EX-99.1 2 exhibit99-1.htm NEWS RELEASE DATED FEBRUARY 5, 2016 Exhibit 99.1
Exhibit 99.1



 
NEWS RELEASE  
Trading Symbol: TSX: SVM   

SILVERCORP REPORTS Q3 FISCAL 2016 FINANCIAL AND OPERATING RESULTS
AND FISCAL 2017 GUIDANCE ISSUED

VANCOUVER, British Columbia - February 5, 2016 - Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX: SVM) reported its financial and operating results for the third quarter ended December 31, 2015 (“Q3 Fiscal 2016”). All amounts are expressed in US Dollars

THIRD QUARTER HIGHLIGHTS

  • Cash flows from operations of $9.6 million, or $0.06 per share;

  • Repurchased 684,700 common shares of the Company;

  • Ended the quarter with $66.8 million in cash and short term investments;

  • Net income attributable to equity shareholders of $3.3 million, or $0.02 per share;

  • Silver and lead head grades improved by 13% and 14%, respectively, to 287 grams per tonne for silver and 4.1% for lead at the Ying Mining District, compared to the prior year quarter;

  • Silver sales of 1.4 million ounces, lead sales of 15.1 million pounds, and zinc sales of 4.7 million pounds, down 15%, 9%, and 33%, respectively, from the prior year quarter;

  • Realized selling price for silver, lead, and zinc dropped by 12%, 13%, and 35%, respectively, compared to the same prior year quarter;

  • Sales of $29.1 million, down 28% from the prior year quarter;

  • Gross margin of 33% compared with 38% in the prior year period;

  • Cash cost per ounce of silver, net of by-product credits, of $0.90, compared to $0.53 in the prior year quarter; and

  • All-in sustaining cost per ounce of silver, net of by-product credits1, of $7.72, compared to $10.91 in the prior year quarter.

FINANCIALS

Net income attributable to the shareholders of the Company in Q3 Fiscal 2016 was $3.3 million, or $0.02 per share compared to $5.5 million, or $0.03 per share for the three months ended December 31, 2014 (“Q3 Fiscal 2015”).

In the current quarter, the Company’s financial results were mainly impacted by the following: i) lower metal prices and increased smelter charges, as the realized selling price for silver, lead, and zinc dropped by 15%, 9%, and 33%, respectively, compared to the same prior year quarter; and ii) lower amount of metals sold resulting from lower production output.

Sales in Q3 Fiscal 2016 were $29.1 million, down 28%, compared to $40.2 million in Q3 Fiscal 2015. Silver and gold sales represented $16.8 million and $0.4 million, respectively, while base metals

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    represented $11.9 million of total sales in this quarter compared to silver, gold and base metals of $22.4 million, $0.7 million, and $17.1 million, respectively, in Q3 Fiscal 2015.

    Cost of sales in Q3 Fiscal 2016 was $19.5 million compared to $24.8 million in Q3 Fiscal 2015. The cost of sales included $13.6 million (Q3 Fiscal 2015 - $18.7 million) cash costs and $6.0 million (Q3 Fiscal 2015 - $6.1 million) depreciation, amortization and depletion charges. The decrease in cost of sales is mainly due to a lower amount of metals sold in the quarter, offset by the increase in the per tonne non cash mining costs.

    Gross profit margin in Q3 Fiscal 2016 was 33% compared to 38% in Q3 Fiscal 2015. For the nine months ended December 31, 2015, gross profit was 34% compared to 46% in the same prior year period. The decrease in gross profit margin is mainly due to the decline of metal prices, increases in smelter charges, and increased per tonne production costs. This has been partially offset by the increase in head grades.

    Cash flows provided by operating activities were $9.6 million or $0.06 per share in Q3 Fiscal 2016 compared to $15.4 million or $0.09 per share in Q3 Fiscal 2015.

    OPERATIONS AND DEVELOPMENT

    In Q3 Fiscal 2016, the Company sold 1.4 million ounces of silver, 15.1 million pounds of lead, and 4.7 million pounds of zinc, compared to 1.7 million ounces of silver, 16.7 million pounds of lead, and 7.0 million pounds of zinc, respectively, in Q3 Fiscal 2015. The decrease of metal sales is mainly due to less ore milled in the current quarter partially offset by the increase of head grade.

    For the nine months ended December 31, 2015, the Company sold 4.1 million ounces of silver, 42.6 million pounds of lead, and 13.7 million pounds of zinc, compared to 4.2 million ounces of silver, 42.3 million pounds of lead, and 13.4 million pounds of zinc, respectively, in the same prior year period.

    In reaction to the lower metal prices, the Company intentionally increased its inventory of concentrates. As at December 31, 2015, the Ying Mining District had 2,931 tonnes of lead concentrates and 240 tonnes of zinc concentrates in inventory, 2,631 and 90 tonnes higher, respectively, compared to 300 tonnes of lead concentrates and 150 tonnes of zinc concentrates in stock as at December 31, 2014. The estimated metals contained in concentrate inventory as at December 31, 2015 are approximately 0.3 million ounces of silver, 3.0 million pounds of lead, and 0.1 million pounds of zinc higher, respectively, compared to the metals contained in concentrate inventory as at December 31, 2014.

    1. Ying Mining District, Henan Province, China

    In Q3 Fiscal 2016, the total ore mined at the Ying Mining District was 152,230 tonnes compared to total ore production of 175,782 tonnes in Q3 Fiscal 2015. Total ore milled in Q3 Fiscal 2016 was 151,035 tonnes compared to 187,154 tonnes of ore milled in Q3 Fiscal 2015. Silver and lead head grades improved by 13% and 14%, respectively, to 287 grams per tonne (“g/t”) for silver and 4.1% for lead from 253 g/t for silver and 3.6% for lead, respectively, in Q3 Fiscal 2015. The decrease in ore mined and the increase of silver and lead head grades at the Ying Mining District were mainly due to enhanced dilution control management at all mining stopes.

