Silvercorp Metals (SVM) 7 Nov 212022 Q2 Earnings call transcript

Thank you for standing by. Good afternoon. My name is Chris, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Silvercorp’s Second Quarter Fiscal 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers’ the will question-and-answer be After turn now over for [Operator would to opening the President, Instructions] I Vice like conference Shaver, to remarks. Lon go Please ahead.

statements Silvercorp or joining after for call yesterday’s today’s our the website. results. to for quarter of On Thanks, We you second our afternoon, news our close, MD&A XXXX Good to thank copy available morning behalf Chris. and are release, results of on fiscal I’d discuss released like all results financial everyone. call the financial our our

get and of information Before the of review that contain as XX-K annual risk the form. presentation, quarter applicable today’s in I’d forward-looking we statements will and release Please laws. cautionary going well most and you as statements like to call recent described meaning XX-F second securities factors certain included remind information in Form our the within news on our

here. So that same with XX% a QX And basis XX% the finished realized million. quarter, like was year’s we respect our revenues the solid of to to was net that was quarter note X% to in last of compared Revenue year. last I’d compares $XX.X quarter. to in silver That up on quarter a

same earnings to were the per and share $XX.X share same to period for year. last or Second share quarter last compares million the earnings net $X.X $X.XX million $X.XX $X.XX were quarter the for million attributable our $X.XX per that equity that $XX.X year. million or shareholders in or compares to $XX.X And or per period adjusted

and adjustments the on with con remove unrealized of foreign our underlying supplemental better metric share-based and of non-GAAP impacts losses another The and reminder the It’s is of measure including were a elimination loss, adjusted unusual made one-time items, exchange gains in the measure to items. profitability associates, other and business. from potential. a compensation, and investments, provide market growth the non-cash Just the performance share continuing to the to of earnings loss

produced As The to of quarter, ore reported, of tons year’s and in ore compared respectively over we what the you to in was quarter quarter. XXX,XXX that was rains that’s result Ying interruptions current previously as just Mining the cause and a up X% District. transportation shortfall mill XXX,XXX last by of compared in just mainly mill X% mined tons in over would the heavy

QX note in quarter, negative a District cost expecting year And in $X.XX of last increasing is fiscal We’re was Mining to of compared silver, rate credits approximately a of or and by-product In of last of compared the per the of X.X gold I’ll to that’s to lead, XXX second sustaining $X.XX ounces gold, the all-in $X.XX, X% second reduction we million $X.XX our quarter, compared to did But Ying per increase mining net pounds represents prior that’s net similar gold, fiscal for ounce by-product of an and show due but the the to of of item sold, quarter XXXX in negative of silver, XXXX. current ounce we ounces tonnage year. cost quarter. special QX credits, and X%, And silver, was X.X this fiscal zinc lead Cash zinc, XX.X respectively. XXXX. XX% at pounds and of maintain that in X% milling of silver, million million sold in decreases that year.

driven mined $X.X Capital current year reported our fiscal Our a of expenditures at drill program a the completed compared and this zones its project fiscal to in just In gold Silver operations primarily and X of in increase results than million XXXX, reduced cash prior Phase at subsidiary QX in the That expanding compared in offset of lots this in in the total drill to drilling we’re, a of Yesca quarter quarter having been in as And or same the $XX.X initiated very $XX.X reported. higher define was midst be the define $X.X Ying Infini approximately the was to recall, in that now million in second active $XX.X was last quarter. of will over the of at flow million were tunneling programs to rigs going the the forward. mineralization significant in require resources to New diamond drilling meter in of through from as was Mining XXXX. by this resources by million District. said, additional that less year XXX,XXX million Everyone are we’re somewhat District previously million quarter, what capitalized reported continuing test only Ying was meters quarter the La QX areas $X.X four Inc. we Mining some was to with activities development XX,XXX that XX,XXX drilling of worth and with program I running meters Ying or drill September. at and Mexico Silvercorp as

