Silvercorp Metals Inc. (NYSEMKT: SVM) reported mixed results for its second quarter of fiscal 2027, with revenue declining 13% to $72.1 million due to a temporary production stoppage at its China operations. The company cited government-mandated safety requirements following a major mining accident in China as the reason for the shutdown. Despite the production challenges, Silvercorp saw an 82% increase in the realized silver price, averaging $61.83 per ounce, and a 32% rise in the realized gold price to $3,955 per ounce.
The production declines were significant, with silver output dropping 45% to 0.9 million ounces and gold production falling 34% to 1,371 ounces. The company also reported an 85% decrease in zinc production due to the continued suspension of the GC Mine. However, Silvercorp maintained strong liquidity with $383.5 million in cash and equivalents, supported by a $112 million drawdown from a 1.5 billion RMB facility.
Silvercorp is pursuing several growth initiatives, including the El Domo project in Ecuador and exploration in Kyrgyzstan. However, severe weather in Ecuador has delayed construction and increased the capital budget by $14.6 million. The company is also evaluating strategic alternatives for the GC Mine, which may include a partial or complete sale. Management expects the GC Mine to resume operations only in November 2027 after regulatory compliance is achieved.
President Lon Shaver highlighted the company's strong liquidity and strategic investments, noting that the Shanghai silver price increased 72%, outperforming the London price increase of 58%. The company is also considering a nominal equity raise associated with a future Hong Kong listing to enhance trading liquidity.