Silvercorp Metals – Growth From 7 Producing Silver And Gold Mines, And 300,000 Meters Of Ongoing Exploration Utilizing 80 Drill Rigs
Lon Shaver, Vice President Of Silvercorp Metals (TSX: SVM) (NYSE: SVM), joins us for a comprehensive overview of the growth on tap from the 7 producing silver and gold mines, and the 300,000 meters of ongoing exploration underway utilizing 80 drill rigs. We start off by getting a production update from the 7 mines operating in China, the 2 mills with a 3rd mill under construction to increase throughput next year, and the growth planned around existing operations and well as the potential for other satellite operation, like the Kuanping Project bought in a Chinese auction, to be brought into production using a hub and spoke approach.
We have Lon outline the existing resources, which break down into 115 million ounces of proven and probable silver equivalent ounces, contained in the 210 million ounces of Ag eq. measured and indicated category, and then the additional 126 million ounces of Ag eq. in the inferred category. Those are calculated using just the silver and gold components, and don’t even factor in the lead, zinc, or copper credits, which would be in addition to those resources. The company has a long runway of productive capacity through 2037 at present, and is aggressively exploring to expand these resource with one of the larger drill programs and sheer number of drills in the sector. We also review the more recent discovery over the last 2 years of new gold/copper mineralization found at the HPG Mine and LMW Mine.
Beyond the production growth, and exploration growth, we discuss the 3rd prong of value creation from the Company’s investment in 4 other earlier stage exploration companies in Latin America, including their successful incubation of New Pacific Metals (TSX: NUAG) (NYSE: NEWP) since 2017, as well as the ongoing search for other acquisition targets. We wrap up by getting Lon to review the valuation mismatch considering their $200 in cash on the balance sheet, as well as $100 million in value just for their shares in New Pacific Metals alone, leaving all 7 of their Chinese mines that are generating revenues and cashflows, and allowing the company to pay a dividend, at only $139 million, which compares favorably to peers with a similar production profile.