    In Q3 Fiscal 2016, the Ying Mining District sold 1.2 million ounces of silver, 500 ounces of gold, 12.1 million pounds of lead, and 1.2 million pounds of zinc, compared to 1.4 million ounces of silver, 900 ounces of gold, 14.2 million pounds of lead, and 2.5 million pounds of zinc in Q3 Fiscal 2015. The decrease of metal sales is mainly due to less ore milled in the current quarter partially offset by the increase of head grade.

    In Q3 Fiscal 2016, the total mining costs and cash mining costs at the Ying Mining District were $78.91 and $55.63 per tonne, compared to $73.28 and $57.79 per tonne, respectively, in Q3 Fiscal

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    2015. The decrease in cash mining costs was mainly due to improved management resulting in decrease in labour and material costs.

    In Q3 Fiscal 2016, the total milling costs and cash milling costs were $14.15 and $11.67 per tonne, compared to $15.77 and $13.63 per tonne, respectively, in Q3 Fiscal 2015. The decrease in cash milling costs was mainly due to the decrease in material costs and utility costs.

    All in sustaining costs and all in costs, net of by-product credits, at the Ying Mining District in Q3 2016 was $6.62 and $8.62 per ounce of silver compared to $8.91 and $10.32, respectively, in Q3 Fiscal 2015. The decrease in all in sustaining costs and all in costs was mainly due to improvement in cost and dilution control and less sustaining capital and investment capital incurred in the current quarter.

    For the nine months ended December 31, 2015, the total ore mined at the Ying Mining District was 490,351 tonnes compared to 546,402 tonnes in the same prior year period. Correspondingly, total ore milled was 488,248 tonnes compared to 547,465 tonnes. Head grades were 260 g/t for silver and 3.8% for lead compared to 232 g/t for silver and 3.3% for lead, respectively.

    During the same periods, the Ying Mining District sold 3.5 million ounces of silver, 2,000 ounces of gold, 35.6 million pounds of lead, and 4.0 million pounds of zinc, compared to 3.8 million ounces of silver, 2,500 ounces of gold, 38.4 million pounds of lead, and 5.7 million pounds of zinc in the prior year. The decrease of metal sales was mainly due to the Company intentionally increasing its inventory of concentrates in reaction to lower metal prices.

    For the nine months ended December 31, 2015, the total mining costs and cash mining costs at the Ying Mining District were $80.15 and $58.25 per tonne, compared to $62.10 and $49.24 per tonne, respectively, in the same prior year period. The increase in cash mining costs per tonne was mainly due to: i) a $1.5 million or $3.1 per tonne increase arising from the mining contractor changeover interruption; ii) a $3.2 million or $8.2 per tonne increase in mining preparation costs as approximately 60,435 metre (“m”) of underground diamond drilling and 16,460 m of preparation tunnelling were conducted in the current period; and iii) lower production output resulting in a higher per unit fixed costs allocation offset by $1.2 million, or $1.63 per tonne reduction in labour costs.

    All in sustaining costs and all in costs, net of by-product credits, at the Ying Mining District for the nine months ended December 31, 2015 was $8.52 and $10.08 per ounce of silver compared to $8.62 and $15.00, respectively, in same prior year period.

    In Q3 Fiscal 2016, in addition to approximately 21,223 m of underground diamond drilling and 4,231 m of preparation tunnelling, which were expensed and included in the mining preparation costs, Ying Mining District completed and capitalized approximately 13,893 m of horizontal tunnels, raises and declines. Total exploration and development expenditures capitalized for the Ying Mining District were $4.6 million compared to $8.8 million in Q3 Fiscal 2015.

    For the nine months ended December 31, 2015, in addition to approximately 60,435 m of underground diamond drilling and 16,460 m of preparation tunnelling, which were expensed and included in the mining preparation costs, Ying Mining District completed and capitalized approximately 49,452 m of horizontal tunnel, raises, and declines. Total exploration and development expenditures capitalized for the Ying Mining District were $16.4 million in the nine months ended December 31, 2015 compared to $25.9 million in the same prior year period. In addition, total expenditures capitalized as plant and equipment were $6.7 million, including $4.9 million expenditures to construct a transportation tunnel and haul road, in the current period.

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    The operational results at the Ying Mining District for the past five quarters are summarized in the table below:

    Operational results - Ying Mining District          
    Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015
      31-Dec-15 30-Sep-15 30-Jun-15 31-Mar-15 31-Dec-14
    Ore Mined (tonne) 152,230 171,014 167,107 112,327 175,782  
    Ore Milled (tonne) 151,035 176,936 160,277 99,478 187,154  
    Head Grades            

    Silver (gram/tonne)

    		 287 246 250 268 253  

    Lead (%)

    		 4.1 3.8 3.6 3.7 3.6  

    Zinc (%)

    		 0.8 0.7 0.8 0.8 1.0  
    Recovery Rates            

    Silver (%)

    		 95.4 94.8 94.7 94.8 94.7  

    Lead (%)

    		 96.6 95.0 94.9 95.3 95.9  

    Zinc (%)

    		 50.2 55.1 53.5 52.4 66.8  
    Metal Sales            

    Silver (in thousands of ounce)

    		 1,216 1,132 1,190 822 1,421  

    Gold (in thousands of ounce)

    		 0.5 0.7 0.9 0.6 0.9  

    Lead (in thousands of pound)

    		 12,107 11,529 12,454 8,312 14,168  

    Zinc (in thousands of pound)

    		 1,168 1,459 1,529 875 2,531  
    Cash mining cost ($ per tonne ) 55.63 62.15 56.65 53.25 57.79  
    Total mining cost ($ per tonne ) 78.91 86.29 75.00 74.84 73.28  
    Cash milling cost ($ per tonne ) 11.67 11.55 12.98 16.20 13.63  
    Total milling cost ($ per tonne ) 14.15 13.70 15.40 20.09 15.77  

    2. GC Mine, Guangdong Province, China

    Commercial production at GC mine commenced on July 1, 2014, and the trial mining operation results for the period ending June 30, 2014 have been excluded from the consolidated operation results discussed and revenue realized from metal sales during the trial period was offset against costs capitalized.

