8% for lead and 0.8% for zinc in the prior year quarter. The Company continues to achieve improvements in dilution control using its "Enterprise Blog" to assist manage daily operations.
Metals sold were approximately 1.3 million ounces silver, 13.5 million pounds lead, and 2.0 million pounds zinc, compared to 1.6 million ounces silver, 17.3 million pounds lead, and 1.2 million pounds of zinc in the prior year quarter. The decrease of silver and lead sold was mainly due to silver-lead concentrate inventory built up.
Silver-lead concentrate inventories were 6,200 tonnes containing approximately 0.7 million ounces of silver and 6.8 million pounds of lead, an increase of 33% or 1,544 tonnes, compared to 4,656 tonnes silver-lead concentrate inventories held as at December 31, 2016.
Total and cash mining costs per tonne at the Ying Mining District in Q3 Fiscal 2018 were $90.12and $66.71per tonne, respectively, compared to $80.53and $55.21per tonne in the prior year quarter. The increase in cash mining costs were mainly due to: i) a $0.9 millionincrease in raw material supply costs, and ii) a $0.4 millionincrease in mining labor costs due to additional bonus accrued as per the Company's profit sharing plan in China.
Total and cash milling costs per tonne at the Ying Mining District in Q3 Fiscal 2018 were $11.87and $9.84, compared to $11.03and $9.09in Q3 Fiscal 2017. The increase in cash milling costs was mainly due to a 15% increase in per tonne raw material supply costs.
Cash cost per ounce of silver, net of by-product credits, in Q3 Fiscal 2018 at the Ying Mining District, was negative $4.53, comparable to negative $4.60in the prior year quarter.
All in sustaining costs per ounce of silver, net of by-product credits, in Q3 Fiscal 2018 at the Ying Mining District was $2.13compared to $1.34in the prior year quarter.
Approximately 25,109 mor $0.4 millionof underground diamond drilling (Fiscal Q3 2017 – 36,756 mor $0.6 million) and 5,187 mor $1.6 millionof preparation tunnelling (Fiscal Q3 2017 – 4,900 mor $1.4 million) were completed and expensed as mining preparation costs at the Ying Mining District. In addition, approximately 16,326 mor $6.0 millionof horizontal tunnel, raises and declines (Q3 Fiscal 2017 – 17,823 mor $5.5 million) were completed and capitalized.
(ii)Nine months ended December 31, 2017vs Nine months ended December 31, 2016
For the nine months ended December 31, 2017, a total of 500,321 tonnes of ore were mined and 506,448 tonnes milled at the Ying Mining District, down by 5% and 4%, compared to 524,005 tonnes mined and 530,160 tonnes milled in the same prior year period.
Average head grades were 304 g/t for silver, 4.5% for lead, and 0.9% for zinc compared to 305 g/t for silver, 4.7% for lead, and 1.0% for zinc, respectively, in the same prior year period.
Metals sold were approximately 4.1 million ounces of silver, 2,400 ounces of gold, 42.5 million pounds of lead, and 5.0 million pounds of zinc, compared to 4.7 million ounces of silver, 2,600 ounces of gold, 49.9 million pounds of lead, and 4.8 million pounds of zinc in prior year period.
The cash mining costs was $60.45per tonne, an increase of 16% compared to $52.18in the same prior year period. The increase was mainly due to more underground drilling and tunneling being expensed as mining preparation costs as well as the increase of raw material supply prices. The cash milling cost was $8.80per tonne, a decrease of 5% compared to $9.31in the same prior year period.
Cash cost per ounce of silver and all in sustaining costs per ounce of silver, net of by-product credits, were negative $4.03and $2.25respectively, compared to negative $2.50and $3.11in the same prior year period.
Approximately 86,007 mor $1.7 millionof underground diamond drilling (same prior year period – 71,794 mor $1.7 million) and 16,914 or $4.9 millionof preparation tunnelling (same prior year period – 15,069 mor $4.2 million) were completed and expensed as mining preparation costs at the Ying Mining District. In addition, approximately 52,174 mor $16.2 millionof horizontal tunnel, raises, and declines (same prior year period – 50,500 mor $15.2 million) were completed and capitalized.
