Silvercorp Reports Q2 Gold Production Surge, Silver Output Dips

Silvercorp Metals (NYSE:) Inc., with a market cap of 407.56M USD according to InvestingPro data, experienced a significant increase in gold production during the second quarter, while silver, lead, and zinc production figures declined, as reported on Monday.

The company reported a surge in gold production to 2,458 ounces, more than doubling the output from the previous year’s 1,200 ounces. Despite this increase in gold production, the overall yield of silver equivalent ounces fell slightly to 1.8 million ounces. In contrast to the gold figures, silver production dipped to 1.6 million ounces from the previous year’s 1.8 million.

Alongside silver, lead and zinc yields also saw a downturn. The lead output dropped to 16.1 million pounds from nearly 18 million pounds the previous year. Similarly, zinc yields reduced to 4.6 million pounds from approximately 6 million pounds in the preceding year.

The company attributed these decreases primarily to lower head grades at the Ying mining district, which resulted in reduced silver and lead production. Additionally, operations at the GC mine were disrupted due to improvement measures and a province-wide suspension of industrial activities linked to enhancements of the provincial power grid. These disruptions contributed further to the decreased output of silver, lead, and zinc for Silvercorp Metals during Q2.

InvestingPro data also reveals that Silvercorp Metals has a P/E ratio of 20.76 and a P/E ratio (adjusted) of 19.73 for LTM2024.Q1. The company’s revenue for LTM2024.Q1 is 204.54M USD, showing a decline of -8.15% from the previous year. This decline aligns with the InvestingPro Tip that the company’s revenue has been declining at an accelerating rate.

Despite the declining trend in earnings per share, as indicated by another InvestingPro Tip, Silvercorp Metals maintains a strong financial footing. The company holds more cash than debt on its balance sheet and its high earnings quality, with free cash flow exceeding net income, should allow management to continue dividend payments. Indeed, the company has maintained dividend payments for 17 consecutive years. For more insightful tips and real-time metrics, consider subscribing to InvestingPro, which includes 12 additional tips for SVM.

Looking forward, analysts predict that the company will be profitable this year and the net income is expected to grow. However, the stock has taken a big hit over the last six months, trading near its 52-week low. This provides a potential opportunity for investors as the InvestingPro Fair Value is estimated at 3.04 USD, above the previous close price of 2.4 USD.

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