Silvercorp Reports $47.9 Million Adjusted Earnings and $132.9 Million Operating Cash Flow in Q3 Fiscal 2026

• Adjusted net income of $47.9 million, or $0.22 per share, compared with $22.0 million in the same quarter last year
• Operating cash flow of $132.9 million, up from $44.8 million in the prior year quarter, including a $43.9 million payment from Wheaton Precious Metals
• Revenue of $126.1 million, a 51% increase from the prior year quarter, with silver representing 72% of total sales at a realised price of $49.0 per ounce
• Cash costs per ounce of silver of negative $3.02 after by-product credits, compared with negative $1.88 in the prior year quarter
• Cash and short-term investments of $462.8 million plus an equity portfolio valued at $233.2 million at quarter end

Silvercorp (TSX/NYSE American: SVM) is a Canadian mining company that produces silver, gold, lead, and zinc from operations in China, primarily at the Ying Mining District and GC Mine. The company's strategy focuses on generating free cash flow from long-life mines, pursuing organic growth through exploration drilling, evaluating merger and acquisition opportunities, and maintaining environmental, social, and governance practices.

Q3 Fiscal 2026 Financial Results

Revenue of $126.1 million in the third fiscal quarter represented a 51% increase over the same period last year. The company sold approximately 9 million ounces of silver at a realised price of $49.0 per ounce after smelter deductions, along with 2,250 ounces of gold, 16.4 million pounds of lead, and 7.0 million pounds of zinc. Silver accounted for 72% of quarterly revenue.

Adjusted earnings before interest, tax, depreciation and amortisation reached $66.7 million, or $0.30 per share, compared with $40.1 million in the prior year quarter. The company reported a net loss of $15.8 million, or $0.07 per share, primarily due to a $60.2 million non-cash charge related to marking convertible notes to market value. This accounting treatment reflects changes in the fair value of debt instruments and does not represent cash outflows.

Free cash flow totalled $89.6 million, compared with $20.5 million in the same quarter last year. The company's cash and short-term investment position increased to $462.8 million from $382.2 million in the previous quarter. The company also holds an equity investment portfolio valued at $233.2 million, up from $180.2 million in the previous quarter.

Production and Operating Performance

The Ying Mining District mined 365,370 tonnes of ore during the quarter, a 23% increase over the prior year period, driven by increased use of shrinkage mining compared with cut-and-fill methods. Mill throughput reached 328,425 tonnes, up 18% year over year.

Production from the Ying Mining District totalled approximately 1.7 million ounces of silver, 2,096 ounces of gold, 14.7 million pounds of lead, and 1.9 million pounds of zinc. Gold production increased 2% while silver, lead, and zinc output declined 2%, 4%, and 4% respectively compared with the prior year quarter. Lower grades resulted from scheduled maintenance on the X-ray transmission ore sorting equipment in October 2025 and higher dilution associated with shrinkage mining. Cash costs of $75.80 per tonne came in below the fiscal 2026 guidance range of $86.8 to $88.4.

The GC Mine produced approximately 0.1 million ounces of silver, 1.7 million pounds of lead, and 5.1 million pounds of zinc during the quarter. Cash costs of $53.37 per tonne and all-in sustaining costs of $68.53 per tonne both came in below guidance. On a per-ounce basis after by-product credits, cash costs were negative $29.05 and all-in sustaining costs were negative $15.66, compared with negative $19.14 and negative $6.13 respectively in the prior year. The mine plans to process approximately 50,000 tonnes of ore in the fourth fiscal quarter.

Capital Expenditures and Development Projects

Capital expenditures totalled $44.3 million in the quarter, compared with $25.3 million in the prior year period. At the Ying Mining District, the company invested $17.7 million in underground ramps, tunnels, and drilling, along with $4.0 million for plant and equipment, compared with $20.1 million and $7.0 million respectively in the prior year.

The El Domo project in Mexico received $18.0 million in capital expenditures, compared with $1.8 million in the prior year period. Development activities focused on infrastructure including internal roads, waste rock storage facilities, process plant site preparation, a starter dam for the tailings storage facility, worker accommodation, and site preparations.

The Kuanping project saw capital expenditures of $2.4 million during the quarter, compared with $0.2 million in the prior year. Mine construction focused on developing access ramps to ore bodies and advancing mining and exploration tunnels. The company expects Kuanping to begin producing ore in June 2026, with material being transported to the Ying processing plant for metal recovery. The GC Mine required $1.8 million in capital expenditures, consistent with the prior year.

Looking Ahead

The Ying Mining District operations will be closed for three weeks during the Chinese New Year period in February, though the processing plant will continue operating to process the 61,105 tonnes stockpiled at quarter end plus ore accumulated in January 2026. Development milestones include the expected start of ore production from Kuanping in June 2026 and continued construction at El Domo. The company ended the quarter with cash and short-term investments of $462.8 million and an equity investment portfolio valued at $233.2 million.

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