Silvercorp Metals (NYSEAMERICAN:SVM) reported record fourth-quarter and fiscal 2026 financial results, driven by sharply higher realized silver prices and continued cash generation from its Chinese operations, President Lon Shaver said on the company’s earnings call.
Shaver said fourth-quarter revenue reached a record $147 million, up 96% from the prior-year period. Cash flow from operating activities was $90 million, while free cash flow totaled $58 million, increases of 194% and 308%, respectively, from a year earlier.
The quarterly performance was “mainly driven by a 183% increase in the realized selling price of silver,” Shaver said, noting that the price averaged just above $78 per ounce after smelter deductions. Silver accounted for 78% of revenue in the quarter.
Adjusted Earnings Rise Despite Non-Cash Charge
Silvercorp reported an unadjusted net loss of about $700,000 for the quarter, or roughly $0.003 per share, reflecting a $60 million non-cash charge tied to the fair value of derivative liabilities. Shaver said the company has since removed the cash settlement option on its convertible notes, reclassifying the conversion feature from a derivative liability to equity.
“This will clear up this reporting issue going forward and simplify our financial statements,” Shaver said.
Excluding non-cash and one-time items, adjusted net income for the quarter was $59.3 million, or $0.27 per share, compared with $14.7 million, or $0.07 per share, in the prior-year quarter. Shaver said the results showed Silvercorp was able to move higher metal prices “through to the bottom line.”
For the full fiscal year, revenue reached $438 million, up 47% from the previous year, supported by a 72% increase in the realized selling price of silver. Adjusted net income was $151 million, or $0.69 per share, compared with $75 million, or $0.36 per share, a year earlier. Annual operating cash flow was nearly $311 million, up from $139 million, and free cash flow exceeded $181 million, more than triple the prior-year level.
Production Mixed as Lower Grades Weigh on Silver, Lead and Zinc
In the fourth quarter, the company produced approximately 1.5 million ounces of silver, nearly 2,500 ounces of gold, 14 million pounds of lead and 4 million pounds of zinc. Full-year production totaled 6.8 million ounces of silver, 8,723 ounces of gold, 60 million pounds of lead and 22 million pounds of zinc.
Compared with the prior year, gold production increased 16%, while silver, lead and zinc production declined 2%, 3% and 7%, respectively. Shaver attributed the declines primarily to lower head grades, reflecting higher dilution associated with increased use of shrinkage mining.
Consolidated mining operating income was $254 million for fiscal 2026, with the Ying mining district contributing $240 million, or 95% of the total.
At Ying, fourth-quarter production costs averaged $78 per ton, down 8% from last year. Shaver said the improvement reflected a 43% increase in tonnes mined and a 2% increase in tonnes milled, supported by mine mechanization and greater use of cost-efficient shrinkage mining. Full-year production costs averaged $80 per ton, below the company’s annual guidance range of $87 to $88 per ton for Ying.
Ying’s cash cost per ounce of silver, net of byproduct credits, was negative $1.03 in the fourth quarter, compared with positive $3.05 in the prior-year period. For the full year, cash costs averaged $0.01 per ounce, compared with $0.62 last year. All-in sustaining costs at Ying were $13.09 per ounce in the fourth quarter and $11.49 per ounce for the full year, net of byproducts.
Growth Spending Focused on China, Ecuador and Kyrgyzstan
Shaver said Silvercorp ended the quarter with $422 million in cash, excluding investments in associates and other companies that had a total market value of $275 million as of March 31. After quarter-end, the company also secured low-cost RMB term loan facilities totaling about RMB 220 million, which Shaver said remain undrawn.
During the quarter, Silvercorp invested nearly $15 million in its Chinese operations and $13 million at the El Domo project in Ecuador. The company also made a $92 million cash payment in late January for the acquisition of the Tulkubash and Kyzyltash gold projects in Kyrgyzstan.
At Ying, Silvercorp invested $29 million in fiscal 2026 in ramp and tunnel development and is budgeting $37 million this year to improve underground access and materials handling. Shaver said the company has completed permit extensions and capacity expansions for the four mining permits that make up Ying, increasing total approved capacity to 1.32 million tons per year. The company is now focused on completing production safety licenses.
Silvercorp is also advancing Kuanping, a satellite project north of Ying. Shaver said the project has a license to produce up to 200,000 tons of ore per year and delivered some development ore in the first quarter of fiscal 2027 for processing at Ying. Including Ying’s expanded permits and Kuanping, total mining capacity would be approximately 1.5 million tons per year.
To support higher production, the company began design and construction of a third mill at Ying in the fourth quarter. The project has a budget of $31.6 million and is expected to add 3,000 tons per day of milling capacity, with commissioning planned for the first quarter of fiscal 2028. Once the new mill is operating, Silvercorp plans to decommission the older No. 1 mill, leaving Ying with about 6,500 tons per day of milling capacity, up from 4,000 tons per day.
Ecuador and Kyrgyzstan Projects Advance
At El Domo in Ecuador, Shaver said construction continued despite heavy rainfall. The company awarded contracts for external power lines and substations, advanced tailings storage facility quality assurance work and completed the ore shed. Silvercorp had spent approximately $60 million on construction through March 2026, representing about 21% of the updated $284 million budget.
At the Condor project, also in Ecuador, Silvercorp plans to develop two 1,500-meter exploration tunnels to support underground drilling and resource definition. Shaver said water permits have been approved and the environmental impact study has been approved by the Ministry of Energy and Mines. The company is now in formal consultation with directly impacted communities, the final step before securing a small-scale mining license, which it is targeting for the second quarter of fiscal 2027.
In Kyrgyzstan, Silvercorp acquired a 100% interest in Chaarat ZAAV in January for $92 million. After year-end, the company converted the entity into a joint venture, with Silvercorp owning 72% and serving as operator, while state-owned Kyrgyzaltyn holds 30%. The Kyrgyz government also issued a new mining license extending the mining period by 30 years to June 2062, following a previously agreed $60 million payment.
Shaver said Silvercorp is updating the bankable feasibility study for Tulkubash, adapting engineering designs and continuing site preparation, with initial pre-stripping targeted for the second quarter of fiscal 2027.
Silvercorp also filed an application to list its shares on the Hong Kong Stock Exchange, which Shaver said the company expects later this year. In response to an analyst question, Shaver said there was nothing notable to report so far in fiscal 2027 regarding maintenance or operating disruptions.
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.
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