Exhibit 99.1
SILVERCORP METALS INC.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the three and nine months ended December 31, 2023 and 2022
(Tabular amounts are in thousands of US dollars, unless otherwise stated)
(Unaudited)
SILVERCORP METALS INC.
Condensed Consolidated Interim Statements of Income
(Unaudited) (Expressed in thousands of U.S. dollars, except per share amount and number of shares)
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||||
Notes | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
Revenue | 3(a)(c) | $ | 58,508 | $ | 58,651 | $ | 172,506 | $ | 173,982 | |||||||||
Cost of mine operations | ||||||||||||||||||
Production costs | 22,566 | 24,603 | 68,132 | 76,145 | ||||||||||||||
Depreciation and amortization | 7,382 | 7,599 | 21,560 | 22,511 | ||||||||||||||
Mineral resource taxes | 1,372 | 1,438 | 4,335 | 4,286 | ||||||||||||||
Government fees and other taxes | 4 | 808 | 633 | 2,216 | 1,973 | |||||||||||||
General and administrative | 5 | 3,073 | 2,634 | 8,712 | 8,060 | |||||||||||||
35,201 | 36,907 | 104,955 | 112,975 | |||||||||||||||
Income from mine operations | 23,307 | 21,744 | 67,551 | 61,007 | ||||||||||||||
Corporate general and administrative | 5 | 3,228 | 3,171 | 10,688 | 10,204 | |||||||||||||
Property evaluation and business development | 562 | 173 | 785 | 376 | ||||||||||||||
Foreign exchange loss (gain) | 701 | 850 | 1,614 | (5,146 | ) | |||||||||||||
(Gain) loss on investments | 9 | (6,204 | ) | (3,010 | ) | (6,687 | ) | 1,257 | ||||||||||
Share of loss in associates | 10 | 5,680 | 677 | 7,025 | 2,176 | |||||||||||||
Dilution gain on investment in associate | 10 | - | - | (733 | ) | - | ||||||||||||
Loss on disposal of plant and equipment | 12 | 8 | 111 | 38 | 431 | |||||||||||||
Impairment of mineral rights and properties | 13 | - | - | - | 20,211 | |||||||||||||
Other expense | 1,649 | 2,507 | 2,178 | 2,276 | ||||||||||||||
Income (loss) from operations | 17,683 | 17,265 | 52,643 | 29,222 | ||||||||||||||
Finance income | 6 | 1,561 | 592 | 4,797 | 3,010 | |||||||||||||
Finance costs | 6 | (51 | ) | (661 | ) | (165 | ) | (1,256 | ) | |||||||||
19,193 | 17,196 | 57,275 | 30,976 | |||||||||||||||
Income tax expense | 7 | 5,123 | 2,259 | 15,222 | 12,157 | |||||||||||||
Net income (loss) | $ | 14,070 | $ | 14,937 | $ | 42,053 | $ | 18,819 | ||||||||||
Attributable to: | ||||||||||||||||||
Equity holders of the Company | $ | 10,510 | $ | 11,916 | $ | 30,777 | $ | 20,373 | ||||||||||
Non-controlling interests | 18 | 3,560 | 3,021 | 11,276 | (1,554 | ) | ||||||||||||
$ | 14,070 | $ | 14,937 | $ | 42,053 | $ | 18,819 | |||||||||||
Earnings per share attributable to the equity holders of the Company Basic earnings (loss) per share | $ | 0.06 | $ | 0.07 | $ | 0.17 | $ | 0.12 | ||||||||||
Diluted earnings (loss) per share | $ | 0.06 | $ | 0.07 | $ | 0.17 | $ | 0.11 | ||||||||||
Weighted Average Number of Shares Outstanding - Basic | 176,905,791 | 176,723,433 | 176,892,354 | 176,892,860 | ||||||||||||||
Weighted Average Number of Shares Outstanding - Diluted | 179,437,206 | 178,938,856 | 179,423,769 | 179,024,844 |
Approved on behalf of the Board: | |
(Signed) Ken Robertson | |
Director | |
(Signed) Rui Feng | |
Director |
See accompanying notes to the condensed consolidated interim financial statements
1
SILVERCORP METALS INC.
Condensed Consolidated Interim Statements of Comprehensive Income (loss)
(Unaudited) (Expressed in thousands of U.S. dollars)
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||||
Notes | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
Net income (loss) | $ | 14,070 | $ | 14,937 | $ | 42,053 | $ | 18,819 | ||||||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||||||||
Items that may subsequently be reclassified to net income or loss: | ||||||||||||||||||
Currency translation adjustment | 15,071 | 15,546 | (9,315 | ) | (47,964 | ) | ||||||||||||
Share of other comprehensive loss in associate | 10 | 239 | 107 | 236 | (897 | ) | ||||||||||||
Reclassification to net income upon ownership dilution of investment in associate | - | - | (34 | ) | - | |||||||||||||
Items that will not subsequently be reclassified to net income or loss: | ||||||||||||||||||
Change in fair value on equity investments designated as FVTOCI, net of tax of $nil | 9 | 113 | 59 | 5 | (1,180 | ) | ||||||||||||
Other comprehensive income (loss), net of taxes | $ | 15,423 | $ | 15,712 | $ | (9,108 | ) | $ | (50,041 | ) | ||||||||
Attributable to: | ||||||||||||||||||
Equity holders of the Company | $ | 13,237 | $ | 13,075 | $ | (6,834 | ) | $ | (43,084 | ) | ||||||||
Non-controlling interests | 18 | 2,186 | 2,637 | (2,274 | ) | (6,957 | ) | |||||||||||
$ | 15,423 | $ | 15,712 | $ | (9,108 | ) | $ | (50,041 | ) | |||||||||
Total comprehensive income (loss) | $ | 29,493 | $ | 30,649 | $ | 32,945 | $ | (31,222 | ) | |||||||||
Attributable to: | ||||||||||||||||||
Equity holders of the Company | $ | 23,747 | $ | 24,991 | $ | 23,943 | $ | (22,711 | ) | |||||||||
Non-controlling interests | 5,746 | 5,658 | 9,002 | (8,511 | ) | |||||||||||||
$ | 29,493 | $ | 30,649 | $ | 32,945 | $ | (31,222 | ) |
See accompanying notes to the condensed consolidated interim financial statements
2
SILVERCORP METALS INC.
Condensed Consolidated Interim Statements of Financial Position
(Unaudited) (Expressed in thousands of U.S. dollars)
As at December 31, | As at March 31, | |||||||||
Notes | 2023 | 2023 | ||||||||
ASSETS | ||||||||||
Current Assets | ||||||||||
Cash and cash equivalents | 21 | $ | 143,280 | $ | 145,692 | |||||
Short-term investments | 8 | 55,015 | 57,631 | |||||||
Trade and other receivables | 240 | 1,806 | ||||||||
Inventories | 11,893 | 8,343 | ||||||||
Due from related parties | 19 | 296 | 88 | |||||||
Income tax receivable | 59 | 582 | ||||||||
Prepaids and deposits | 7,120 | 4,906 | ||||||||
217,903 | 219,048 | |||||||||
Non-current Assets | ||||||||||
Long-term prepaids and deposits | 1,473 | 871 | ||||||||
Reclamation deposits | 3,934 | 6,981 | ||||||||
Other investments | 9 | 46,982 | 15,540 | |||||||
Investment in associates | 10 | 50,757 | 50,695 | |||||||
Investment properties | 11 | 482 | - | |||||||
Plant and equipment | 12 | 80,285 | 80,059 | |||||||
Mineral rights and properties | 13 | 317,282 | 303,426 | |||||||
Deferred income tax assets | - | 179 | ||||||||
TOTAL ASSETS | $ | 719,098 | $ | 676,799 | ||||||
LIABILITIES AND EQUITY | ||||||||||
Current Liabilities | ||||||||||
Accounts payable and accrued liabilities | $ | 52,539 | $ | 36,737 | ||||||
Current portion of lease obligation | 14 | 281 | 269 | |||||||
Deposits received | 4,354 | 4,090 | ||||||||
Income tax payable | 1,174 | 144 | ||||||||
58,348 | 41,240 | |||||||||
Non-current Liabilities | ||||||||||
Long-term portion of lease obligation | 14 | 117 | 314 | |||||||
Deferred income tax liabilities | 50,470 | 48,096 | ||||||||
Environmental rehabilitation | 15 | 6,457 | 7,318 | |||||||
Total Liabilities | 115,392 | 96,968 | ||||||||
Equity | ||||||||||
Share capital | 257,210 | 255,684 | ||||||||
Equity reserves | (2,220 | ) | 3,484 | |||||||
Retained earnings | 256,234 | 229,885 | ||||||||
Total equity attributable to the equity holders of the Company | 511,224 | 489,053 | ||||||||
Non-controlling interests | 18 | 92,482 | 90,778 | |||||||
Total Equity | 603,706 | 579,831 | ||||||||
TOTAL LIABILITIES AND EQUITY | $ | 719,098 | $ | 676,799 |
See accompanying notes to the condensed consolidated interim financial statements
3
SILVERCORP METALS INC.