X,XXX of expenditures and million been of New a just from total had had holes of meters drilling capitalized. Infini $X.X total completed of a nine over

project million in a in the In kilo Kuanping being Adding these entered project in as of located deposit kilometers the over items, long. financial District, we flow just quarter, This associates million approximately Shanzhou an Henan Kuanping in other million And a $XXX the investments cash development close, New in is does District value up which short million not quarter strong XX refundable number of and a we in cash had year. or in corporate XX with equity term Ying end invested this of position kilometers $X.X we our include value million that $X.X amount. compared had the yesterday’s million auction. $XXX kilometers of participate had covered $XXX.X the three market September. Pacific area five XXth positioned to million. of equivalents north Pacific The of That’s square New Province, cash increased the up in $XXX June wide terms and this companies, investments approximately New represented to of Within in to as in and total Mining of Pacific’s and as a investments. as $XXX.X of and

at and on outlook, acquisition company consideration consideration total rate an of terms the as million. We District, and The QX maintain yellow interruption the the and transfer SGX pay suspended of this river Despite the production to project we increasing the milling a an the yellow District river nearby October the Kuanping October reached we grade the at quarter operations for In acquire in tonnage in impacted expect – high approximately complete experience at water all the due head discharges Ying rights auction causing to the of into which In mining a at that fiscal third similar a to somewhat. XXXX, in region. this to measure we precautionary in days, level Mining XX, in won to the in time as Ying XXXX. heavy October as XXXX. interest online Mining a of reservoir and this for XXX% the saw has announced that mine XX $XX.X expect the month, be mine of rainfall production the temporarily suspended SGX November

million pounds between annual on continue to to with to be forward, of operator, open guidance led and XX and current and the of ounce million million would like and X.X our XX approximately zinc pounds this pounds pounds call track Looking between million for XX for X.X year. I between fiscal meet million XX And that ounce and questions. we million silver of

from comes you. go Your [Operator Dalton, of Canaccord. Please Instructions] ahead. Thank Dalton Baretto first question

morning and team. Lon Good Thanks.

Hi, Dalton. Thanks.

Hey, you there. you’re having going figuring get your say reiterating you’re hard time out a I’m to I here. how guidance just heard But that

X.X example, end your So, like for is at Ying, guidance ounces. low the million of

the going and there try planning you’re I around ramp to time I have doing so got tend just, hard I a to X.X quarter, quarter you’re you’ve up things with and then New where Is done getting the to but that that? Chinese one rates milling You’ve that guidance. far, something this drop. understand Year automatic

missing to the all we maybe can extra no, I pull hate mean, shifting are Yes, we to that guidance, we we management options while of shifts, doing kinds can just adding a out. and around ahead say doing is understand typically and what slower quarter numbers at it’s totally everything company and looking looking things all Dalton. quarter those of I’ll that

yet. we’re out in at so concede we’re And not on guidance a prepared where to this that position point,

you’re level cost it just suspect forward? renminbi, at I this the guidance with mid-XXs like but do you of has then is has to some levels? even of do some think these that And ton should be new a range, per And mining guys going your to Okay. historically, on too, above with stay running in the the things to low-XXs. about we of of and that kind Like used contracts now, a side we’ll basis, but the on high-XXs, that that’s looks

been the impacted a I have commented pointed costs we that, disclosure, labor Yes. forward. we those has earlier mean, can’t did this which as factor, and RMB of we that’s you has that predict renewal the a think, in certainly going I out year, something as

changes We’re from here. going any not anticipating, forward dramatic

probably from And I sustaining is that basis. in all a number. reasonable an So, overall think,

We’re still within that guidance.

basis, be benefit of to bit are the judgment look that think company’s call to a going the doing, it’s a better those expensed, operating at are whether is kind that I to really some maybe as activities because or of longer costs investments these things So, to of we’re on from. term a it

Understood.

year? intention just last Ying is the plan new then a to And for me, from still District put this your Okay. one it mine one

this the Not with the proposed mine clearly a we’re aiming update be year, first on plan, driving necessarily towards to on new what based end year, speak that. do being reserves cutoff the or is resources but, at step of and early to to give next plan, that’s year, date drilling next guidance we’re a mine able to the obviously to sometime able a

done there past where in under is that’s zones, the being these some work particular to right not do. is results to resource, to a that’s identify give the It’s discussed with level being of But these to planning looking we’re now. mine at we try can what gold undertaken in guidance. aiming just a solid that we’ve As obviously

just and find mine. activities, mineralization for these it’s the it into front find them to resources, doing of not put and We’re reserves to

and give in plan, soon XXXX. a hopeful, as we’ll do to that’s So be that I’m as able in the we’re to position

that’s if From stuff development perspective, in Okay, squeeze a kind lot early great. okay. of maybe then this Mexico. And more a and China just, I’ll one of you do corporate stage in

actively And on. focus Is Are still that’s later that or so forward? operating the going looking either something for stage going if be you will? you

say, criteria. report numbers, with I runs the of advanced we’ve I’d those projects the the production do been would have is basis in comment two resource on that Mining of exploration of not to calculate our numbers in Chinese those associated really District, a projects No, more focus acquisitions Ying full while them. to be a sort range the position

we’ve we’ve the we’re that’s incubator to that project ideal why into priorities, prior to some that, bit holes of our that terms our talked looking So, can Ying we can bring state arguably just we can cash did respect of it’s jump earlier selected the But looking approach. those. we be would as With about that put outside through to But of stage it hopefully production. those that projects, project. wouldn’t of and of in Mexico and give spot definitive shifting track we an fast sort a was analogs things into a where to by sweet But development production before we’re other say being flow quickly. at at drill vendor. have And are of not the asset well. more I on Again of course, as an that and model that that guidance

That’s great. me, Thank That’s all for guys. you.