    The operational results at the GC mine for the past five quarters are summarized in the table below:

    Production results - GC Mine Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015
      31-Dec-15 30-Sep-15 30-Jun-15 31-Mar-15 31-Dec-14
    Ore Mined (tonne) 71,288 69,546 66,727 46,111 87,916  
    Ore Milled (tonne) 71,593 68,465 66,679 46,100 90,287  
    Head Grades            

    Silver (gram/tonne)

    		 97 107 93 107 104  

    Lead (%)

    		 1.9 1.4 1.7 1.2 1.3  

    Zinc (%)

    		 2.6 2.8 2.5 2.6 2.6  
    Recovery Rates            

    Silver (%)

    		 80.2 77.0 79.3 76.1 75.9  

    Lead (%)

    		 88.3 89.5 89.7 84.9 85.9   

    Zinc (%)

    		 81.2 82.7 85.1 80.0 80.6  
    Metal Sales            

    Silver (in thousands of ounce)

    		 210 128 181 99 251  

    Lead (in thousands of pound)

    		 3,021 1,632 2,420 867 2,500  

    Zinc (in thousands of pound)

    		 3,525 3,172 3,029 1,668 4,452  
    Cash mining cost ($ per tonne) 38.22 36.49 48.74 86.35 33.11  
    Total mining cost ($ per tonne) 46.52 44.68 56.83 132.41 55.20  
    Cash milling cost ($ per tonne) 15.16 15.81 15.52 42.70 15.82  
    Total milling cost ($ per tonne) 17.30 18.05 17.83 58.58 19.88  

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    Total ore mined at GC mine in Q3 Fiscal 2016 was 71,288 tonnes at a total mining cost and cash mining cost of $46.52 and $38.22, compared to 87,916 tonnes mined in Q3 Fiscal 2015 at a total mining cost and cash mining cost of $55.16 and $33.11. The increase in cash mining cost was mainly due to $0.3 million increase in mining preparation costs and lower production output resulting in a higher per unit costs allocation.

    Total ore milled at GC mine in Q3 Fiscal 2016 was 71,593 at a total milling cost and cash milling cost of $17.30 and $15.16, compared to 90,287 tonnes milled in Q3 Fiscal 2015 at a total milling cost and cash milling cost of $19.88 and $15.82.

    The head grades at GC mine were 97 g/t for silver, 1.9% for lead, and 2.6% for zinc in Q3 Fiscal 2016, compared to 104g/t for silver, 1.3% for lead and 2.6% for zinc in Q3 Fiscal 2015.

    Recovery rates at GC mine were 80.2% for silver, 88.3% for lead, and 81.2% for zinc in Q3 Fiscal 2016 compared to 75.9% for silver, 85.9% for lead, and 80.6% for zinc, respectively in Q3 Fiscal 2015.

    In Q3 Fiscal 2016, in addition to approximately 4,202 m of underground diamond drilling and 731 m of preparation tunnelling, which were expensed and included in the mining preparation costs, the GC mine completed and capitalized approximately 3,934 m of horizontal tunnels, raises and declines. Total exploration and development expenditures capitalized at the GC mine were $0.3 million compared to $0.9 million in Q3 Fiscal 2015.

    For the nine months ended December 31, 2015, in addition to approximately 18,500 m of underground diamond drilling and 2,693 m of preparation tunnelling, which were expensed and included in the mining preparation costs, GC mine completed and capitalized approximately 10,393 m of horizontal tunnel, raises, and declines. Total exploration and development expenditures capitalized at the GC mine were $0.8 million in the nine months ended December 31, 2015 compared to $3.2 million in the same prior year period.

    FISCAL 2017 Production and Cash Cost Guidance

      Ore Processed Silver Lead Zinc
      (tonnes) (g/t) (%) (%)
    Ying Mining District 610,000 260 4.1 0.8  
    GC Mine 250,000 109 1.3 3.0  

    Silver Lead Zinc Investment Cash Cost AISC*  
      (Moz) (Mpounds) (Mpounds) (US$M) (US$/t) (US$/oz Ag)  
    Ying Ming District 4.6 50.7 5.3 30.2 74.3 8.13  
    GC Mine 0.5 6.3 14.0 2.8 47.0 8.86  
    Consolidated 5.1 57.0 19.3 33.0 66.4 9.76  
    (*) All-in sustaining cost per ounce of silver is net of credits from gold, lead, and zinc, which are estimated based on the metal prices and foreign exchange rates as at December 31, 2015.

    In Fiscal 2017, the Company expect to produce approximately 860,000 tonnes of ore, yielding 5.1 million ounce of silver, 57.0 million pounds of lead, and 19.3 million pounds of zinc. The consolidated all-in sustaining cost (“AISC”) is forecasted to be $9.76 per ounce of silver after credits from gold, lead, and zinc.

