Silvercorp shares fall as quarterly revenue drops on safety-related Ying output cut

what happened

Silvercorp Metals shares slipped 3.3% on Tuesday after the company released preliminary revenue for its second fiscal quarter. According to Seeking Alpha, revenue reached $72.1M year on year, lower overall, although average realized prices rose: silver up 82% to $61.83 per ounce and gold up 32% to $3,955 per ounce.

Output at the Ying Mining District in China's Henan province fell in the quarter. Silver production totalled 900K ounces, down 41%, and gold 1,371 ounces, down 34%. Silver equivalent output dropped 42% to 1M ounces, in line with the expected 40%-50% impact. Production has resumed and reached a 90% operating rate by quarter end, after safety work costing about $13.4M was completed and approved by Chinese authorities. The GC Mine remains suspended pending approval of a new development design.

why it matters

For markets, the picture is mixed: higher silver and gold prices partly offset lower volumes, but revenue remains tied closely to output. Construction of Ying's No. 3 mill remains on schedule, while heavy rainfall disrupted work at the El Domo mine.

market impact

Silver and gold: lower output from a mid-tier producer, while higher metal prices support its revenue

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