TSX-listed Silvercorp Metals, which owns and operates mines in China, on Thursday reported a net income of $8.7-million for the third quarter ended December 31 – representing a 31% year-on-year decline with the company achieving a net income of $12.7-million in the third quarter of 2018.
The weaker financial performance was attributed to a 5% decline in sales to $42.4-million, on the back of a decrease in silver, lead and zinc prices and a 36% drop in zinc sales.
The company sold 1.7-million silver ounces, 1 100 oz of gold, and 17.8-million pounds of lead during the quarter achieving increases of 13%, 57%, and 13%, respectively, compared to the third quarter of 2018. About 4.1-million pounds of zinc was sold during the quarter.
Silvercorp ended the quarter with inventories of 4 211 t of silver-lead concentrate (containing about 400 000 oz of silver and 4.4-million pounds of lead) and 3 079 t of zinc concentrate (containing about 3.1-million pounds of zinc), an increase of 13% and 415%, respectively, compared to the previous quarter ended September 30.
The company achieved a gross profit margin of 46% compared to 52% in the third quarter of 2018, with the decrease attributed to lower metal prices.
Ore mined at the Ying mining district increased by 5%, or 7 533 t, while ore mined at the GC mine increased by 1%, or 461 tonnes. This resulted in an overall increase of 3% to 260 278 t for the quarter.
The consolidated total mining costs and cash mining costs were $71.76/t and $53.49/t, down 3% and 5%, respectively, compared to $74.16/t and $56.11/t in the third quarter of 2018. Silvercorp reported that the decrease was mainly as a result of higher production output resulting in lower per tonne fixed cost allocation.
Meanwhile, its cash flow from operations amounted to $19.5-million, compared to $27.5-million in the third quarter of 2018, while its all-in sustaining cost per ounce of silver (net of by-product credits) was $6.53 compared to $3.16 in the third quarter of 2018.
Silvercorp said that it paid $2.1-million in dividends to shareholders, and ended the quarter with $125.2-million in cash and cash equivalents – an increase of $1.3-million, or 1%, compared to the prior quarter.