Canada-based, China-focused Silvercorp Metals has reported a lower profit margin for the financial year ended March 2019, on the back of lower prices for the precious and base metals that the company produces.
In the reporting period, the company sold about 6.4-million ounces of silver (up 6% year-on-year), 3 500 oz of gold (up 13%), 64.8-million pounds of lead (up 5%) and 22.7-million pounds of zinc (up 16%).
The production backed up adjustable net income attributable to equity shareholders of $32.2-million, or $0.19 apiece, but that is lower than the $41.5-million, or $0.24 apiece in the prior comparable period.
Silvercorp has explained that the results were impacted by a decrease of 7%, 2% and 17% in the realised selling prices of silver, lead and zinc, respectively, and a 2% increase in total production cost.
The company said its cost of sales in the reporting period was $87.3-million, compared with $82.2-million in the prior comparable period, which included $62-million of cash production costs, $4.9-million of mineral resources tax and $20-million of depreciation, amortisation and depletion charges.
The gross profit margin reduced to 49%, from 52% in the prior comparable period, mainly owing to the decrease in realised metal selling prices.
Silvercorp’s total ore mined increased by 5% to 906 794 t. Ore mined at the Ying mining district increased by 8 435 t, or 1%, to 622 576 t, and ore mined at the GC mine increased by 38 435 t, or 16%, to 284 218 t in the reporting period.
Moreover, Silvercorp completed about 76 000 m of underground diamond drilling at the Ying mining district and around 18 700 m worth of preparation tunnelling.
At the GC mine, the company completed about 24 800 m of underground diamond drilling in the reporting period, and 19 900 m worth of preparation tunnelling.