PRESS RELEASE
Trading Symbol: SVM.TO�������������������������������������������������������������������������������������������������������������� February 14, 2008
SILVERCORP RECORDS $0.12 EPS
FOR Q3 FISCAL 2008 ENDED DECEMBER 31, 2007
VANCOUVER, British Columbia – February
14, 2008 – Silvercorp Metals Inc. (the
“Company”) is pleased to announce that for the 3rd quarter
ended December 31, 2007 the Company recorded consolidated net earnings of
$17.5 million or $0.12 per share compared to $9.3 million or $0.06 per share in the same quarter a year ago.� Total gross profit increased by 100% to
$24.0 million in the 3rd quarter compared to the same period a
year ago.� Net cash provided by
operating activities rose to $22.9 million in the 3rd quarter, a
71% increase over the same period a year ago.
For the nine months ended December
31, 2007, the Company recorded net earnings of $51.0 million, or
$0.35 per share, compared to $17.1 million, or $0.12 per share over the same
period last year.� Sales for the nine
month period increased by $55.1 million, or 185% to $84.9 million compared to
$29.8 million for the same period last year.�
Net cash provided by operating activities rose to $65.2 million for
the nine months, a 186% increase compared to $22.7 million over the same
period last year.
3rd QUARTER HIGHLIGHTS
During the 3rd quarter ended December
31, 2007, gross profit from mine operations amounted to $24.0
million (2007 - $12.0 million) on a total sales of $29.8 million,
representing a gross margin of 81% (2007 - 82%). The net income realized was
$17.5 million (2007 - $9.3 million) with a net profit margin of 59% (2007 -
63%) after deduction of minority interest.�
Both basic and diluted earnings per share doubled to $0.12 as compared
to $0.06 in the prior year period.
Included in the results for the 3rd
quarter ended December 31, 2007, Henan Found purchased and milled 3,959
tonnes of ore from a third party that produced 124 tonnes of lead-silver
concentrate.
The Company continues to achieve industry leading
low total production costs per ounce of silver.� In the 3rd quarter, the total
production cost is negative $11.07 per ounce of silver after adjusting for
by-product credits, compared to negative $8.49 per ounce in the same quarter
a year ago.
For this quarter, a total of 88,122 (2007 - 53,521)
tonnes of ores were mined, from which 3,691 (2007 - 2,042) tonnes of direct
smelting ores were hand sorted for direct shipment to smelters, and 84,431
(2007 - 51,479) tonnes of ores were shipped to mills for treatment to recover
silver-lead and zinc concentrates. The average mining cost is $53.40 (2007 -
$44.00) per tonne of ore and average milling cost is $12.10 (2007 - $20.42)
per tonne of ore.
In comparing to the 2nd quarter ended September
30, 2007, the Company’s ores mined increased by 18%, or
13,405 tonnes to 88,122 tonnes and ores milled increased by 16%, or 11,591
tonnes to 85,028 tonnes in the 3rd quarter of fiscal 2008.� The increase in production was offset by a
10% and 39%, respectively, drop in the average selling price for lead and
zinc, and by the strong Canadian dollar, resulting in production costs,
adjusted for by-products credits, increasing by 19% to negative $11.07 per
ounce of silver from negative $13.62 in the 2nd quarter ended
September 30, 2007.
Net cash provided by operating activities rose to
$22.9 million in the 3rd quarter, a 71% increase over the same
period a year ago, capital expenditures during the period amounted to $22
million representing the purchase of mineral rights and properties, and a
cash dividend distribution of $7.4 million was paid to the shareholders,
resulting in cash and cash equivalents and short term investments of $82.1
million as of December
31, 2007.
NINE MONTH HIGHLIGHTS
For the nine months ended December 31, 2007, gross
profit from mine operations amounted to $67.5 million (2007 - $23.7 million),
representing a gross margin of 80% (2007 - 80%). The net income realized was
$51.0 million (2007 - $17.1 million) with a net profit margin of 60% (2007 -
57%). The net earnings are $0.35 (2007 - $0.12) per basic share, representing
almost a 300% increase.
The Company continues to achieve industry leading
low total production costs per ounce of silver.� The total production cost is negative
$11.62 per ounce of silver after adjusting for by-product credits for the
nine months ended December 31, 2007, compared to negative $7.20 per ounce in
the same period a year ago.
For the nine months ended December 31, 2007, a total
of 233,655 (2007 - 124,765) tonnes of ores were mined, from which 9,760 (2007
- 4,825) tonnes of direct smelting ores were hand sorted for direct shipment
to smelters, and 223,895 (2007 - 119,940) tonnes of ores were shipped to
mills for treatment to recover silver-lead and zinc concentrates. The average
mining cost is $51.19 (2007 - $40.00) per tonne of ore and average milling
cost is $11.92 (2007 - $20.26) per tonne of ore.
Net cash provided by operating activities rose to
$65.2 million in the nine months ended December
31, 2007, a 186% increase over the same period a year ago,� capital expenditures during the period
amounted to $27.5 million representing the purchase of mineral rights and
properties, and a cash dividend distribution of $7.4 million was paid to the
shareholders, resulting in cash and cash equivalents and short term
investments of $82.1 million as of December
31, 2007.