Condensed Consolidated Interim Statements of Cash Flows
(Unaudited) (Expressed in thousands of U.S. dollars)
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||||
Notes | 2023 | 2022 | 2023 | 2022 | ||||||||||||||
Cash provided by | ||||||||||||||||||
Operating activities | ||||||||||||||||||
Net income (loss) | $ | 14,070 | $ | 14,937 | $ | 42,053 | $ | 18,819 | ||||||||||
Add (deduct) items not affecting cash: | ||||||||||||||||||
Finance costs | 6 | 51 | 661 | 165 | 1,256 | |||||||||||||
Income tax expense | 7 | 5,123 | 2,259 | 15,222 | 12,157 | |||||||||||||
Depreciation, amortization and depletion | 7,819 | 8,022 | 22,834 | 23,844 | ||||||||||||||
(Gain) loss on investments | 9 | (6,204 | ) | (3,010 | ) | (6,687 | ) | 1,257 | ||||||||||
Share of loss in associates | 10 | 5,680 | 677 | 7,025 | 2,176 | |||||||||||||
Dilution gain on investment in associate | 10 | - | - | (733 | ) | - | ||||||||||||
Impairment of mineral rights and properties | 13 | - | - | - | 20,211 | |||||||||||||
Loss on disposal of plant and equipment | 8 | 111 | 38 | 431 | ||||||||||||||
Share-based compensation | 16(b) | 765 | 841 | 3,502 | 3,133 | |||||||||||||
Reclamation expenditures | (272 | ) | (370 | ) | (533 | ) | (385 | ) | ||||||||||
Income taxes paid | (3,293 | ) | (138 | ) | (9,610 | ) | (6,783 | ) | ||||||||||
Interest paid | 6 | (5 | ) | (9 | ) | (18 | ) | (35 | ) | |||||||||
Changes in non-cash operating working capital | 21 | (135 | ) | 1,680 | 8,074 | 3,820 | ||||||||||||
Net cash provided by operating activities | 23,607 | 25,661 | 81,332 | 79,901 | ||||||||||||||
Investing activities | ||||||||||||||||||
Plant and equipment | ||||||||||||||||||
Additions | (2,157 | ) | (4,231 | ) | (8,714 | ) | (10,937 | ) | ||||||||||
Proceeds on disposals | 377 | 10 | 849 | 10 | ||||||||||||||
Mineral rights and properties | ||||||||||||||||||
Capital expenditures | (14,622 | ) | (11,466 | ) | (38,593 | ) | (34,236 | ) | ||||||||||
Reclamation deposits | ||||||||||||||||||
Paid | (336 | ) | (274 | ) | (365 | ) | (304 | ) | ||||||||||
Refund | 2,929 | - | 2,962 | - | ||||||||||||||
Other investments | ||||||||||||||||||
Acquisition | 9 | (1,246 | ) | (1,932 | ) | (23,305 | ) | (3,702 | ) | |||||||||
Proceeds on disposals | 9 | 263 | 21 | 1,103 | 525 | |||||||||||||
Investment in associates | 10 | - | (1,181 | ) | (4,982 | ) | (1,938 | ) | ||||||||||
Short-term investment | ||||||||||||||||||
Purchase | (32,000 | ) | (32,020 | ) | (61,464 | ) | (112,304 | ) | ||||||||||
Redemption | 47,566 | 26,515 | 61,103 | 164,526 | ||||||||||||||
Principal received on lease receivable | 14 | - | 53 | - | 162 | |||||||||||||
Net cash used in investing activities | 774 | (24,505 | ) | (71,406 | ) | 1,802 | ||||||||||||
Financing activities | ||||||||||||||||||
Principal payments on lease obligation | 14 | (66 | ) | (164 | ) | (195 | ) | (501 | ) | |||||||||
Cash dividends distributed | 16(e) | (2,214 | ) | (2,209 | ) | (4,428 | ) | (4,425 | ) | |||||||||
Non-controlling interests | ||||||||||||||||||
Distribution | 18 | (50 | ) | - | (7,298 | ) | (7,256 | ) | ||||||||||
Common shares repurchased as part of normal course issuer bid | (274 | ) | - | (846 | ) | (2,078 | ) | |||||||||||
Net cash used in financing activities | (2,604 | ) | (2,373 | ) | (12,767 | ) | (14,260 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | 2,405 | 5,688 | 429 | (9,904 | ) | |||||||||||||
Increase (decrease) in cash and cash equivalents | 24,182 | 4,471 | (2,412 | ) | 57,539 | |||||||||||||
Cash and cash equivalents, beginning of the period | 119,098 | 166,370 | 145,692 | 113,302 | ||||||||||||||
Cash and cash equivalents, end of the period | $ | 143,280 | $ | 170,841 | $ | 143,280 | $ | 170,841 | ||||||||||
Supplementary cash flow information | 21 |
See accompanying notes to the condensed consolidated interim financial statements
4
SILVERCORP METALS INC.
Condensed Consolidated Interim Statements of Changes in Equity
(Unaudited) (Expressed in thousands of U.S. dollars, except numbers for share figures)
Share capital | Equity reserves | Total equity | ||||||||||||||||||||||||||||||||||||
Notes | Number of shares | Amount | Share option reserve | Reserves | Accumulated other comprehensive loss | Retained earnings | attributable to the equity holders of the Company | Non-controlling interests | Total equity | |||||||||||||||||||||||||||||
Balance, April 1, 2022 | 177,105,799 | $ | 255,444 | $ | 19,369 | $ | 25,834 | $ | (1,953 | ) | $ | 213,702 | $ | 512,396 | $ | 107,718 | $ | 620,114 | ||||||||||||||||||||
Restricted share units vested | 503,703 | 2,307 | (2,307 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Share-based compensation | - | - | 3,133 | - | - | - | 3,133 | - | 3,133 | |||||||||||||||||||||||||||||
Dividends declared | - | - | - | - | - | (4,425 | ) | (4,425 | ) | - | (4,425 | ) | ||||||||||||||||||||||||||
Common shares repurchased as part of normal course issuer bid | (838,237 | ) | (2,078 | ) | - | - | - | (2,078 | ) | (2,078 | ) | |||||||||||||||||||||||||||
Contribution from non-controlling interests | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
Acquisition of La Yesca | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
Distribution to non-controlling interests | - | - | - | - | - | - | - | (7,256 | ) | (7,256 | ) | |||||||||||||||||||||||||||
Comprehensive income | - | - | - | - | (43,084 | ) | 20,373 | (22,711 | ) | (8,511 | ) | (31,222 | ) | |||||||||||||||||||||||||
Balance, December 31, 2022 | 176,771,265 | $ | 255,673 | $ | 20,195 | $ | 25,834 | $ | (45,037 | ) | $ | 229,650 | $ | 486,315 | $ | 91,951 | $ | 578,266 | ||||||||||||||||||||
Restricted share units vested | - | 11 | (11 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Share-based compensation | - | - | 709 | - | - | - | 709 | - | 709 | |||||||||||||||||||||||||||||
Distribution to non-controlling interests | - | - | - | - | - | - | (3,624 | ) | (3,624 | ) | ||||||||||||||||||||||||||||
Comprehensive income | - | - | - | - | 1,794 | 235 | 2,029 | 2,451 | 4,480 | |||||||||||||||||||||||||||||
Balance, March 31, 2023 | 176,771,265 | $ | 255,684 | $ | 20,893 | $ | 25,834 | $ | (43,243 | ) | $ | 229,885 | $ | 489,053 | $ | 90,778 | $ | 579,831 | ||||||||||||||||||||
Restricted share units vested | 580,923 | 2,372 | (2,372 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||||
Share-based compensation | 16(b) | - | - | 3,502 | - | - | - | 3,502 | - | 3,502 | ||||||||||||||||||||||||||||
Dividends declared | 16(e) | - | - | - | - | - | (4,428 | ) | (4,428 | ) | - | (4,428 | ) | |||||||||||||||||||||||||
Common shares repurchased as part of normal course issuer bid | 16(f) | (315,824 | ) | (846 | ) | - | - | - | - | (846 | ) | - | (846 | ) | ||||||||||||||||||||||||
Distribution to non-controlling interests | 18 | - | - | - | - | - | - | - | (7,298 | ) | (7,298 | ) | ||||||||||||||||||||||||||
Comprehensive income (loss) | - | - | - | - | (6,834 | ) | 30,777 | 23,943 | 9,002 | 32,945 | ||||||||||||||||||||||||||||
Balance, December 31, 2023 | 177,036,364 | $ | 257,210 | $ | 22,023 | $ | 25,834 | $ | (50,077 | ) | $ | 256,234 | $ | 511,224 | $ | 92,482 | $ | 603,706 |
See accompanying notes to the condensed consolidated interim financial statements
5
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
1. | CORPORATE INFORMATION |
Silvercorp Metals Inc., along with its subsidiary companies (collectively the “Company”), is engaged in the acquisition, exploration, development, and mining of mineral properties. The Company’s producing mines are located in China, and current exploration and development projects are located in China.
The Company is a publicly listed company incorporated in the Province of British Columbia, Canada, with limited liability under the legislation of the Province of British Columbia. The Company’s shares are traded on the Toronto Stock Exchange and NYSE American.