    1. Ying Mining District, Henan Province, China

    In Fiscal 2017, Ying Mining District plans to mine and process 610,000 tonnes of ore averaging 260 g/t silver, 4.1% lead, and 0.8% zinc with expected metal production of 4.6 million ounces of silver, 50.7 million pounds of lead and 5.3 million of zinc. The cash production cost is expected to be $74.3

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    per tonne of ore. All-in sustaining cash cost per ounce of silver is estimated to be $8.13 per ounce of silver, which includes $17.4 million attributed to sustaining capital expenditures, or $3.76 per ounce of silver.

    Capital expenditures in Fiscal 2017 at the Ying Mining District are budgeted at $30.2 million, which includes sustaining capital expenditures of $17.4 million and other capital expenditures of $12.8 million. Sustaining capital expenditures include $2.1 million for tunnel development, $0.7 million of equipment replacement and additions, and $14.6 million in exploration expenditures. Other expected capital expenditures include transportation tunnel and haul road construction of $7.2 million and mining right fees of $5.0 million.

    2. GC Mine, Guangdong Province, China

    In Fiscal 2017, GC Mine plans to mine and process 250,000 tonnes of ore averaging 109 g/t silver, 1.3% lead and 3.0% zinc with expected metal production of 0.5 million ounces of silver, 6.3 million pounds of lead and 14.0 million pounds of zinc. The cash production cost is expected to be $47.0 per tonne of ore. All in sustaining cash cost at GC Mine is expected to be $8.86 per ounce of silver, which includes $0.5 million in sustaining capital expenditures, or $1.04 per ounce of silver.

    Capital expenditures at GC Mine are budgeted at $1.0 million, which includes sustaining capital expenditures of $0.5 million for tunnel development and other capital expenditures of $0.5 million to complete the shaft development.

    3. Consolidated AISC

    Consolidated all-in sustaining cost is estimated to be $9.76 per ounce of silver and the detailed breakdown is as follows:

    Fiscal 2017 AISC Guidance     Ying Mining           Corporate      
          District     GC     and other     Total
    Total cash cost, net of by-product credits*   $ 9,238   $ 1,787   $ -   $ 11,025  
    Government fees and other taxes*     5,569     549     44     6,162  
    Reclamation accretion*     415     32     42     489  
    General and administration*     4,960     1,651     7,456     14,067  
    Sustaining capital*     17,380     536     5     17,921  
    All-in sustaining costs, net of by-product credits* A $ 37,562   $ 4,555   $ 7,547   $ 49,664  
    Other investment capital*     12,810     439     -     13,249  
    All-in costs, net of by-product credits* B $ 50,372   $ 4,994   $ 7,547   $ 62,913  
    Silver sold (in thousands of ounces) C   4,622     514     -     5,136  
    All-in sustaining cost per ounce of silver, net of by-product credits A/C $ 8.13   $ 8.86   $ -   $ 9.67  
    All-in cost per ounce of silver, net of by-product credits B/C $ 10.90   $ 9.72   $ -   $ 12.25  
    (*) Expressed in thousands of US dollars and estimated based on the metal prices and foreign exchange rates as at December 31, 2015.

    Alex Zhang, P.Geo., Vice President, Exploration, is the Qualified Person for Silvercorp under NI 43-101 and has reviewed and given consent to the technical information contained in this news release.

    This earnings release should be read in conjunction with the Company’s Management Discussion & Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on SEDAR at www.sedar.com and are also available on the Company’s website at www.silvercorp.ca. All figures are in United States dollars unless otherwise stated.

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    About Silvercorp

    Silvercorp is a low-cost silver-producing Canadian mining company with multiple mines in China. The Company’s vision is to deliver shareholder value by focusing on the acquisition of under developed projects with resource potential and the ability to grow organically. For more information, please visit our website at www.silvercorp.ca.

    For further information
    Silvercorp Metals Inc.
    Lorne Waldman
    Senior Vice President
    Phone: (604) 669-9397
    Toll Free 1(888) 224-1881
    Email: investor@silvercorp.ca
    Website: www.silvercorp.ca

    CAUTIONARY DISCLAIMER - FORWARD LOOKING STATEMENTS

    Certain of the statements and information in this press release constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategies”, “targets”, “goals”, “forecasts”, “objectives”, “budgets”, “schedules”, “potential” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward-looking statements or information relate to, among other things: the price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company’s material properties; the sufficiency of the Company’s capital to finance the Company’s operations; estimates of the Company’s revenues and capital expenditures; estimated production from the Company’s mines in the Ying Mining District; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company’s operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company’s properties.

    Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into the Company’s existing operations; competition; operations and political conditions; regulatory environment in China and Canada; environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting as per the requirements of the Sarbanes-Oxley Act; and bringing actions and enforcing judgments under U.S. securities laws.

    This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company’s Annual Information Form for the year ended March 31, 2015 under the heading “Risk Factors”. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.

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    The Company’s forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management’s assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.

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    SILVERCORP METALS INC.            
     
    Condensed Consolidated Interim Balance Sheets          
    (Unaudited - Expressed in thousands of U.S. dollars)            
     
     
        As at December 31,     As at March 31,  
        2015     2015  
    ASSETS            
    Current Assets            

