Silvercorp Q1 Fiscal 2026 Financial Result

In a strong start to fiscal 2026, Silvercorp Metals Inc. reported a 13% revenue increase to $81.3 million for the first quarter, compared to $72.2 million in the same period last year. The Vancouver-based miner attributed the growth to higher metal production volumes and improved commodity prices across its operations.

The company posted adjusted net income of $21.0 million, or $0.10 per share, representing a modest 2% increase from $20.6 million in the prior year period. However, on a per-share basis, earnings declined from $0.12 to $0.10, primarily due to share dilution following Silvercorp’s acquisition of Adventus Mining Corporation in July 2024.

Operating cash flow showed significant improvement, rising 21% to $48.3 million compared to $40.0 million in Q1 fiscal 2025. This cash generation occurred despite increased production costs related to higher ore processing volumes and new mineral rights royalties implemented in China during the previous fiscal year.

Silver production across Silvercorp’s operations increased by 6% to 1.8 million ounces, while gold production surged 79% to 2,050 ounces compared to the same quarter last year. The company’s primary operations include the Ying Mining District and GC Mine in China, with newly acquired development projects in Ecuador.

In reporting its financial results, Silvercorp made adjustments to exclude a $4.8 million charge related to fair value adjustments on derivative liabilities from convertible notes issued in November 2024. Without these adjustments, reported net income was $18.1 million ($0.08 per share) compared to $21.9 million ($0.12 per share) in the prior year quarter.

The company’s weighted average shares outstanding increased from 177.6 million to 218.0 million, reflecting the additional 38.8 million shares issued during the Adventus acquisition. This 23% increase in share count affected all per-share calculations despite absolute earnings growth in adjusted terms.

Free cash flow in Q1 was $22.5 million, slightly below the $23.6 million generated in the same period last year. The difference stemmed from $7.6 million in expenditures dedicated to advancing construction at the El Domo Project and exploration at the Condor Project in Ecuador. Total capital expenditures increased to $25.8 million from $16.4 million in the prior year quarter.

Silvercorp’s financial position remained strong, with cash and short-term investments reaching $377.1 million at quarter end, an increase of $8.1 million from the previous quarter. The company also maintains equity investments valued at $72.2 million and has secured a $175 million stream financing commitment from Wheaton Precious Metals to support the El Domo project construction.

Capital expenditures were strategically allocated across the company’s portfolio, with Chinese operations receiving $18.8 million for exploration, development, and equipment, while Ecuador operations received $5.4 million. Within China, the Ying Mining District received $16.7 million, while the GC Mine received $1.6 million. The company also commenced construction at the Kuanping project during the quarter.

Despite the positive financial performance, Silvercorp reported a significant operational challenge that will impact short-term production. A fatality involving a worker of the mining contractor occurred at the HZG mine in the Ying Mining District. The incident, which took place during a recruitment tour, was not immediately reported to the company by the contractor but was later investigated following a whistleblower report.

As a result of the ongoing government investigation, certain mining areas have been closed, which Silvercorp estimates will reduce current quarter production by 20-25%. The company is awaiting the final investigation report and will implement any required safety improvements before resuming operations in the affected areas.

The production outlook for the current quarter stands in contrast to the strong operational performance in Q1, where the Ying Mining District produced 1,689 thousand ounces of silver and 2,050 ounces of gold, representing increases of 7% and 79% respectively compared to the prior year quarter. Meanwhile, the GC Mine produced 138 thousand ounces of silver, a 5% decrease from the prior year period.

During the quarter, Silvercorp maintained its commitment to shareholder returns, paying $2.7 million in dividends to common shareholders while continuing to invest in growth opportunities across its expanding portfolio of assets in China and Ecuador.