The head office, registered address and records office of the Company are located at 1066 West Hastings Street, Suite 1750, Vancouver, British Columbia, Canada, V6E 3X1.
2. | MATERIAL ACCOUNTING POLICY INFORMATION |
(a) | Statement of Compliance |
These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting (“IAS 34”) of the International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and have been condensed with certain disclosures from the Company’s audited consolidated financial statements for the year ended March 31, 2023. Accordingly, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended March 31, 2023. These unaudited condensed consolidated interim financial statements follow the same accounting policies set out in Note 2 to the audited consolidated financial statements for the year ended March 31, 2023 with the exception of the mandatory adoption of certain amendments noted below.
Amendment to IAS 12 - Deferred Tax related to Assets and Liabilities arising from a Single Transaction
The amendments to IAS 12 clarify that the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition.
The adoption of this amendment did not have a material impact on the Company’s condensed consolidated interim financial statements.
Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
The amendments require that an entity discloses its material accounting policies, instead of its significant accounting policies. Further amendments explain how an entity can identify a material accounting policy. Examples of when an accounting policy is likely to be material are added. To support the amendment, the IASB has also developed guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in IFRS Practice Statement 2. This amendment did not have a material impact on the Company’s condensed consolidated interim financial statements.
6
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
Amendments to IAS 8 – Definition of Accounting Estimates
The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty.”
The definition of a change in accounting estimates was deleted. However, IASB retained the concept of changes in accounting estimates in IFRS with the following clarification:
● | A change in accounting estimate that results from new information or new developments is not the correction of an error. |
● | The effects of a change in an input or a measurement technique used to develop an accounting estimate are changes in accounting estimates if they do not result from the correction of prior period errors. |
The adoption of this amendment did not have a material impact on the Company’s condensed interim consolidated financial statements.
These unaudited condensed consolidated interim financial statements were authorized for issue in accordance with a resolution of the Board of Directors of the Company dated February 6, 2024.
(b) | New Accounting Standards |
Certain new accounting standards and interpretations have been published that are not mandatory for the current period and have not been early adopted. Management is still evaluating and does not expect any such pronouncements to have a material impact on the Company’s consolidated financial statements upon adoption.
(c) | Basis of Consolidation |
These condensed consolidated interim financial statements include the accounts of the Company and its wholly or partially owned subsidiaries.
Subsidiaries are consolidated from the date on which the Company obtains control up to the date of the disposition of control. Control is achieved when the Company has power over the subsidiary, is exposed or has rights to variable returns from its involvement with the subsidiary and has the ability to use its power to affect its returns.
For non-wholly owned subsidiaries over which the Company has control, the net assets attributable to outside equity shareholders are presented as “non-controlling interests” in the equity section of the condensed consolidated interim statements of financial position. Net income for the period that is attributable to the non-controlling interests is calculated based on the ownership of the non-controlling interest shareholders in the subsidiary. Adjustments to recognize the non-controlling interests’ share of changes to the subsidiary’s equity are made even if this results in the non-controlling interests having a deficit balance. Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are recorded as equity transactions. The carrying amount of non-controlling interests is adjusted to reflect the change in the non-controlling interests’ relative interests in the subsidiary and the difference between the adjustment to the carrying amount of non-controlling interest and the Company’s share of proceeds received and/or consideration paid is recognized directly in equity and attributed to equity holders of the Company.
7
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
Balances, transactions, revenues and expenses between the Company and its subsidiaries are eliminated on consolidation.
Details of the Company’s significant subsidiaries which are consolidated are as follows:
Proportion of ownership interest held | |||||||||||||||
Country of | December 31, | March 31, | |||||||||||||
Name of subsidiaries | Principal activity | incorporation | 2023 | 2023 | Mineral properties | ||||||||||
Silvercorp Metals China Inc. | Holding company | Canada | 100% | 100% | |||||||||||
Silvercorp Metals (China) Inc. | Holding company | China | 100% | 100% | |||||||||||
0875786 B.C. LTD. | Holding company | Canada | 100% | 100% | |||||||||||
Fortune Mining Limited | Holding company | BVI (i) | 100% | 100% | |||||||||||
Fortune Copper Limited | Holding company | BVI | 100% | 100% | |||||||||||
Fortune Gold Mining Limited | Holding company | BVI | 100% | 100% | |||||||||||
Victor Resources Ltd. | Holding company | BVI | 100% | 100% | |||||||||||
Yangtze Mining Ltd. | Holding company | BVI | 100% | 100% | |||||||||||
Victor Mining Ltd. | Holding company | BVI | 100% | 100% | |||||||||||
Yangtze Mining (H.K.) Ltd. | Holding company | Hong Kong | 100% | 100% | |||||||||||
Fortune Gold Mining (H.K.) Limited | Holding company | Hong Kong | 100% | 100% | |||||||||||
Wonder Success Limited | Holding company | Hong Kong | 100% | 100% | |||||||||||
New Infini Silver Inc. (“New Infini”) | Holding company | Canada | 46.1% | 46.1% | |||||||||||
Infini Metals Inc. | Holding company | BVI | 46.1% | 46.1% | |||||||||||
Infini Resources (Asia) Co. Ltd. | Holding company | Hong Kong | 46.1% | 46.1% | |||||||||||
Golden Land (Asia) Ltd. | Holding company | Hong Kong | 46.1% | 46.1% | |||||||||||
Henan Huawei Mining Co. Ltd. (“Henan Huawei”) | Mining | China | 80% | 80% | Ying Mining District | ||||||||||
Henan Found Mining Co. Ltd. (“Henan Found”) | Mining | China | 77.5% | 77.5% | |||||||||||
Xinshao Yunxiang Mining Co., Ltd. (“Yunxiang”) | Mining | China | 70% | 70% | BYP | ||||||||||
Guangdong Found Mining Co. Ltd. (“Guangdong Found”) | Mining | China | 99% | 99% | GC | ||||||||||
Infini Resources S.A. de C.V. | Mining | Mexico | 46.1% | 46.1% | La Yesca | ||||||||||
Shanxi Xinbaoyuan Mining Co., Ltd. (“Xinbaoyuan”) | Mining | China | 77.5% | 77.5% | Kuanping |
(i) | British Virgin Islands (“BVI”) |
(d) | Critical Accounting Judgments and Estimates |
These condensed consolidated interim financial statements follow the same significant accounting judgments and estimates set out in note 2 to the audited consolidated financial statements for the year ended March 31, 2023.
