Silvercorp Reports $48.3 Million Operating Cash Flow in Q1 Fiscal 2026

Silvercorp Metals Reports 21% Increase in Operating Cash Flow Amid Rising Metal Prices

Silvercorp Metals Inc. (TSX/NYSE American: SVM) reported a 21% jump in operating cash flow to $48.3 million for the first quarter of fiscal 2026, up from $40.0 million in the same period last year, driven by higher production volumes and improved metal prices.

The Canadian mining company, which produces silver, gold, lead, and zinc primarily in China with development projects in Ecuador, posted adjusted net income of $21.0 million ($0.10 per share) after excluding a $4.8 million non-cash charge on derivative liabilities related to convertible notes issued in November 2024.

Revenue rose 13% to $81.3 million compared to $72.2 million in the prior year quarter, with higher production volumes contributing $5.4 million and improved metal prices adding $5.7 million. Silver prices increased 12% while gold prices surged 45% year-over-year, bolstering the company’s financial performance.

Net income attributable to equity shareholders was $18.1 million ($0.08 per share), down from $21.9 million ($0.12 per share) in Q1 Fiscal 2025. The decrease was partially attributed to the derivative charge and dilution from 38.8 million additional shares issued following the acquisition of Adventus Mining Corporation in July 2024.

“The adjusted figures provide a clearer picture of our operational strength by removing non-cash accounting impacts,” a company spokesperson explained in the quarterly report. EBITDA attributable to equity shareholders reached $33.8 million ($0.15 per share).

Silvercorp’s financial position remains robust with cash and short-term investments totaling $377.1 million at quarter end, an increase of $8.1 million from the previous quarter. The company also holds equity investments with a market value of $72.2 million and has access to a $175 million stream financing commitment from Wheaton Precious Metals International for its El Domo project construction in Ecuador.

Production metrics showed notable improvements with approximately 1.8 million ounces of silver (up 6%), 2,050 ounces of gold (up 79%), and 15.7 million pounds of lead (up 1%). Zinc production decreased 19% to 5.2 million pounds. Overall, total silver equivalent production reached 2.0 million ounces, representing a 12% increase from the previous year, with the Ying Mining District accounting for the majority of output.

Cost pressures remained a challenge during the quarter. Consolidated cash cost per ounce of silver, net of by-product credits, was $1.11 compared to negative $1.67 in the prior year period. This shift reflects a 16% increase in ore processing while silver production rose only 6%, resulting in higher unit costs. All-in sustaining costs per ounce of silver increased 37% to $13.49, up from $9.82 in the prior year.

The cost increases stemmed from multiple factors, including $1.0 million in additional general administrative expenses from the Adventus acquisition, $1.5 million in new mineral rights royalties implemented in China, and higher cash production costs as the company processed 16% more ore during the quarter.

Looking ahead, Silvercorp faces production challenges at its flagship Ying Mining District following a contractor safety incident that has resulted in mine area closures. Management estimates a potential 20-25% production shortfall for the current quarter while government safety investigations continue.

“We’re awaiting final investigation results and implementing any required safety facility improvements,” noted the company in its forward guidance.

Despite these challenges, Silvercorp continues to advance its growth projects. Construction is progressing at the El Domo project in Ecuador alongside exploration at the Condor project. The company also commenced construction at the Kuanping mine in China during Q1 Fiscal 2026.

Capital expenditures totaled $24.2 million, up 23% from $19.7 million in the prior year quarter, reflecting ongoing development activities across the company’s project portfolio. Free cash flow was $22.5 million, slightly down from $23.6 million in the prior year, largely due to $7.6 million in expenditures for El Domo project construction and Condor project exploration in Ecuador.

Silvercorp paid $2.7 million in cash dividends during the quarter, maintaining its commitment to shareholder returns while continuing to invest in growth initiatives.