Dalton. Thanks

you. Thank

question from next ahead. Reagor, Roth Your Joseph Capital Joseph, comes Partners. please go

for Thanks team. and questions. Lon my Hey, taking

Joe. Hi,

RMB, kind mentioned you cost so the from the, inflation little move things starting in your the a world? see guys general following around bit the you cost inflation of Hey, on of guys to side but on

the case. that’s I say can’t that, really

look have catch I out revised. like think, Ying being, that a XX% call year two and before, and about when up back early raw as as the, mining talked costs. playing we’ve on the aspect, and contracts typically talked for or which about items mean, that balance rate of labor were we’ve at labor with they’re and our And cost the materials, this already you I we was it, cost being year in about that utilities, addressed costs those look the at other you the of things the sort contractor like either run

a think lot that have the an RMB through already. flowed seen I So, on increases we’ve of basis,

down rate, on the just that. what’s what’s to really a rate of, that comes it’s well, impact exchange now So, exchange question

might Ying Okay. kind And guys and a company get over additional, mine, maybe grow a you do we’ll pointed to the, you of here? timeline from then a, at seventh to time like when really kind potential how now, guys start Ying, have from the it think let’s plan to a call of you this

mean, and and I and lot that of, it might development a zones. I from see amounts some comment, can we have you think it in small XX identified also you drilling, DCG seventh generating drilling information. we’re in mine over ramping DCG Yes, rigs have to previous delivering of is gold our results, my or up around of process call that But,

we be that and the impact of articulate just of releases clearly plan to That’s out be resource be here We’re the is, needs to finding, alert that the say calculation for to, to going targeted to really reserve a that news market. cutoff packaging we’re solid in a that December. but what what that foundation to end we’re putting what up in that love position done doing, with to can,

to do prior done think to be being that, please so just matter of, it I And and the understand we it’s a works patient want right. and

thing, been What your sheet share last the of with and almost then short your then line of peer debt. equity perfectly you to And has group. at to lack side the of corporate investors? the investments, balance enough. differentiation there the cash out get guys marketing term Fair the looking balance, And the performance on kind are the in doing show investments,

expanded satellite and milling to an of The are and permitting metal adding that and up potentially social currently looking terms Yes, that’s front base of been in our be and a mill into we increase. to clearly make have at that assets that all feed milling conferences we’re our a side people use we’ve these And up broader outreach we’re forward throughput process silver, investor in understand dramatic new of terms more balance capacity looking at, the look of be these company to for traditional to become yes these that ramping have, Ying zones. do. for what marketing. looking even of we’re our company, also key broader concessions strong We’ve output Ying grow Ying to to in for goal some both, about of to in begun a capacity. seeing key presence component, growth, our but would growth sure in be sheet our message messaging we’ve get we the that would other projects in contributors, acquisitions and media in lead to a a up and And we’re a These with that and in obviously, would the copper that but zinc, doing, very also the the participating and growth looking the and planning Ying. leverage things on made that our tie District strategy

Thanks. Okay. over. I’ll it turn

Thanks.

you. Thank

please from comes Thompson, BMO. question ahead. next Ryan, go Ryan Your

for the Thanks update. Lon. Hi,

just done the of just like tell some that little about Have yet? talk more I assays you a back whatever questions any gotten but could on project. Just been my elaborate got that’s seeing? you asked, can you Yesca, of bit work La think us you’re what maybe actually most you Do there. about

together, get the And going we been But, wrap as complete saw of silver back. been drilling significant so we’ve grades we’re, can game into? that, grand package we’ve plan in getting forward what million. this really of What and a What of in we does work. want that a what been really of assays so we’re a just spending That’s exciting been have it not package get it’s more results like? early to Yes, it lot thing, scheme days. the getting capitalized the We’ve potential is? does obviously that and have there not previous more, We’ve started summer. yet information the more having that numbers Again, standpoint, looking some of it understanding, of still wholesome from for more we well, to X.X look a it together. context we’ve that is confirmatory