3. | SEGMENTED INFORMATION |
The Company’s reportable operating segments are components of the Company where separate financial information is available that is evaluated regularly by the Company’s Chief Executive Officer who is the Chief Operating Decision Maker (“CODM”). The operating segments are determined based on the Company’s management and internal reporting structure. Operating segments are summarized as follows:
Operating Segments | Subsidiaries Included in the Segment | Properties Included in the Segment | ||
Mining | ||||
Henan Luoning | Henan Found and Huawei | Ying Mining District | ||
Guangdong | Guandong Found | GC | ||
Other | Yunxiang, Xinbaoyuan, and Infini Resources S.A de C.V | BYP, Kuanping, La Yesca | ||
Adminstravtive | ||||
Vancouver | Silvercorp Metals Inc and holding companies | |||
Bejing | Silvercorp Metals (China) Inc. |
8
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
(a) | Segmented information for operating results |
Segmented operating results for the three months ended December 31, 2023 and 2022 are summarized as follows:
Three months ended December 31, 2023 | ||||||||||||||||||||||||
Mining | Administrative | |||||||||||||||||||||||
Statement of operations: | Henan Luoning | Guangdong | Other | Beijing | Vancouver | Total | ||||||||||||||||||
Revenue | $ | 49,427 | $ | 9,081 | $ | - | $ | - | $ | - | $ | 58,508 | ||||||||||||
Costs of mine operations | (27,941 | ) | (7,169 | ) | (91 | ) | - | - | (35,201 | ) | ||||||||||||||
Income (loss) from mine operations | 21,486 | 1,912 | (91 | ) | - | - | 23,307 | |||||||||||||||||
Operating (expenses) income | (1,778 | ) | 101 | 37 | (517 | ) | (3,467 | ) | (5,624 | ) | ||||||||||||||
Finance items | 600 | 100 | (7 | ) | 45 | 772 | 1,510 | |||||||||||||||||
Income tax expenses | (3,603 | ) | (435 | ) | - | - | (1,085 | ) | (5,123 | ) | ||||||||||||||
Net income (loss) | $ | 16,705 | $ | 1,678 | $ | (61 | ) | $ | (472 | ) | $ | (3,780 | ) | $ | 14,070 | |||||||||
Attributed to: | ||||||||||||||||||||||||
Equity holders of the Company | 13,133 | 1,662 | (33 | ) | (472 | ) | (3,780 | ) | 10,510 | |||||||||||||||
Non-controlling interests | 3,572 | 16 | (28 | ) | - | - | 3,560 | |||||||||||||||||
Net income (loss) | $ | 16,705 | $ | 1,678 | $ | (61 | ) | $ | (472 | ) | $ | (3,780 | ) | $ | 14,070 |
Three months ended December 31, 2022 | ||||||||||||||||||||||||
Mining | Administrative | |||||||||||||||||||||||
Statement of operations: | Henan Luoning | Guangdong | Other | Beijing | Vancouver | Total | ||||||||||||||||||
Revenue | $ | 48,808 | $ | 9,843 | $ | - | $ | - | $ | - | $ | 58,651 | ||||||||||||
Costs of mine operations | (29,833 | ) | (6,974 | ) | (100 | ) | - | - | (36,907 | ) | ||||||||||||||
Income (loss) from mine operations | 18,975 | 2,869 | (100 | ) | - | - | 21,744 | |||||||||||||||||
Operating expenses | (2,521 | ) | (147 | ) | 90 | (460 | ) | (1,441 | ) | (4,479 | ) | |||||||||||||
Finance items | 108 | 43 | (7 | ) | 56 | (269 | ) | (69 | ) | |||||||||||||||
Income tax expenses | (2,284 | ) | (16 | ) | (1 | ) | - | 42 | (2,259 | ) | ||||||||||||||
Net income (loss) | $ | 14,278 | $ | 2,749 | $ | (18 | ) | $ | (404 | ) | $ | (1,668 | ) | $ | 14,937 | |||||||||
Attributed to: | ||||||||||||||||||||||||
Equity holders of the Company | 11,268 | 2,722 | (4 | ) | (404 | ) | (1,666 | ) | 11,916 | |||||||||||||||
Non-controlling interests | 3,010 | 27 | (14 | ) | - | (2 | ) | 3,021 | ||||||||||||||||
Net income (loss) | $ | 14,278 | $ | 2,749 | $ | (18 | ) | $ | (404 | ) | $ | (1,668 | ) | $ | 14,937 |
9
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
Segmented operating results for the three nine ended December 31, 2023 and 2022 are summarized as follows:
Nine months ended December 31, 2023 | ||||||||||||||||||||||||
Mining | Administrative | |||||||||||||||||||||||
Statement of income: | Henan Luoning | Guangdong | Other | Beijing | Vancouver | Total | ||||||||||||||||||
Revenue | $ | 149,842 | $ | 22,664 | $ | - | $ | - | $ | - | $ | 172,506 | ||||||||||||
Costs of mine operations | (84,825 | ) | (19,828 | ) | (302 | ) | - | - | (104,955 | ) | ||||||||||||||
Income (loss) from mine operations | 65,017 | 2,836 | (302 | ) | - | - | 67,551 | |||||||||||||||||
Operating expenses | (2,485 | ) | 215 | (44 | ) | (1,529 | ) | (11,065 | ) | (14,908 | ) | |||||||||||||
Finance items, net | 1,764 | 360 | (21 | ) | 130 | 2,399 | 4,632 | |||||||||||||||||
Income tax expenses | (11,376 | ) | (264 | ) | - | - | (3,582 | ) | (15,222 | ) | ||||||||||||||
Net income (loss) | $ | 52,920 | $ | 3,147 | $ | (367 | ) | $ | (1,399 | ) | $ | (12,248 | ) | $ | 42,053 | |||||||||
Attributable to: | ||||||||||||||||||||||||
Equity holders of the Company | 41,531 | 3,117 | (230 | ) | (1,399 | ) | (12,242 | ) | 30,777 | |||||||||||||||
Non-controlling interests | 11,389 | 30 | (137 | ) | - | (6 | ) | 11,276 | ||||||||||||||||
Net income (loss) | $ | 52,920 | $ | 3,147 | $ | (367 | ) | $ | (1,399 | ) | $ | (12,248 | ) | $ | 42,053 |
Nine months ended December 31, 2022 | ||||||||||||||||||||||||
Mining | Administrative | |||||||||||||||||||||||
Statement of income: | Henan Luoning | Guangdong | Other | Beijing | Vancouver | Total | ||||||||||||||||||
Revenue | $ | 145,729 | $ | 28,253 | $ | - | $ | - | $ | - | $ | 173,982 | ||||||||||||
Costs of mine operations | (92,414 | ) | (20,225 | ) | (336 | ) | - | - | (112,975 | ) | ||||||||||||||
Income (loss) from mine operations | 53,315 | 8,028 | (336 | ) | - | - | 61,007 | |||||||||||||||||
Operating expenses | (2,505 | ) | (292 | ) | (117 | ) | (1,364 | ) | (7,296 | ) | (11,574 | ) | ||||||||||||
Impairment of mineral rights and properties | - | - | (20,211 | ) | - | - | (20,211 | ) | ||||||||||||||||
Finance items, net | 1,669 | 314 | (22 | ) | 206 | (413 | ) | 1,754 | ||||||||||||||||
Income tax expenses | (9,025 | ) | (680 | ) | 61 | - | (2,513 | ) | (12,157 | ) | ||||||||||||||
Net income (loss) | $ | 43,454 | $ | 7,370 | $ | (20,625 | ) | $ | (1,158 | ) | $ | (10,222 | ) | $ | 18,819 | |||||||||
Attributable to: | ||||||||||||||||||||||||
Equity holders of the Company | 34,061 | 7,298 | (9,922 | ) | (1,158 | ) | (9,906 | ) | 20,373 | |||||||||||||||
Non-controlling interests | 9,393 | 72 | (10,703 | ) | - | (316 | ) | (1,554 | ) | |||||||||||||||
Net income (loss) | $ | 43,454 | $ | 7,370 | $ | (20,625 | ) | $ | (1,158 | ) | $ | (10,222 | ) | $ | 18,819 |
10
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
(b) | Segmented information for assets and liabilities as at December 31, 2023 and 2022 is summarized as follows: |
December 31, 2023 | ||||||||||||||||||||||||
Mining | Administrative | |||||||||||||||||||||||
Statement of financial position items: | Henan Luoning | Guangdong | Other | Beijing | Vancouver | Total | ||||||||||||||||||
Current assets | $ | 128,046 | $ | 10,089 | $ | 1,013 | $ | 7,656 | $ | 71,099 | $ | 217,903 | ||||||||||||
Plant and equipment | 61,871 | 14,213 | 3,016 | 524 | 661 | 80,285 | ||||||||||||||||||
Mineral rights and properties | 263,497 | 34,015 | 19,770 | - | - | 317,282 | ||||||||||||||||||
Investment in associates | - | - | - | - | 50,757 | 50,757 | ||||||||||||||||||
Other investments | 63 | - | - | - | 46,919 | 46,982 | ||||||||||||||||||
Reclamation deposits | 853 | 3,073 | - | - | 8 | 3,934 | ||||||||||||||||||
Long-term prepaids and deposits | 951 | 118 | 93 | - | 311 | 1,473 | ||||||||||||||||||
Investment properties | 482 | - | - | - | - | 482 | ||||||||||||||||||
Total assets | $ | 455,763 | $ | 61,508 | $ | 23,892 | $ | 8,180 | $ | 169,755 | $ | 719,098 | ||||||||||||
Current liabilities | $ | 48,808 | $ | 6,064 | $ | 385 | $ | 274 | $ | 2,817 | $ | 58,348 | ||||||||||||
Long-term portion of lease obligation | - | - | $ | - | - | 117 | 117 | |||||||||||||||||
Deferred income tax liabilities | 49,406 | 66 | $ | 998 | - | - | 50,470 | |||||||||||||||||
Environmental rehabilitation | 4,142 | 1,368 | $ | 947 | - | - | 6,457 | |||||||||||||||||
Total liabilities | $ | 102,356 | $ | 7,498 | $ | 2,330 | $ | 274 | $ | 2,934 | $ | 115,392 |
March 31, 2023 | ||||||||||||||||||||||||
Mining | Administrative | |||||||||||||||||||||||
Statement of financial position items: | Henan Luoning | Guangdong | Other | Beijing | Vancouver | Total | ||||||||||||||||||
Current assets | $ | 112,936 | $ | 20,605 | $ | 1,149 | $ | 7,608 | $ | 76,750 | $ | 219,048 | ||||||||||||
Plant and equipment | 59,854 | 15,289 | 3,314 | 644 | 958 | 80,059 | ||||||||||||||||||
Mineral rights and properties | 251,150 | 32,070 | 20,206 | - | - | 303,426 | ||||||||||||||||||