OPERATION HIGHLIGHTS FOR THE MINES - For the 3rd
quarter and 9 months of fiscal 2008
The head grades of run of mine ores of 70,680 and
191,768 tonnes from the Ying Mine for the three and nine months ended
December 31, 2007, are:
� 461.7 and 468.1
gram/tonne for silver;
� 7.5% and 7.5% for
lead; and,
� 3.6% and 3.7% for
zinc, respectively.
The head grades of run of mine ores of 17,442 and
41,887 tonnes from the HPG Mine for the three and nine months ended December
31, 2007, are:
� 217.3 and 227.6
gram/tonne for silver;
� 6.5% and 7.5% for
lead; and,
� 0.7% and 1.2% for
zinc, respectively.
Total sales and realized prices net of value added
tax and smelter charges for the three months ended December 31, 2007, are
comprised of the following:
� 1,087,055 ounces
of silver sold for $11,962,856 at an average selling price of $11.00 per
ounce;
� 853 ounces of
gold sold for $578,339 at an average selling price of $678.01 per ounce;
� 13,776,546 pounds
of lead sold for $13,953,971 at an average selling price of $1.01 per pound;
and,
� 4,925,076 pounds
of zinc sold for $3,306,611 at an average selling price of $0.67 per pound.
Total sales and realized prices net of value added
tax and smelter charges for the nine months ended December 31, 2007, are
comprised of the following:
� 2,959,655 ounces
of silver sold for $33,099,272 at an average selling price of $11.18 per
ounce;
� 1,691 ounces of
gold sold for $1,002,983 at an average selling price of $593.13 per ounce;
� 37,925,734 pounds
of lead sold for $37,522,399 at an average selling price of $0.99 per pound;
and,
� 13,518,607 pounds
of zinc sold for $13,276,534 at an average selling price of $0.98 per pound.
For the three and nine months ended December
31, 2007, the cash production cost for silver adjusted for
by-product credits is negative $11.97 (2007 - negative $9.27) and negative
$12.70 (2007 - negative $7.87) per ounce, respectively.
OUTLOOK
The Company is well positioned to grow through
consolidating the fragmented primary silver sector in China,
starting with its foot-hold in Henan
Province.� With the encouragement of local county
government, the Company, through its acquisition of the LM and TLP
Silver-Lead Mines, is consolidating the silver, lead, and zinc mines and
exploration properties in the Ying/HPG Silver Mining camp, providing a solid base
from which to significantly expand resources and growth potential.
The fourth
quarter is traditionally a slower quarter for the Company as the traditional
Chinese Spring Festival normally occurs during January or February.� This year the Ying Mill will be in
operation, treating ores purchased from third parties as a result of
acquiring the TLP and LM Mines.� The
Company’s mining operations were shut down for two weeks, starting from
February 1st.� In addition,
the Company’s production in the 4th quarter of 2008 has been
affected by the severe weather in Central China
this January that led to unstable power
supply and limitations on staff mobility
and transportation for about 15 days. �
The Company’s Unaudited Interim
Consolidated Financial Statements and Management’s Discussion and
Analysis are available for review on our website at www.silvercorp.ca and through
SEDAR at www.sedar.com.
About Silvercorp
Metals Inc.
Silvercorp Metals Inc. is engaged in the
acquisition, exploration, and development of silver related mineral
properties focusing in the People's Republic of China
("China").
Currently, the Company is operating and developing four Silver-Lead-Zinc
mines at the Ying Mining District, Henan Province, owned through its 77.5%
and 70% Chinese subsidiary companies, respectively and is also exploring the
Na-Bao Polymetalic Project in Qinghai
Province, China.
The Company’s common shares are included as a
component of the S&P/TSX Composite, the S&P/TSX Global Gold, and the
S&P/TSX Global Mining Indexes.
For further
information: SILVERCORP METALS INC., Rui Feng, Chairman &
CEO and Lorne Waldman, Corporate
Secretary, Phone: (604)
669-9397, Fax: (604) 669-9387, Email: info@silvercorp.ca, Website:
www.silvercorp.ca.
CAUTIONARY
DISCLAIMER -- FORWARD LOOKING STATEMENTS
Statements in this press release other than purely
historical information, including statements relating to the Company's future
plans and objectives or expected results, constitute forward-looking statements.
Forward-looking statements are based on numerous assumptions and are subject
to all of the risks and uncertainties inherent in the Company's business,
including risks inherent in mineral exploration, development, and mining.
Production and revenue projections are based not on mineral reserves but on
mineral resources which do not have demonstrated economic viability. As a
result, actual results may vary materially from those described in the
forward-looking statements. There can be no assurance that such
forward-looking statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on such
statements. The Company does not undertake any obligation to update any
forward-looking statements that are incorporated by reference herein, except
in accordance with applicable securities laws. The Company expressly
disclaims any obligation to update any forward-looking statements. We seek
safe harbour.
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