    Cash and cash equivalents

    		 $ 63,376   $ 60,179  

    Short-term investments

    		   3,452     9,343  

    Trade and other receivables

    		   1,768     1,278  

    Inventories

    		   9,139     6,899  

    Due from related parties

    		   1,845     33  

    Prepaids and deposits

    		   3,925     5,745  
        83,505     83,477  
     
    Non-current Assets            

    Long-term prepaids and deposits

    		   3,045     2,945  

    Reclamation deposits

    		   2,025     2,112  

    Investment in an associate

    		   3,316     3,449  

    Other investments

    		   208     892  

    Plant and equipment

    		   65,113     64,779  

    Mineral rights and properties

    		   211,138     214,792  
    TOTAL ASSETS $ 368,350   $ 372,446  
     
    LIABILITIES AND EQUITY            
    Current Liabilities            

    Accounts payable and accrued liabilities

    		 $ 33,723   $ 21,768  

    Mine right fee payable

    		   3,898     4,292  

    Deposits received

    		   5,444     8,303  

    Dividends payable

    		   -     674  

    Income tax payable

    		   355     662  
        43,420     35,699  
    Non-current Liabilities            

    Mine right fee payable

    		   5,690     9,746  

    Deferred income tax liabilities

    		   23,367     21,592  

    Environmental rehabilitation

    		   12,671     12,898  
    Total Liabilities   85,148     79,935  
    Equity            

    Share capital

    		   231,827     233,513  

    Share option reserve

    		   12,483     11,741  

    Reserves

    		   25,409     25,409  

    Accumulated other comprehensive loss

    		   (10,385 )   (26,697 )

    Deficit

    		   2,082     (5,089 )
    Total equity attributable to the equity holders of the Company         238,877  
                 
    Non-controlling interests   51,786     53,634  
    Total Equity   283,202     292,511  
     
    TOTAL LIABILITIES AND EQUITY $ 368,350   $ 372,446  

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    SILVERCORP METALS INC.                        
     
    Condensed Consolidated Interim Statements of Income              
    (Unaudited - Expressed in thousands of U.S. dollars, except for per share figures)    
     
     
      Three Months Ended December 31,   Nine Months Ended December 31,  
        2015     2014     2015     2014  
     
    Sales $ 29,081   $ 40,247   $ 88,514   $ 108,196  
    Cost of sales   19,543     24,844     58,692     58,701  
    Gross profit   9,538     15,403     29,822     49,495  
     
    General and administrative   3,140     5,366     13,391     16,233  
    Government fees and other taxes   1,557     1,821     4,753     4,798  
    Foreign exchange gain   (716 )   (958 )   (2,113 )   (1,427 )
    Loss (gain) on disposal of plant and equipment   95     (132 )   80     (118 )
    Loss on dispoal of a subsidiary   460     -     460     -  
    Share of gain in associate   (65 )   (52 )   (166 )   (10 )
    Loss on investments   -     -     -     15  
    Other income   (65 )   67     (179 )   (980 )
    Income from operations                        
     
    Finance income   517     292     1,058     724  
    Finance costs   (280 )   (153 )   (751 )   (224 )
    Income before income taxes   5,369     9,430     13,903     31,484  
     
    Income tax expense   1,453     2,350     3,237     10,155  
    Net income $ 3,916   $ 7,080   $ 10,666   $ 21,329  
     
    Attributable to:                        

    Equity holders of the Company

    		 $ 3,326   $ 5,468   $ 7,856   $ 15,440  

    Non-controlling interests

    		   590     1,612     2,810     5,889  
      $ 3,906   $ 7,080   $ 10,666   $ 21,329  
     
    Earnings per share attributable to the equity holders of the Company
    Basic and diluted earnings per share    		 $ 0.02   $ 0.03   $ 0.05   $ 0.09  
    Weighted Average Number of Shares Outstanding - Basic and Diluted   168,975,392     170,883,808     170,052,392     170,883,808  

    10




    SILVERCORP METALS INC.                        
    Condensed Consolidated Interim Statements of Cash Flow              
    (Unaudited - Expressed in thousands of U.S. dollars)                      
     
      Three Months Ended December 31,     Nine Months Ended December 31,  
        2015     2014     2015     2014  
    Cash provided by                        
    Operating activities                        

    Net income

    		 $ 3,916   $ 7,080   $ 10,666   $ 21,329  

    Add (deduct) items not affecting cash:

    		                        

    Unwinding of discount of environmental rehabilitation

    		   123     38     371     109  

    Depreciation, amortization and depletion

    		   6,356     6,775     15,733     15,467  

    Share of (gain) loss in associate

    		   (65 )   (52 )   (166 )   (10 )

    Loss on disposal of a subsidiary

    		   460     -     460     -  

    Income tax expense

    		   1,453     2,350     3,237     10,155  

    Finance income

    		   (517 )   (292 )   (1,058 )   (724 )

    Loss on investments

    		   -     -     -     15  

    Loss (gain)on disposal of plant and equipment

    		   95     (132 )   80 )   (118  

    Share-based compensation

    		   234     340     742     1,136  

    Income taxes refund paid

    		   (224 )   (3,209 )   (527 )   (6,656 )

    Interest received

    		   514     292     1,058     724  

    Changes in non-cash operating working capital

    		   (2,762 )   2,197     (3,059 )   7,891  
    Net cash provided by operating activities   9,586     15,387     27,537     49,318  
     
    Investing activities                        

    Mineral rights and properties

    		                        

    Capital expenditures

    		   (5,427 )   (12,241 )   (14,157 )   (25,976 )

    Plant and equipment

    		                        

    Additions

    		   (2,604 )   (2,332 )   (5,594 )   (6,459 )

    Proceeds on disposals

    		   202     474     232     474  

    Other investments

    		                        

    Proceeds on disposals

    		   422     -     422     -  

    Reclamation deposit paid

    		   -     -     (9 )   -  

    Net redemptions of short-term investments

    		   (203     7,787     5.504     7.668  

    Proceeds for sale of a subsidiary

    		   11     -     11     -  
    Net cash provided by (used in) investing activities   (7,599 )   (6,312 )   (13,591 )   (24,293 )
     
    Financing activities                        

    Related Parties

    		                        

    Payments Made

    		   (1,587 )   -     (1,587 )   -  

    Non-controlling interests

    		                        