Investment in associates | - | - | - | - | 50,695 | 50,695 | ||||||||||||||||||
Other investments | 65 | - | - | - | 15,475 | 15,540 | ||||||||||||||||||
Reclamation deposits | 3,626 | 3,348 | - | - | 7 | 6,981 | ||||||||||||||||||
Long-term prepaids and deposits | 686 | 89 | 96 | - | - | 871 | ||||||||||||||||||
Deferred income tax assets | - | 179 | - | - | - | 179 | ||||||||||||||||||
Total assets | $ | 428,317 | $ | 71,580 | $ | 24,765 | $ | 8,252 | $ | 143,885 | $ | 676,799 | ||||||||||||
Current liabilities | $ | 33,102 | $ | 5,509 | $ | 433 | $ | 226 | $ | 1,970 | $ | 41,240 | ||||||||||||
Long-term portion of lease obligation | - | - | - | - | 314 | 314 | ||||||||||||||||||
Deferred income tax liabilities | 47,065 | - | 1,031 | - | - | 48,096 | ||||||||||||||||||
Environmental rehabilitation | 4,883 | 1,477 | 958 | - | - | 7,318 | ||||||||||||||||||
Total liabilities | $ | 85,050 | $ | 6,986 | $ | 2,422 | $ | 226 | $ | 2,284 | $ | 96,968 |
11
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
(c) | Revenue by metal |
Revenue generated for the three months ended December 31, 2023 and 2022 were all earned in China and were comprised of:
Three months ended December 31, 2023 | ||||||||||||
Henan Luoning | Guangdong | Total | ||||||||||
Gold | $ | 2,305 | $ | - | $ | 2,305 | ||||||
Silver | 31,700 | 2,605 | 34,305 | |||||||||
Lead | 12,429 | 1,782 | 14,211 | |||||||||
Zinc | 1,881 | 4,155 | 6,036 | |||||||||
Other | 1,112 | 539 | 1,651 | |||||||||
$ | 49,427 | $ | 9,081 | $ | 58,508 |
Three months ended December 31, 2022 | ||||||||||||
Henan Luoning | Guangdong | Total | ||||||||||
Gold | $ | 1,695 | $ | - | $ | 1,695 | ||||||
Silver | 29,403 | 2,514 | 31,917 | |||||||||
Lead | 14,401 | 1,944 | 16,345 | |||||||||
Zinc | 2,182 | 4,639 | 6,821 | |||||||||
Other | 1,127 | 746 | 1,873 | |||||||||
$ | 48,808 | $ | 9,843 | $ | 58,651 |
Revenue generated for the nine months ended December 31, 2023 and 2022 were all earned in China and were comprised of:
Nine months ended December 31, 2023 | ||||||||||||
Henan Luoning | Guangdong | Total | ||||||||||
Gold | $ | 9,385 | $ | - | $ | 9,385 | ||||||
Silver | 94,051 | 6,559 | 100,610 | |||||||||
Lead | 37,433 | 4,500 | 41,933 | |||||||||
Zinc | 5,408 | 9,902 | 15,310 | |||||||||
Other | 3,565 | 1,703 | 5,268 | |||||||||
$ | 149,842 | $ | 22,664 | $ | 172,506 |
Nine months ended December 31, 2022 | ||||||||||||
Henan Luoning | Guangdong | Total | ||||||||||
Gold | $ | 5,027 | $ | - | $ | 5,027 | ||||||
Silver | 87,793 | 6,288 | 94,081 | |||||||||
Lead | 42,730 | 5,430 | 48,160 | |||||||||
Zinc | 6,849 | 14,892 | 21,741 | |||||||||
Other | 3,330 | 1,643 | 4,973 | |||||||||
145,729 | $ | 28,253 | $ | 173,982 |
12
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
(d) | Major customers |
Revenue from major customers is summarized as follows:
Nine months ended December 31, 2023 | ||||||||||||||||
Customers | Henan Luoning | Guangdong | Total | Percentage of total revenue | ||||||||||||
Customer A | $ | 40,737 | $ | 3,860 | $ | 44,597 | 26 | % | ||||||||
Customer B | 39,763 | - | 39,763 | 23 | % | |||||||||||
Customer C | 14,556 | 1,737 | 16,293 | 9 | % | |||||||||||
Customer D | 32,830 | - | 32,830 | 19 | % | |||||||||||
Customer E | 14,406 | 2,693 | 17,099 | 10 | % | |||||||||||
$ | 142,292 | $ | 8,290 | $ | 150,582 | 87 | % |
Nine months ended December 31, 2022 | ||||||||||||||||
Customers | Henan Luoning | Guangdong | Total | Percentage of total revenue | ||||||||||||
Customer A | $ | 24,133 | $ | - | $ | 24,133 | 14 | % | ||||||||
Customer B | 26,565 | - | 26,565 | 15 | % | |||||||||||
Customer C | 38,003 | 686 | 38,689 | 22 | % | |||||||||||
Customer D | 35,654 | - | 35,654 | 20 | % | |||||||||||
Customer E | 10,406 | 1,431 | 11,837 | 7 | % | |||||||||||
$ | 134,761 | $ | 2,117 | $ | 136,878 | 78 | % |
4. | GOVERNMENT FEES AND OTHER TAXES |
Government fees and other taxes consist of:
Three months ended December 31, | Nine months ended December 31, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Government fees | $ | 11 | $ | 15 | $ | 40 | $ | 51 | ||||||||
Other taxes | 797 | 618 | 2,176 | 1,922 | ||||||||||||
$ | 808 | $ | 633 | $ | 2,216 | $ | 1,973 |
Government fees include environmental protection fees paid to the state and local Chinese government. Other taxes were composed of surtax on value-added tax, land usage levy, stamp duty and other miscellaneous levies, duties and taxes imposed by the state and local Chinese government.
13
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
5. | GENERAL AND ADMINISTRATIVE |
General and administrative expenses consist of:
Three months ended December 31, 2023 | Three months ended December 31, 2022 | |||||||||||||||||||||||
Corporate | Mines | Total | Corporate | Mines | Total | |||||||||||||||||||
Amortization and depreciation | $ | 146 | $ | 290 | $ | 436 | $ | 139 | $ | 285 | $ | 424 | ||||||||||||
Office and administrative expenses | 362 | 887 | 1,249 | 511 | 652 | 1,163 | ||||||||||||||||||
Professional fees | 307 | 251 | 558 | 239 | 97 | 336 | ||||||||||||||||||
Salaries and benefits | 1,648 | 1,645 | 3,293 | 1,441 | 1,600 | 3,041 | ||||||||||||||||||
Share-based compensation | 765 | - | 765 | 841 | - | 841 | ||||||||||||||||||
$ | 3,228 | $ | 3,073 | $ | 6,301 | $ | 3,171 | $ | 2,634 | $ | 5,805 |
Nine months ended December 31, 2023 | Nine months ended December 31, 2022 | |||||||||||||||||||||||
Corporate | Mines | Total | Corporate | Mines | Total | |||||||||||||||||||
Amortization and depreciation | $ | 442 | $ | 831 | $ | 1,273 | $ | 430 | $ | 903 | $ | 1,333 | ||||||||||||
Office and administrative expenses | 1,419 | 2,435 | 3,854 | 1,326 | 2,038 | 3,364 | ||||||||||||||||||
Professional fees | 721 | 478 | 1,199 | 602 | 330 | 932 | ||||||||||||||||||
Salaries and benefits | 4,604 | 4,968 | 9,572 | 4,713 | 4,789 | 9,502 | ||||||||||||||||||
Share-based compensation | 3,502 | - | 3,502 | 3,133 | - | 3,133 | ||||||||||||||||||
$ | 10,688 | $ | 8,712 | $ | 19,400 | $ | 10,204 | $ | 8,060 | $ | 18,264 |
6. | FINANCE ITEMS |
Finance items consist of:
Three months ended December 31, | Nine months ended December 31, | |||||||||||||||
Finance income | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Interest income | $ | 1,561 | $ | 516 | $ | 4,797 | $ | 2,934 | ||||||||
Dividend income | - | 76 | - | 76 | ||||||||||||
Interest income | $ | 1,561 | $ | 592 | $ | 4,797 | $ | 3,010 |
Three months ended December 31, | Nine months ended December 31, | |||||||||||||||
Finance costs | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Interest on lease obligation | $ | 5 | 9 | $ | 18 | $ | 35 | |||||||||
Impairment charges for expected credit loss against bond investments (Note 8) | - | 501 | - | 946 | ||||||||||||
Loss on disposal of bonds | - | 93 | 93 | |||||||||||||
Unwinding of discount of environmental rehabilitation provision (Note 15) | 46 | 58 | 147 | 182 | ||||||||||||
$ | 51 | $ | 661 | $ | 165 | $ | 1,256 |
7. | INCOME TAX |
The significant components of income tax expense are as follows:
Three months ended December 31, | Nine months ended December 31, | |||||||||||||||
Income tax expense | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Current | $ | 3,784 | $ | 1,235 | $ | 11,152 | $ | 7,646 | ||||||||
Deferred | 1,339 | 1,024 | 4,070 | 4,511 | ||||||||||||
$ | 5,123 | $ | 2,259 | $ | 15,222 | $ | 12,157 |
14
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
8. | SHORT-TERM INVESTMENTS |
Short-term investments consist of the following:
Carraying Value | Interest rates | Maturity | ||||||||
As at December 31, 2023 | ||||||||||
Bonds | $ | 1,403 | 5.5% - 6.9% | June 9, 2024 - January 16, 2025 | ||||||
Money market instruments | 53,612 | |||||||||
$ | 55,015 | |||||||||
As at March 31, 2023 | ||||||||||
Bonds | $ | 3,802 | 5.5% - 13.0% | January 25, 2023 - January 16, 2025 | ||||||
Money market instruments | 53,829 | |||||||||
$ | 57,631 |
9. | OTHER INVESTMENTS |
December 31, 2023 | March 31, 2023 | |||||||
Investments designated as FVTOCI | ||||||||
Public companies | $ | 870 | $ | 918 | ||||
Private companies | 63 | 65 | ||||||
933 | 983 | |||||||
Investments designated as FVTPL | ||||||||
Public companies | 42,814 | 11,396 | ||||||
Private companies | 3,235 | 3,161 | ||||||
46,049 | 14,557 | |||||||
Total | $ | 46,982 | $ | 15,540 |
The Company makes irrevocable elections, on an instrument-by-instrument basis, to designate other investment as fair value to profit and loss (“FVTPL”) or fair value to other comprehensive income (“FVTOCI”).