2. GC Mine, Guangdong Province, China
| Operational results - GC Mine | Q3 2018 | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 | | Nine months ended December 31, | | | | | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | | 2017 | 2016 | | | Ore Mined (tonne) | 85,665 | 65,812 | 64,865 | 40,224 | 81,481 | | 216,341 | 220,522 | | | Ore Milled (tonne) | 88,494 | 63,648 | 65,944 | 39,929 | 81,080 | | 218,086 | 220,767 | | | Head Grades | | | | | | | | | | | | Silver (gram/tonne) | 97 | 102 | 98 | 91 | 89 | | 99 | 94 | | | Lead (%) | 1.4 | 1.4 | 1.6 | 1.3 | 1.4 | | 1.5 | 1.5 | | | Zinc (%) | 2.8 | 2.8 | 2.7 | 2.6 | 2.8 | | 2.8 | 2.9 | | Recovery Rates | | | | | | | | | | | | Silver (%) | 73.6 | 74.4 | 81.2 | 72.8 | 75.4 | | 76.1 | 76.2 | | | Lead (%) | 83.9 | 82.8 | 88.8 | 82.4 | 85.5 | | 85.2 | 86.3 | | | Zinc (%) | 81.3 | 81.6 | 80.9 | 74.8 | 86.5 | | 81.2 | 86.3 | | Metal Sales | | | | | | | | | | | | Silver (in thousands of ounces) | 196 | 155 | 189 | 53 | 179 | | 540 | 511 | | | Lead (in thousands of pounds) | 2,263 | 1,656 | 2,147 | 818 | 2,214 | | 6,066 | 6,237 | | | Zinc (in thousands of pounds) | 4,399 | 3,311 | 4,244 | 455 | 4,478 | | 11,954 | 11,991 | | Cash mining cost ($ per tonne) | 35.48 | 34.60 | 39.20 | 37.91 | 31.34 | | 36.33 | 31.04 | | | Total mining cost ($ per tonne) | 43.10 | 42.62 | 46.99 | 45.37 | 38.90 | | 44.12 | 39.05 | | | Cash milling cost ($ per tonne) | 14.09 | 14.63 | 16.73 | 20.06 | 13.09 | | 14.60 | 13.76 | | | Total milling cost ($ per tonne) | 16.45 | 17.90 | 19.85 | 24.99 | 15.50 | | 17.46 | 16.47 | | | Cash production cost ($ per tonne) | 49.57 | 49.23 | 55.93 | 57.97 | 44.43 | | 50.93 | 44.80 | | | | | | | | | | | | | | Cash cost per ounce of silver ($) | (15.34) | (13.56) | (7.80) | (1.72) | (13.11) | | (12.19) | (7.15) | | | All-in sustaining cost per ounce of silver ($) | (4.52) | (3.77) | (2.48) | 14.55 | (6.12) | | (3.59) | (1.29) | |
(i)Q3 Fiscal 2018 vs. Q3 Fiscal 2017
In Q3 Fiscal 2018, the total ore mined at the GC Mine was 85,665 tonnes, an increase of 4,184 tonnes or 5%, compared to 81,481 tonnes mined in Q3 Fiscal 2017, while ore milled increased by 9% to 88,494 tonnes from 81,080 tonnes in the prior year quarter.
Head grades were 97 g/t for silver, 1.4% for lead, and 2.8% for zinc compared to 89 g/t for silver, 1.4% for lead, and 2.8% for zinc in the prior year quarter.
The GC Mine sold 196 thousand ounces of silver, 2.3 million pounds of lead, 4.4 million pounds of zinc, compared to 179 thousand ounces of silver, 2.2 million pounds of lead, and 4.5 million pounds of zinc sold in the prior year quarter.
Total and cash mining costs per tonne at the GC Mine in Q3 Fiscal 2018 were $43.10and $35.48per tonne, compared to $38.90and $31.34per tonne in Q3 Fiscal 2017. The increase in cash mining costs was mainly due to: i) a $0.2 millionincrease in mining preparation costs resulting from more underground drilling expensed in the current quarter, and ii) a $0.2 millionincrease in mining contractor fees.
Total and cash milling costs per tonne at the GC Mine in Q3 Fiscal 2018 were $16.45and $14.09, compared to $15.50and $13.09, respectively, in Q3 Fiscal 2017. The increase in milling costs was mainly due to a $0.2 millionincrease in raw material supply costs.
Correspondingly, the cash production costs per tonne of ore processed in Q3 Fiscal 2018 at the GC Mine increased to $49.57from $44.43in the prior year quarter.
Cash costs per ounce of silver, net of by-product credits, at the GC Mine, was negative $15.34compared to negative $13.11in the prior year quarter. The improvement was mainly due to a $1.4 millionor 23% increase in by-product credits resulting from a 12% and 37% increase in net realized lead and zinc selling prices at the GC Mine.
All in sustaining costs per ounce of silver, net of by-product credits, in Q3 Fiscal 2018 at the GC Mine was negative $4.52compared to negative $6.12in the prior year quarter.
Approximately 7,770 mor $0.4 millionof underground diamond drilling (Q3 Fiscal 2017 – 3,935 mor $0.2 million) and 5,053 mor $1.2 millionof tunnelling (Q3 Fiscal 2017 – 4,640 mor $1.3 million) were completed and expensed as mining preparation costs at the GC Mine. In addition, approximately 17 mor $0.1 millionof horizontal tunnel, raises and declines (Q3 Fiscal 2017 – 554 mor $0.3 million) were completed and capitalized.