    Distribution

    		   (1,661 )   (651 )   (1,661 )   (3,214 )

    Cash dividends distributed

    		   -     (760 )   (1,323 )   (2,331 )

    Common shares repurchased as part of normal course issuer bid

    		   (419 )   -     (1,686 )   -  
    Net cash used in financing activities   (3,667 )   (1,411 )   (6,257 )   (5,545 )
    Effect of exchange rate changes on cash and cash equivalents   (2,160 )   (1,586 )   (4,492 )   (1,342  
     
    (Decrease) Increase in cash and cash equivalents   (3,840 )   6,078     3,197     18,138  
    Cash and cash equivalents, beginning of the period   67,216     72,674     60,179     60,614  
    Cash and cash equivalents, end of the period $ 63,376   $ 78,752   $ 63,376   $ 78,752  

    11




    SILVERCORP METALS INC.          
    Mining Data            
    (Expressed in thousands of U.S. dollars, except for mining data figures)    
     
     
      Three months ended December 31, 2015
      Ying Mining        
      District1   GC2   Total
                 
    Production Data          

    Mine Data

    		            

    Ore Mined (tonne)

    		 152,230   71,288   223,518  

    Ore Milled (tonne)

    		 151,035   71,593   222,628  
       

    + Mining cost per tonne of ore mined ($)

    		 78.91   46.52   68.58   

    Cash mining cost per tonne of ore mined ($)

    		 55.63   38.22   50.08  

    Non cash mining cost per tonne of ore mined ($)

    		 23.28   8.30   18.50  
     

    + Unit shipping costs($)

    		 3.99   -   2.72  
       

    + Milling cost per tonne of ore milled ($)

    		 14.15   17.30   15.16  

    Cash milling cost per tonne of ore milled ($)

    		 11.6   15.16   12.79  

    Non cash milling cost per tonne of ore milled ($)

    		 2.48   2.14   2.37  
       

    + Average Production Cost

    		            

    Silver ($ per ounce)

    		 7.28   9.32   7.91  

    Gold ($ per ounce)

    		 453   747   508  

    Lead ($ per pound)

    		 0.38   0.59   0.42  

    Zinc ($ per pound)

    		 0.33   0.44   0.31  
     

    + Total production cost per ounce of Silver ($)

    		 4.43   8.86   5.08  

    + Total cash cost per ounce of Silver ($)

    		 0.25   4.62   0.90  
     

    + All-in sustaining cost per ounce of Silver ($)

    		 6.62   9.80   7.72  

    + All-in cost per ounce of Silver ($)

    		 8.62   10.31   9.50  
     

    Recovery Rates

    		          

    Silver (%)

    		 95.4   80.2   90.5  

    Lead (%)

    		 96.6   88.3   94.0  

    Zinc (%)

    		 50.2   81.2   60.2  
     

    Head Grades

    		          

    Silver (gram/tonne)

    		 287   97   226  

    Lead (%)

    		 4.1   1.9   3.4  

    Zinc (%)

    		 0.8   2.6   1.3  
     

    Concentrate in stock

    		          

    Lead concentrate (tonne)

    		 2,931   194   3,125  

    Zinc concentate (tonne)

    		 240   174   414  
       
    Sales Data            

    Metal Sales

    		          

    Silver (in thousands of ounces)

    		 1,216   210   1,426  

    Gold (in thousands of ounces)

    		 0.5   -   0.5  

    Lead (in thousands of pounds)

    		 12,107   3,021   15,128  

    Zinc (in thousands of pounds)

    		 1,168   3,525   4,693  

    Other (in thousands of pound)

    		 -   12,373   12,373  
     

    Metal Sales

    		            

    Silver (in thousands of $)

    		 14,770   2,014   16,784  

    Gold (in thousands of $)

    379

    		   20   399  

    Lead (in thousands of $)

    		 7,738   1,818   9,556  

    Zinc (in thousands of $)

    		 572   1,602   2,174  

    Other (in thousands of $)

    		 -   168   168    
      23,459   5,622   29,081    

    Average Selling Price,Net of Value Added Tax and Smelter Charges

    		            

    Silver ($ per ounce)

    		 12.14   9.58   11.76   

    Gold ($ per ounce)

    		 756   768   756   

    Lead ($ per pound)

    		 0.64   0.60   0.63   

    Zinc ($ per pound)

    		 0.49   0.45   0.46   

    1 Ying Mining District includes mines: SGX, TLP, HPG,LM, BCG and HZG.
    2 GC Silver recovery rate consists of 63.4% from lead concentrates and 16.8% from zinc concentrates.
    2 GC Silver sold in zinc concentrates is subjected to higher smelter and refining charges which lower the net silver selling price.
    +Non-IFRS measures.

    12




    SILVERCORP METALS INC.            
    Mining Data            
    (Expressed in thousands of U.S. dollars, except for mining data figures)      
     
     
        Three months ended September 30, 2014  
        Ying Mining          
        District1        GC   Total  
     
    Production Data            

    Mine Data

    		            
     

    Ore Mined (tonne)

    		 175,782   87,916   263,698  
     

    Ore Milled (tonne)

    		 187,154   90,287   277,441  
     
    + Mining cost per tonne of ore mined ($) 73.28   55.16   67.25  
     

    Cash mining cost per tonne of ore mined ($)

    		 57.79   33.11   49.57  
     

    Non cash mining cost per tonne of ore mined ($)

    		 15.49   22.05   17.68  
     
    + Unit shipping costs($) 5.41   -   3.60  
     
    + Milling cost per tonne of ore milled ($) 15.77   19.88   17.11  
     

    Cash milling cost per tonne of ore milled ($)