15
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
The continuity of such investments is as follows:
Fair Value | Accumulated fair value change included in OCI | Accumulated fair value change included in P&L | ||||||||||
April 1, 2022 | $ | 17,768 | $ | (24,336 | ) | $ | 3,703 | |||||
Loss on equity investments designated as FVTOCI | (1,312 | ) | (1,312 | ) | - | |||||||
Loss on equity investments designated as FVTPL | (2,318 | ) | - | (2,318 | ) | |||||||
Acquisition | 3,702 | - | - | |||||||||
Disposal | (1,035 | ) | - | - | ||||||||
Impact of foreign currency translation | (1,265 | ) | - | - | ||||||||
March 31, 2023 | $ | 15,540 | $ | (25,648 | ) | $ | 1,385 | |||||
Gain on equity investments designated as FVTOCI | 5 | 5 | - | |||||||||
Gain on equity investments designated as FVTPL | 7,975 | - | 7,975 | |||||||||
Acquisition | 23,305 | - | - | |||||||||
Disposal | (1,103 | ) | - | - | ||||||||
Impact of foreign currency translation | 1,260 | - | - | |||||||||
December 31, 2023 | $ | 46,982 | $ | (25,643 | ) | $ | 9,360 |
On August 6, 2023, the Company and OreCorp Limited (ASX: ORR) (“OreCorp”) announced the signing of a binding scheme implementation deed (the “Agreement”) whereby the Company will acquire all fully-paid ordinary shares of OreCorp not held by the Company or its associates (the “OreCorp Shares”), pursuant to an Australian scheme of arrangement under Part 5.1 of the Corporation Act 2001(Cth) (the “Scheme”), subject to the satisfaction and/or waiver of various conditions, whereby each holder of OreCorp Shares will receive, for each OreCorp Share held, 0.15 Australian dollar (“A$”) in cash and 0.0967 of a Silvercorp common share.
Concurrently with entering into the Agreement, the Company and OreCorp entered into a placement agreement, whereby Silvercorp agreed to purchase 70,411,334 new fully-paid ordinary shares of OreCorp at a price of A$0.40 per OreCorp Share for aggregate proceeds of approximately $18.5 million (A$28.0 million). The placement was completed in August 2023, and as a result, the Company held approximately 15% of the total outstanding ordinary shares of OreCorp. Subsequent to the private placement, the Company acquired additional 3,477,673 OreCorp Shares on the market through the Australian Securities Exchange (the “ASX”) for approximately $1.1 million, and as of December 31, 2023, the Company held 73,889,007 OreCorp Shares, representing 15.74% of the total outstanding ordinary shares of OreCorp.
The Agreement and the Scheme were amended and restated on November 23, 2023 (the “Amending Deed”) to increase the cash consideration from A$0.15 to A$0.19 with no change to the share consideration, being 0.0967 of a Silvercorp common share, for each OreCorp Share.
On December 26, 2023, the Company and OreCorp have entered into a Bid Implementation Deed (“BID”), pursuant to which Silvercorp has agreed to acquire, by means of an off-market takeover offer, all of the OreCorp Shares not already owned by Silvercorp for consideration comprising 0.0967 common shares of Silvercorp and A$0.19 cash per OreCorp Share (the “Consideration”).
16
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
Under the BID, Silvercorp and OreCorp have provided undertakings to each other to facilitate the Transaction. The offer is subject to minimal conditions, including:
● | Silvercorp having a relevant interest in at least 50.1% of the OreCorp Shares (not yet met); |
● | no regulatory action which could reasonably be expected to restrain, impede or prohibit the Offer and completion of the Transaction; |
● | no OreCorp material adverse change or prescribed occurrence (both terms defined in a customary manner); and |
● | normal course listing approval for the new Silvercorp Shares to be issued (conditional approval from Toronto Stock Exchange and authorization of the Company’s supplemental listing application from NYSE American received). |
The OreCorp Board is unanimously recommending that OreCorp shareholders accept the Offer subject to their Independent Expert’s Report concluding, and continuing to conclude, that the Offer is reasonable to OreCorp shareholders and there being no Superior Proposal. Subject to those same qualifications, the OreCorp Board, who collectively hold 3.94% of the OreCorp Shares, intends to accept the offer in respect of all OreCorp Shares they own or control.
The BID includes market standard deal protection measures equivalent to those previously agreed under the Scheme, including “no talk” and “no due diligence” provisions (subject to a fiduciary out exception) and “no shop”. It also includes notification and matching rights for Silvercorp in the event of a competing proposal. Pursuant to these deal protection measures, OreCorp has agreed, inter alia that it will not solicit, encourage or initiate any competing proposal and further, that it will not participate in any discussions or negotiations with a third party in relation to any competing proposal (unless certain conditions are satisfied, including where a failure to do so would constitute a breach of the OreCorp Board’s fiduciary duties or statutory obligations).
As with the Scheme, under certain circumstances a break fee of approximately A$2.8 million will be payable by OreCorp to Silvercorp if the BID is terminated.
The offer is not subject to the approval of the Silvercorp’s shareholders and is not subject to any financing or due diligence conditions.
In conjunction with the execution of the BID, Silvercorp and OreCorp have mutually agreed to terminate the Agreement and the Amending Deed.
The off-market takeover offer document was dispatched to OreCorp shareholders on January 15, 2024 and since then, the offer is open for acceptance by OreCorp shareholders until February 23, 2024 (Sydney time), unless extended.
On February 1, 2024, the Company announced that it received a Merger Clearance Certificate (dated January 30, 2024) from the Tanzanian Fair Competition Commission (the “FCC”) providing unconditional merger control approval for the Transaction. This approval represents the sole Tanzanian regulatory requirements needed to complete the Transaction and clears any possibility of the potential breach of the “no regulatory action” condition as stated in the BID.
17
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
10. | INVESTMENT IN ASSOCIATES |
Amount | Market value per quoted share prices | |||||||
Balance, April 1, 2022 | $ | 56,841 | $ | 146,483 | ||||
Purchase from open market | 874 | |||||||
Paricipation in financing | 1,181 | |||||||
Share of net loss | (2,901 | ) | ||||||
Share of other comprehensive loss | (886 | ) | ||||||
Dilution loss | (107 | ) | ||||||
Foreign exchange impact | (4,307 | ) | ||||||
Balance, March 31, 2023 | $ | 50,695 | $ | 126,398 | ||||
Participation in financing | 4,982 | |||||||
Dilution Gain | 733 | |||||||
Share of net loss | (7,025 | ) | ||||||
Share of other comprehensive loss | 236 | |||||||
Foreign exchange impact | 1,136 | |||||||
Balance, December 31, 2023 | $ | 50,757 | $ | 92,534 |
(a) | Investment in New Pacific Metals Corp. |
New Pacific Metals Corp. (“NUAG”) is a Canadian public company listed on the Toronto Stock Exchange (symbol: NUAG) and NYSE American (symbol: NEWP). The Company accounts for its investment in NUAG using the equity method as it is able to exercise significant influence over the financial and operating policies of NUAG.
In September 2023, the Company participated in a bought deal financing of common shares of NUAG to acquire an additional 2,541,890 common shares of NUAG for a cost of approximately $5.0 million. As a result of the financing, the Company’s ownership in NUAG was diluted to 27.4% and a dilution gain of $0.7 million was recorded on the unaudited condensed consolidated interim statements of income.
As at December 31, 2023, the Company owned 46,893,506 common shares of NUAG (March 31, 2023 – 44,351,616), representing an ownership interest of 27.4% (March 31, 2023 – 28.2%).
As at December 31, 2023, the carrying value of the investment in NUAG was $48.9 million (March 31, 2023 - $42.3 million), while the market value based on the quoted market price of NUAG’s common share was $89.0 million.
(b) | Investment in Tincorp Metals Inc. |
Tincorp Metals Inc. (“TIN”), formerly Whitehorse Gold Corp., is a Canadian public company listed on the TSX Venture Exchange (symbol: TIN). The Company accounts for its investment in TIN using the equity method as it is able to exercise significant influence over the financial and operating policies of TIN.
On December 15, 2022, the Company participated in a non-brokered private placement of TIN and purchased 4,000,000 units at a cost of $1.2 million. Each unit was comprised of one TIN common share and one-half common share purchase warrant at exercise price of CAD$0.65 per share. The common share purchase warrant expires on December 15, 2024.
18
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
As at December 31, 2023, the Company owned 19,514,285 common shares of TIN (March 31, 2023 – 19,514,285), representing an ownership interest of 29.3% (March 31, 2023 – 29.3%).
