Silvercorp Metals (NYSEAMERICAN:SVM) reported what it described as record-breaking third quarter fiscal 2026 financial results, driven largely by higher realized silver prices and improved operating performance at its Ying mining district in China. President Lon Shaver said the company’s results underscore its leverage to stronger metals prices while highlighting ongoing progress on growth projects in China and Ecuador, as well as a recently announced acquisition in Kyrgyzstan.
Record revenue and cash flow, with a derivative-related net loss
Silvercorp reported third quarter revenue of $126 million, up 51% from the prior-year quarter. Shaver attributed the improvement mainly to an 80% increase in realized silver selling prices, which he said added “just under $49 an ounce after smelter deductions.” Silver represented 72% of quarterly revenue.
Despite the strong operating performance, Silvercorp reported net income of negative $15.8 million, or negative $0.07 per share. Shaver said the loss primarily reflected a $60 million non-cash charge related to the fair value of derivative liabilities. In the question-and-answer session, he clarified that the derivative liability was related to the company’s convertible notes. On an adjusted basis, excluding non-cash and one-time items, Silvercorp reported adjusted net income of $47.9 million, or $0.22 per share, compared with $22 million, or $0.10 per share, in the prior-year quarter.
Balance sheet strength and capital deployment
Silvercorp said it invested nearly $26 million in its China operations and $18 million at the El Domo project in Ecuador during the quarter, but still increased cash on hand. The company ended the quarter with $463 million in cash, an increase of more than $80 million from September 30.
In addition, the company referenced investments in associates and other companies with a market value of $233 million as of December 31, which management said was more recently “pegged at just under $260 million.” After quarter end, Silvercorp announced an agreement to acquire a gold project in Kyrgyzstan for $162 million in cash, with $92 million paid at closing on January 27.
China operations: higher throughput, lower grades, and cost improvements
Silvercorp reported third quarter production of approximately:
- 1.9 million ounces of silver
- Just over 2,000 ounces of gold
- 16 million pounds of lead
- 7 million pounds of zinc
At the Ying district, Shaver said production benefited from increased use of shrinkage mining relative to cut-and-fill, driving record productivity. Tons mined and milled increased 23% and 18%, respectively, compared with the third quarter of fiscal 2025. However, head grades were lower, which management attributed to maintenance on the XRT sorter in October and higher dilution associated with the shift toward shrinkage mining. The company also stockpiled more than 61,000 tons of ore to be processed during the Chinese New Year holiday period.
For the fiscal year to date, Silvercorp reported production of 5.3 million ounces of silver, 6,231 ounces of gold, 46 million pounds of lead, and 18 million pounds of zinc. Management said this represented increases versus the prior year of 1% in silver, 42% in gold, and 1% in lead, while zinc production was down 6%.
Costs improved at Ying, with third quarter production costs averaging $76 per ton, down 11% from last year, reflecting mine mechanization and the productivity benefits from shrinkage mining. Year-to-date production costs averaged $80 per ton, which management said was below its annual guidance range for Ying of $87 to $88 per ton. Ying’s cash cost per ounce of silver (net of byproduct credits) was negative $1.22 in the quarter versus negative $0.30 a year earlier, which the company said was driven by a $3.5 million increase in byproduct credits. Ying’s all-in sustaining cost per ounce of silver, net of byproducts, was $11.32.
Consolidated mining income totaled $77.1 million for the quarter, with Ying contributing $71.6 million, or 93% of the total.
On guidance, Shaver said the company did not change its outlook, but acknowledged challenges in catching up after issues earlier in the fiscal year. He said additional tons to be milled during Chinese New Year could help smooth seasonal impacts, but he indicated performance could track toward the lower end of guidance and that “might be still challenging.”
Growth projects: Ying expansion, Kuanping ramp-up, and Ecuador development
Silvercorp said it invested $9 million at Ying during the quarter, primarily for ramp and tunnel development aimed at improving underground access and material handling as the company works to expand mining capacity across its four licenses. Management highlighted permit renewals and capacity increases at several mines, and said it was applying to increase the TLP/LM permit from 230,000 tons to 600,000 tons per year, with approval expected later in the quarter. Once approvals are in place, Silvercorp said Ying’s total permitted annual mining capacity would rise to 1.32 million tons.
At Kuanping, a satellite project north of Ying, the company said construction continued with more than 3 kilometers of ramp development and 693 meters of exploration tunneling completed in the quarter. Kuanping is expected to begin delivering “some minor development ore” starting in June, and has a permit for up to 200,000 tons per year. Silvercorp said it expects to publish an updated technical report for the Ying district, including Kuanping, by mid-year.
In Ecuador, Silvercorp said construction at the El Domo mine continued with approximately 1.1 million cubic meters of material moved in the quarter. Cumulative earthmoving reached 46% of the design volume for the first construction package, with work focused on haul roads, the process plant site, and the tailings storage facility starter dam. The company commissioned a 600-bed construction camp and said it was finalizing a contract with mining contractor CRCC 19, which has mobilized personnel and is expected to bring equipment to site later in the month. Silvercorp said it had spent approximately $45 million on construction through December 2025, or about 16% of its updated $284 million budget.
At the Condor Gold project in Ecuador, the company discussed a previously announced PEA in December for an underground gold operation centered on the Kame and Los Cuyes deposits. Management said the study used a base case gold price of $2,600 per ounce and described the project as long-life and low-cost. Silvercorp said it plans to drive two exploration tunnels to support underground drilling and additional resource definition, and noted that water permits have been approved and the environmental impact study has been approved by Ecuador’s Ministry of Environment, Water, and Ecological Transition. The company said it is engaged in formal consultation with impacted communities, which it characterized as the final stage in obtaining an environmental license for exploitation.
Finally, in Kyrgyzstan, Silvercorp said it recently acquired a 70% interest in the Tulkubash and Kyzyltash gold projects, with the Kyrgyz government retaining a 30% free-carried interest. Management said it plans a phased development approach beginning with the “fully permitted” Tulkubash project, followed by Kyzyltash, and indicated it expects to provide further updates in the coming months.
About Silvercorp Metals (NYSEAMERICAN:SVM)
Silvercorp Metals Inc is a Canadian-based precious metals company engaged in silver, lead and zinc production. The company’s core operations are located in the provinces of Henan and Guangxi in the People’s Republic of China, where it operates several underground mining and milling facilities. Silvercorp focuses on low‐cost, high‐grade silver projects, producing concentrates that are sold to smelting partners under long‐term offtake arrangements.
The company’s principal assets include the Ying Mining District in Henan Province, which hosts multiple sub‐district mines, and the GC and HPG silver‐lead‐zinc projects in Guangxi Province.