    		 13.63   15.82   14.35  
     

    Non cash milling cost per tonne of ore milled ($)

    		 2.14   4.06   2.76  
     
    + Average Production Cost            
     

    Silver ($ per ounce)

    		 7.63   10.06   8.28  
     

    Gold ($ per ounce)

    		 433   750   504  
     

    Lead ($ per pound)

    		 0.40   0.66   0.44  
     

    Zinc ($ per pound)

    		 0.39   0.65   0.44  
     
    + Total production cost per ounce of Silver ($) 3.48   8.26   4.20  
    + Total cash cost per ounce of Silver ($) 0.83   (1.18 ) 0.53  
     
    + Total production cost per ounce of Gold ($)            
    + Total cash cost per ounce of Gold ($)            
     
    + All-in sustaining cost per ounce of Silver ($)2 8.91   (4.22 ) 10.91  
    + All-in cost per ounce of Silver ($)2 10.32   6.61   11.90  
     
      Recovery Rates            
     

    Silver (%) 3

    		 94.7   75.9   88.6  
     

    Lead (%)

    		 95.9   85.9   92.7  
     

    Zinc (%)

    		 66.8   80.6   71.3  
     
      Head Grades            
     

    Silver (gram/tonne)

    		 253   104   205  
     

    Lead (%)

    		 3.6   1.3   2.9  
     

    Zinc (%)

    		 1.0   2.6   1.5  
     

    Concentrate in stock

    		            
     

    Lead concentrate (tonne)

    		 300   311   611  
     

    Zinc concentate (tonne)

    		 150   123   273  
     
    Sales Data            

    Metal Sales

    		            
     

    Silver (in thousands of ounce)

    		 1,421   251   1,672  
     

    Gold (in thousands of ounce)

    		 0.9   -   0.9  
     

    Lead (in thousands of pound)

    		 14,168   2,500   16,668  
     

    Zinc (in thousands of pound)

    		 2,531   4,452   6,983  
     

    Other (in thousands of pound)

    		 -   10,070   10,070  

    Metal Sales

    		            
     

    Silver (in thousands of $)

    		 19,671   2,754   22,425  
     

    Gold (in thousands of $)

    		 725   11   736  
     

    Lead (in thousands of $)

    		 10,217   1,805   12,022  
     

    Zinc (in thousands of $)

    		 1,780   3,146   4,926  
     

    Other (in thousands of $)

    		 -   138   138  
        32,393   7,854   40,247  

    Average Selling Price,Net of Value Added Tax and Smelter Charges

    		            
     

    Silver ($ per ounce)

    		 13.84   10.98   13.41  
     

    Gold ($ per ounce)

    		 786   821   787  
     

    Lead ($ per pound)

    		 0.72   0.72   0.72  
     

    Zinc ($ per pound)

    		 0.70   0.71   0.71  

    1 Ying Mining District includes mines: SGX, TLP, HPG&LM.
    2 BYP gold ounces converted to silver equivalent using a ratio of 50:1.
    3 GC silver recovery rate consist of 53.2% from lead concentrate and 22.7% from zinc concentrate.

    13




    SILVERCORP METALS INC.      
    Mining Data            
    (Expressed in thousands of U.S. dollars, except for mining data figures)  
     
     
        Six months ended September 30, 2015
        Ying Mining    
        District1 GC2 Total
    Production Data      

    Mine Data

    		      
     

    Ore Mined (tonne)

    		 490,351   207,561   697,912  
     

    Ore Milled (tonne)

    		 488,248   206,738   694,986  
     
    + Mining cost per tonne of ore mined ($) 80.15   49.33   70.98  
     

    Cash mining cost per tonne of ore mined ($)

    		 58.25   41.163   53.16  
     

    Non cash mining cost per tonne of ore mined ($)

    		 21.90   8.20   17.82  
     
    + Unit shipping costs($) 4.10   -   2.88  
     
    + Milling cost per tonne of ore milled ($) 14.40   17.72   15.39  
     

    Cash milling cost per tonne of ore milled ($)

    		 12.06   15.49   13.08  
     

    Non cash milling cost per tonne of ore milled ($)

    		 2.34   2.23   2.31  
     
    + Average Production Cost      
     

    Silver ($ per ounce)

    		 7.63   8.98   8.08  
     

    Gold ($ per ounce)

    		 487   717   529  
     

    Lead ($ per pound)

    		 0.42   0.60   0.45  
     

    Zinc ($ per pound)

    		 0.36   0.51   0.38  
     
    + Total production cost per ounce of Silver ($) 4.50   7.11   4.83  
    + Total cash cost per ounce of Silver ($) 1.03   2.78   1.26  
     
    + All-in sustaining cost per ounce of Silver ($) 8.52   10.54   10.27  
    + All-in cost per ounce of Silver ($) 10.08   11.05   11.69  
     
      Recovery Rates      
     

    Silver (%)

    		 95.0   78.3   90.0  
     

    Lead (%)

    		 95.4   88.5   93.4  
     

    Zinc (%)

    		 53.3   82.4   61.9  
     
      Head Grades      
     

    Silver (gram/tonne)

    		 260   97   212  
     

    Lead (%)

    		 3.8   1.6   3.2  
     

    Zinc (%)

    		 0.8   2.5   1.3  
     
    Concentrate in stock      
      Lead concentrate (tonne) 2,931   194   3,125  
      Zinc concentate (tonne) 240   174   414  
     
    Sales Data      

    Metal Sales

    		      
     

    Silver (in thousands of ounces)

    		 3,538   519   4,057  
     

    Gold (in thousands of ounces)

    		 2.0   0.1   2.1  
     

    Lead (in thousands of pounds)

    		 35.563   7,072   42,635  
     

    Zinc (in thousands of pounds)