the maybe up callers on And question one just Okay. follow more there. then previous

capital allocation, you while back you or little I put planned is talk big program share guys it in you that? thinking it the do Is about buyback on guys execute A you in something Just there. bit it place about think on, how more about How just, share just a you you’re think little to a Can in price? there’s a in that? drop place. case have

place. of the kind so as flexibility, you’ve why we to arise. think, upon that options was time be immediate answered circumstances have we I plans that’ll don’t to good have it, but well any clearly it’s And saying to wanted have have at always it and in use this they that Yes, decided

in like respond just able have opportunities. good it’s we shelf to just to now be to in to place right quickly So have place, a

it. Got

all I lot update. for a Thanks had. the That’s Okay.

Thanks, Ryan.

Financial. PI Thank you. from [Operator question comes next Instructions] Justin Stevens, Your

ahead. go please Justin,

a despite thanks challenges. Lon, the yes, good congrats quarter, for and Hey, the on pretty update

in the should you was probably mill we ramp somewhere two? around QX. fiscal looking guess probably you’re to were will as that achieved mining up targeting to fiscal well more fiscal I rate QX get Ying And assume rate be rate what at I QX as So, that milling the said processing you mill the, the one know guys or in using

I mean, That’s Year, impact from a Chinese Yes. than look around milling standpoint. correct. milling. rates greater the of issues a that flexibility mining has shutdown when, some do that New have we Also on the you at

From to a processed. an than So approximately as not mine, but only able we’re period the being easier standpoint, tons to mines. operating relates that XX,XXX at mill that’s obvious through got the that it over an higher rate, with run definitely

So obviously this quarter. you’re your into what trying do. yes, assessment coming that’s on and we’re being But of, think I in bang to terms

it. Yes. Got

And the so rates. guess tons XX,XXX milling given you that was with just, said do you stockpiles so increase was in – you sort mining of I the, and about been Delta

That’s the current Yes. the difference quarter. in

the of when So, that the also then the New milling we’re appropriately rate, shutdown. current what now Year we Chinese into at of sort have scheduling now flexibility bleeding fourth but then fiscal the we and typically address quarter, have this to would mining our and things looking for quarter quarter,

Got and costs your prices Do potentially off any in coal that impacts power it. thing of bit stay are reports obviously this power that to operations, power flip either guess the lately, shortages. rationing? potential from sense. thermal you China’s higher or the expect I guys looking Yes, to makes on a and swing

as sort cutbacks, we that, not There’s period, in other have any that any power point. that of the But mitigation, heating No, have that we pollution of we’ve or any at it kick-in solid was And October, no for potential might to of the least, power as did or this any be October past not specific we end not into could that former it we month alerted the as of the winter for, that taken in guidance such guarantees really have rationing notification seen don’t passed costs, the to but there in power place. of sort were period. was impact. anything and really assurances as reasons of head at indication terms us

timeline you then just much could sense. makes compliant sort might rough sort think thing last me you be And relogging And new curious you your it’ll for exploration Got of just of do before if quant do exploration need you would get that what be. XX-XXX to think verification? I’m and a with resource, it or

a the resource. latter work, It’s been some there’s more, been there’s

those to permit I main project that this to early Ying think that looking simultaneously do justification done permit, a what is exploration of the we’ve at a to that mine and get mining in using being to is activities is as more up mining able able apply be typical here start get an focus in for the instead open mining means state of in advanced activities

thereafter be makes suspect. so Got the That you’ll hopefully the, I it the, it. but ground this be month. And boots completed then should fairly sense. and Yes probably on soon

Yes, the the of is the transfer the in mean, mine. that of I completion the owns company interest the closing more really

get at place just but an and tasked up team the we’ve this standpoint. that for shortly have then And The be And going point the so at be that’s Ying permit, other and for back Ying project exploration out to to that’s at month the thereafter, intended application take be pick we putting the able where and acquired. development one mining from to to going looking with team is to planning like there. the yes, in as it’s the over we’ll you

it. Got

me. Sounds good. That’s guys. it Thanks for

Justin. Thanks,

are back Vice [Operator you. session. I Thank President the would the at Lon this closing to concludes for Shaver, This over like questions no time. to There further conference remarks. any question-and-answer Instructions] turn

additional Thank today. great. you call, any That’s or have please have this new as questions for any but for joining thanks we always questions everyone in Chris all and you That’s to forward in on fiscal you a to answer and a Have great our February free feel again results. XXXX day. happy QX us out reach those to updating look give call,

call. today’s concludes conference This you. Thank

lines. for a Thank have pleasant you participating You day. may and disconnect your