As at December 31, 2023, the carrying value of the investment in TIN was $1.9 million (March 31, 2023 - $7.4 million), while the market value based on the quoted market price of TIN’s common share was $3.5 million (March 31, 2023 - $6.8 million).
Subsequent to December 31, 2023, the Company and TIN entered into an interest-free unsecured credit facility agreement with no conversion features (the “Facility”) to allow TIN to advance up to $1.0 million from the Company. Upon signing the Facility, the Company advanced $0.5 million to TIN and received 350,000 common shares of TIN as the Bonus Shares for granting the Facility. The Facility has a maturity date of January 31, 2025.
11. | INVESTMENT PROPERTIES |
Investment properties consist of:
Cost | Total | |||
Balance, March 31, 2023 | $ | - | ||
Additions | 287 | |||
Transfer from property, plant, and equipment | 838 | |||
Impact of foreign currency translation | 9 | |||
Balance, December 31, 2023 | $ | 1,134 | ||
Accumulated depreciation and amortization | ||||
Balance, March 31, 2023 | $ | - | ||
Depreciation and amortization | (29 | ) | ||
Transfer from property, plant, and equipment | (619 | ) | ||
Impact of foreign currency translation | (4 | ) | ||
Balance, December 31, 2023 | $ | (652 | ) | |
Carrying amounts | ||||
Balance, March 31, 2023 | $ | - | ||
Balance, December 31, 2023 | $ | 482 |
Investment properties include real estate properties that are rented out to earn rental income. The investment properties were initially recorded at cost, and subsequently measured at cost less accumulated depreciation. Depreciation is computed on a straight-line basis based on the nature and an estimated 20 years’ useful life of the asset. The Company did not engage an independent valuer to value the properties, and the fair value of the properties estimated based on the quoted market prices for the similar real estate properties in the nearby neighborhoods were approximately $2.8 million as at December 31,2023.
During the three and nine months ended December 31, 2023, the Company recorded rental income of $0.03 million and $0.09 million, which was included in other expense on the unaudited condensed consolidated interim statements of income.
19
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
12. | PLANT AND EQUIPMENT |
Plant and equipment consist of:
Cost | Land use rights and building | Office equipment | Machinery | Motor vehicles | Construction in progress | Total | ||||||||||||||||||
Balance as at April 1, 2022 | $ | 117,247 | $ | 11,009 | $ | 34,379 | $ | 8,313 | $ | 2,603 | $ | 173,551 | ||||||||||||
Additions | 499 | 1,169 | 3,097 | 879 | 9,925 | 15,569 | ||||||||||||||||||
Disposals | (985 | ) | (511 | ) | (1,085 | ) | (494 | ) | - | (3,075 | ) | |||||||||||||
Reclassification of asset groups | 4,400 | 33 | 655 | - | (5,088 | ) | - | |||||||||||||||||
Impact of foreign currency translation | (9,040 | ) | (821 | ) | (2,672 | ) | (636 | ) | (212 | ) | (13,381 | ) | ||||||||||||
Balance as at March 31, 2023 | $ | 112,121 | $ | 10,879 | $ | 34,374 | $ | 8,062 | $ | 7,228 | $ | 172,664 | ||||||||||||
Additions | 144 | 575 | 1,704 | 505 | 6,890 | 9,818 | ||||||||||||||||||
Disposals | (1,060 | ) | (176 | ) | (940 | ) | (273 | ) | - | (2,449 | ) | |||||||||||||
Reclassification of asset groups | 1,941 | 53 | 334 | - | (2,328 | ) | - | |||||||||||||||||
Impact of foreign currency translation | (3,509 | ) | (296 | ) | (1,109 | ) | (256 | ) | (197 | ) | (5,367 | ) | ||||||||||||
Ending balance as at December 31, 2023 | $ | 109,637 | $ | 11,035 | $ | 34,363 | $ | 8,038 | $ | 11,593 | $ | 174,666 | ||||||||||||
Impairment, accumulated depreciation and amortization | ||||||||||||||||||||||||
Balance as at April 1, 2022 | $ | (57,584 | ) | $ | (7,232 | ) | $ | (23,665 | ) | $ | (5,652 | ) | $ | - | $ | (94,133 | ) | |||||||
Disposals | 733 | 500 | 767 | 407 | - | 2,407 | ||||||||||||||||||
Depreciation and amortization | (4,373 | ) | (940 | ) | (2,162 | ) | (660 | ) | - | (8,135 | ) | |||||||||||||
Impact of foreign currency translation | 4,443 | 530 | 1,847 | 436 | - | 7,256 | ||||||||||||||||||
Balance as at March 31, 2023 | $ | (56,781 | ) | $ | (7,142 | ) | $ | (23,213 | ) | $ | (5,469 | ) | $ | - | $ | (92,605 | ) | |||||||
Disposals | 777 | 162 | 211 | 196 | - | 1,346 | ||||||||||||||||||
Depreciation and amortization | (3,258 | ) | (653 | ) | (1,605 | ) | (459 | ) | - | (5,975 | ) | |||||||||||||
Impact of foreign currency translation | 1,748 | 183 | 748 | 174 | - | 2,853 | ||||||||||||||||||
Ending balance as at December 31, 2023 | $ | (57,514 | ) | $ | (7,450 | ) | $ | (23,859 | ) | $ | (5,558 | ) | $ | - | $ | (94,381 | ) | |||||||
Carrying amounts | ||||||||||||||||||||||||
Balance as at March 31, 2023 | $ | 55,340 | $ | 3,737 | $ | 11,161 | $ | 2,593 | $ | 7,228 | $ | 80,059 | ||||||||||||
Ending balance as at December 31, 2023 | $ | 52,123 | $ | 3,585 | $ | 10,504 | $ | 2,480 | $ | 11,593 | $ | 80,285 |
The carrying value of the plant and equipment of each reporting segment is summarized as follows:
Carrying amounts as at December 31, 2023 | Ying Mining District | GC | Other | Administrative | Total | |||||||||||||||
Land use rights and building | $ | 38,932 | $ | 9,978 | $ | 2,269 | $ | 944 | $ | 52,123 | ||||||||||
Office equipment | 2,893 | 436 | 52 | 204 | 3,585 | |||||||||||||||
Machinery | 7,082 | 3,289 | 133 | - | 10,504 | |||||||||||||||
Motor vehicles | 2,055 | 318 | 70 | 37 | 2,480 | |||||||||||||||
Construction in progress | 10,909 | 192 | 492 | - | 11,593 | |||||||||||||||
Total | $ | 61,871 | $ | 14,213 | $ | 3,016 | $ | 1,185 | $ | 80,285 |
Carrying amounts as at March 31, 2023 | Ying Mining District | GC | Other | Adminstrative | Total | |||||||||||||||
Land use rights and building | $ | 41,155 | $ | 10,403 | $ | 2,490 | $ | 1,292 | $ | 55,340 | ||||||||||
Office equipment | 2,991 | 440 | 63 | 243 | 3,737 | |||||||||||||||
Machinery | 7,433 | 3,568 | 160 | - | 11,161 | |||||||||||||||
Motor vehicles | 2,067 | 367 | 92 | 67 | 2,593 | |||||||||||||||
Construction in progress | 6,208 | 511 | 509 | - | 7,228 | |||||||||||||||
Total | $ | 59,854 | $ | 15,289 | $ | 3,314 | $ | 1,602 | $ | 80,059 |
20
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
13. | MINERAL RIGHTS AND PROPERTIES |
Mineral rights and properties consist of:
Producing and development properties | Exploration and evaluation properties | |||||||||||||||||||||||
Cost | Ying Mining District | BYP | GC | Kuanping | La Yesca | Total | ||||||||||||||||||
Balance as at April 1, 2022 | $ | 397,335 | $ | 65,092 | $ | 124,906 | $ | 13,380 | $ | 19,335 | $ | 620,048 | ||||||||||||
Capitalized expenditures | 35,632 | - | 4,839 | 907 | 876 | 42,254 | ||||||||||||||||||
Environmental rehabilitation | (224 | ) | (36 | ) | 12 | - | - | (248 | ) | |||||||||||||||
Foreign currency translation impact | (30,731 | ) | (1,192 | ) | (9,639 | ) | (1,034 | ) | - | (42,596 | ) | |||||||||||||
Balance as at March 31, 2023 | $ | 402,012 | $ | 63,864 | $ | 120,118 | $ | 13,253 | $ | 20,211 | $ | 619,458 | ||||||||||||
Capitalized expenditures | 35,681 | - | 4,901 | 209 | - | 40,791 | ||||||||||||||||||
Foreign currency translation impact | (12,637 | ) | (454 | ) | (3,760 | ) | (427 | ) | - | (17,278 | ) | |||||||||||||
Balance as at December 31, 2023 | $ | 425,056 | $ | 63,410 | $ | 121,259 | $ | 13,035 | $ | 20,211 | $ | 642,971 | ||||||||||||
Impairment and accumulated depletion | ||||||||||||||||||||||||
Balance as at April 1, 2022 | $ | (143,264 | ) | $ | (57,521 | ) | $ | (92,815 | ) | $ | - | $ | - | $ | (293,600 | ) | ||||||||
Impairment | - | - | - | - | (20,211 | ) | (20,211 | ) | ||||||||||||||||
Depletion | (18,689 | ) | - | (2,398 | ) | - | - | (21,087 | ) | |||||||||||||||
Foreign currency translation impact | 11,091 | 610 | 7,165 | - | - | 18,866 | ||||||||||||||||||
Balance as at March 31, 2023 | $ | (150,862 | ) | $ | (56,911 | ) | $ | (88,048 | ) | $ | - | $ | (20,211 | ) | $ | (316,032 | ) | |||||||
Depletion | (15,423 | ) | - | (1,953 | ) | - | - | (17,376 | ) | |||||||||||||||
Foreign currency translation impact | 4,726 | 236 | 2,757 | - | - | 7,719 | ||||||||||||||||||
Balance as at December 31, 2023 | $ | (161,559 | ) | $ | (56,675 | ) | $ | (87,244 | ) | $ | - | $ | (20,211 | ) | $ | (325,689 | ) | |||||||
Carrying amounts | ||||||||||||||||||||||||
Balance as at March 31, 2023 | $ | 251,150 | $ | 6,953 | $ | 32,070 | $ | 13,253 | $ | - | $ | 303,426 | ||||||||||||
Balance as at December 31, 2023 | $ | 263,497 | $ | 6,735 | $ | 34,015 | $ | 13,035 | $ | - | $ | 317,282 |
14. | LEASES |
The following table summarizes changes in the Company’s lease receivable and lease obligation related to the Company’s office lease and sublease.