    		 3,999   9,726   13,725  
     

    Other (in thousands of pound)

    		 -   38,905   38,905  
     

    Metal Sales

    		      
     

    Silver (in thousands of $)

    		 44,293   5,121   49,414  
     

    Gold (in thousands of $)

    		 1,609   43   1,652  
     

    Lead (in thousands of $)

    		 24,429   4,630   29,059  
     

    Zinc (in thousands of $)

    		 2,347   5,498   7,845  
     

    Other (in thousands of $)

    		 -   544   544  
        72,678   15,836   88,514  

    Average Selling Price, Net of Value Added Tax and Smelter Charges

    		      
     

    Silver ($ per ounce)

    		 12.52   9.87   12.18  
     

    Gold ($ per ounce)

    		 799   789   798  
     

    Lead ($ per pound)

    		 0.69   0.65   0.68  
     

    Zinc ($ per pound)

    		 0.59   0.57   0.57  

    Ying Mining District includes mines: SGX, TLP, HPG,LM, BCG and HZG.
    GC Silver recovery rate consists of 57.56% from lead concentrates and 20.72% from zinc concentrates.
    GC Silver sold in zinc concentrates is subjected to higher smelter and refining charges which lower the net silver selling price.

    14




    SILVERCORP METALS INC.            
    Mining Data                
    (Expressed in thousands of U.S. dollars, except for mining data figures)      
     
     
        Six months ended September 30, 2014  
        Ying Mining
    District1    		 BYP GC   Total  
     
    Production Data            

    Mine Data

    		            
     

    Ore Mined (tonne)

    		 546,402   46,547   158,814   751,763  
     

    Ore Milled (tonne)

    		 547,465   48,844   159,431   755,740  

     

    		            
    + Mining cost per tonne of ore mined ($) 62.10   30.55   53.62   58.35  
     

    Cash mining cost per tonne of ore mined ($)

    		 49.24   22.92   31.39   43.84  
     

    Non cash mining cost per tonne of ore mined ($)

    		 12.86   7.63   22.23   14.51  

     

    		            
    + Unit shipping costs($) 4.83   -   -   3.51  
                   
    + Milling cost per tonne of ore milled ($) 15.06   13.40   21.15   16.23  
     

    Cash milling cost per tonne of ore milled ($)

    		 12.88   12.31   16.59   13.62  
     

    Non cash milling cost per tonne of ore milled ($)

    		 2.18   1.09   4.56   2.61  

     

    		            
    + Average Production Cost            
     

    Silver ($ per ounce)

    		 7.57   -   9.79   8.03  
     

    Gold ($ per ounce)

    		 418   565   706   510  
     

    Lead ($ per pound)

    		 0.37   -   0.63   0.40  
     

    Zinc ($ per pound)

    		 0.34   -   0.61   0.38  

     

    		            
    + Total production cost per ounce of Silver ($) 2.95     6.79   3.31  
    + Total cash cost per ounce of Silver ($) 0.40     (2.96 ) 0.07  
                     
    + Total production cost per ounce of Gold ($)     565     566  
    + Total cash cost per ounce of Gold ($)     454     455  
               
    + All-in sustaining cost per ounce of Silver ($)2 8.62   21.54   9.34   10.73  
    + All-in cost per ounce of Silver ($)2 15.00   23.38   13.10   16.77  
                 
      Recovery Rates            
     

    Silver (%) 3

    		 94.1     77.2   90.3  
     

    Gold (%)

    		     89.1     89.1  
     

    Lead (%)

    		 95.6     86.8   93.6  
     

    Zinc (%)

    		 61.2     80.9   65.7  

     

    		        
      Head Grades            
     

    Silver (gram/tonne)

    		 232     105   203  
     

    Gold (gram/tonne)

    		     2.7     2.7  
     

    Lead (%)

    		 3.3     1.3   2.9  
     

    Zinc (%)

    		 0.8     2.7   1.2  
     
    Concentrate in stock            
      Lead concentrate (tonne) 300   -   311   611  
      Zinc concentate (tonne) 150   -   123   273  
     
    Sales Data            

    Metal Sales

    		            
     

    Silver (in thousands of ounce)

    		 3,798   -   402   4,200  
     

    Gold (in thousands of ounce)

    		 2.5   2.7   -   5.2  
     

    Lead (in thousands of pound)

    		 38,362   -   3,928   42,290  
     

    Zinc (in thousands of pound)

    		 5,686   -   7,711   13,397  
     

    Other (in thousands of pound)

    		 -   -   21,412   21,412  

     

    		            

    Metal Sales

    		            
     

    Silver (in thousands of $)

    		 57,598   -   4,569   62,167  
     

    Gold (in thousands of $)

    		 2,121   2,775   11   4,907  
     

    Lead (in thousands of $)

    		 28,629   -   2,866   31,495  
     

    Zinc (in thousands of $)

    		 3,906   -   5,453   9,359  
     

    Other(in thousands of $)

    		 -   -   268   268  
        92,254   2,775   13,167   108,196  

    Average Selling Price, Net of Value Added Tax and Smelter Charges

    		            
     

    Silver ($ per ounce)

    		 15.17   -   11.38   14.80  
     

    Gold ($ per ounce)

    		 837   1,024   821   933  
     

    Lead ($ per pound)

    		 0.75   -   0.73   0.74  
     

    Zinc ($ per pound)

    		 0.69   -   0.71   0.70  

    1 Ying Mining District includes mines: SGX, TLP, HPG&LM.
    2 BYP gold ounces converted to silver equivalent using a ratio of 50:1.
    3 GC silver recovery rate consist of 54.0% from lead concentrate and 23.2% from zinc concentrate.

    15