Lease Receivable | Lease Obligation | |||||||
Balance, April 1, 2022 | $ | 182 | $ | 1,263 | ||||
Interest accrual | 4 | 43 | ||||||
Interest received or paid | (4 | ) | (43 | ) | ||||
Principal repayment | (172 | ) | (597 | ) | ||||
Foreign exchange impact | (10 | ) | (83 | ) | ||||
Balance, March 31, 2023 | $ | - | $ | 583 | ||||
Interest accrual | 18 | |||||||
Interest received or paid | (18 | ) | ||||||
Principal repayment | (195 | ) | ||||||
Foreign exchange impact | 10 | |||||||
Balance, December 31, 2023 | $ | - | $ | 398 | ||||
Less: current portion | - | (281 | ) | |||||
Non-current portion | $ | - | $ | 117 |
21
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
The following table presents a reconciliation of the Company’s undiscounted cash flows to their present value for its lease obligation as at December 31, 2023:
Lease Obligation | ||||
Within 1 year | $ | 291 | ||
Between 2 to 5 years | 121 | |||
Total undiscounted amount | 412 | |||
Less future interest | (14 | ) | ||
Total discounted amount | $ | 398 | ||
Less: current portion | (281 | ) | ||
Non-current portion | $ | 117 |
The lease obligation was discounted using an estimated incremental borrowing rate of 5%.
15. | ENVIRONMENTAL REHABILITATION OBLIGATION |
The following table summarizes the changes of the Company’s discounted environmental rehabilitation obligation.
Total | ||||
Balance, April 1, 2022 | $ | 8,739 | ||
Reclamation expenditures | (740 | ) | ||
Unwinding of discount of environmental rehabilitation | 239 | |||
Revision of provision | (248 | ) | ||
Foreign exchange impact | (672 | ) | ||
Balance, March 31, 2023 | $ | 7,318 | ||
Reclamation expenditures | (766 | ) | ||
Unwinding of discount of environmental rehabilitation | 147 | |||
Foreign exchange impact | (242 | ) | ||
Balance, December 31, 2023 | $ | 6,457 |
16. | SHARE CAPITAL |
(a) | Authorized |
Unlimited number of common shares without par value. All shares issued as at December 31, 2023 were fully paid.
(b) | Share-based compensation |
The Company has a share-based compensation plan (the “Plan”) which consists of stock options, restricted share units (the “RSUs”) and performance share units (the “PSUs”). The Plan allows for the maximum number of common shares to be reserved for issuance on any share-based compensation to be a rolling 10% of the issued and outstanding common shares from time to time. Furthermore, no more than 3% of the reserve may be granted in the form of RSUs and PSUs. The Company has not yet granted any PSUs since the Plan was implemented.
22
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
For the three and nine months ended December 31, 2023, a total of $0.8 million and $3.5 million, respectively (three and nine months ended December 31, 2022 - $0.8 million and $3.1 million, respectively) in share-based compensation expense was recognized and included in the corporate general and administrative expenses and property evaluation and business development expenses on the condensed consolidated interim statements of income.
(c) | Stock options |
The following is a summary of option transactions:
Number of shares | Weighted average exercise price per share CAD$ | |||||||
Balance, March 31, 2022 | 995,335 | $ | 7.28 | |||||
Options granted | 595,000 | 3.95 | ||||||
Options cancelled/forfeited | (158,667 | ) | 6.29 | |||||
Balance, March 31, 2023 | 1,431,668 | $ | 6.01 | |||||
Options cancelled/forfeited | (43,334 | ) | 7.59 | |||||
Balance, December 31, 2023 | 1,388,334 | $ | 5.96 |
The following table summarizes information about stock options outstanding as at December 31, 2023:
Exercise price in CAD$ | Number of options outstanding at December 31, 2023 | Weighted average remaining contractual life (Years) | Weighted average exercise price in CAD$ | Number of options exercisable at December 31, 2023 | Weighted average exercise price in CAD$ | |||||||||||||||||
$ | 3.93 | 473,000 | 3.32 | $ | 3.93 | 239,000 | $ | 3.93 | ||||||||||||||
$ | 4.08 | 60,000 | 4.15 | $ | 4.08 | 10,000 | $ | 4.08 | ||||||||||||||
$ | 5.46 | 480,334 | 1.40 | $ | 5.46 | 480,334 | $ | 5.46 | ||||||||||||||
$ | 9.45 | 375,000 | 1.86 | $ | 9.45 | 375,000 | $ | 9.45 | ||||||||||||||
$ | 3.93 to $9.45 | 1,388,334 | 2.30 | $ | 5.96 | 1,104,334 | $ | 6.47 |
The options were granted to directors, officers, and employees with a life of five years subject to a vesting schedule over a three-year term with 1/6 of the options vesting every six months from the date of grant until fully vested.
Subsequent to December 31, 2023, a total of 13,333 options with exercise prices from CAD$3.93 - CAD$5.46 were cancelled and/or forfeited.
23
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
(d) | RSUs |
The following is a summary of RSUs transactions:
Number of shares | Weighted average grant date closing price per share $CAD | |||||||
Balance, March 31, 2022 | 1,636,165 | $ | 6.47 | |||||
Granted | 1,154,000 | 3.96 | ||||||
Forfeited | (159,792 | ) | 5.44 | |||||
Distributed | (503,703 | ) | 6.04 | |||||
Balance, March 31, 2023 | 2,126,670 | $ | 5.29 | |||||
Granted | 1,056,000 | 5.28 | ||||||
Forfeited | (70,332 | ) | 5.13 | |||||
Distributed | (580,923 | ) | 5.56 | |||||
Balance, December 31, 2023 | 2,531,415 | $ | 5.22 |
Subsequent to December 31, 2023, a total of 341,834 RSUs were distributed.
(e) | Cash dividends |
During the three and nine months ended December 31, 2023, dividends of $2.2 and $4.4 million, respectively, (three and nine months ended December 31, 2022 - $2.2 and $4.4 million, respectively) were declared and paid.
(f) | Normal course issuer bid |
On August 24, 2022, the Company announced a normal course issuer bid (the “2022 NCIB”) which allows it to repurchase and cancel up to 7,079,407 of its own common shares until August 28, 2023.
On September 15, 2023, the Company announced a normal course issuer bid (the “2023 NCIB”), which allowed the Company to repurchase and cancel up to 8,487,191 of its own common shares until September 18, 2024.
During the three and nine months ended December 31, 2023, the Company repurchased a total of 119,270 and 315,824, respectively, (three and nine months ended December 31, 2022 – nil and 838,237, respectively) common shares at a cost of $0.3 million and $0.8 million, respectively (three and nine months ended December 31, 2022 – $nil and $2.1 million, respectively), under the normal course issuer bids. All shares bought were subsequently cancelled.
24
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
17. | ACCUMULATED OTHER COMPREHENSIVE LOSS |
December 31, 2023 | March 31, 2023 | |||||||
Change in fair value on equity investments designated as FVTOCI | $ | 24,349 | $ | 24,355 | ||||
Share of other comprehensive loss in associate | 1,177 | 1,380 | ||||||
Currency translation adjustment | 24,551 | 17,508 | ||||||
Balance, end of the period | $ | 50,077 | $ | 43,243 |
The change in fair value on equity investments designated as FVTOCI and share of other comprehensive loss in associates are net of tax of $nil for all periods presented.
18. | NON-CONTROLLING INTERESTS |
The continuity of non-controlling interests is summarized as follows:
Henan Found | Henan Huawei | Yunxiang | Guangdong Found | New Infini | Total | |||||||||||||||||||
Balance, April 1, 2022 | $ | 89,669 | $ | 4,928 | $ | 2,915 | $ | (181 | ) | $ | 10,387 | $ | 107,718 | |||||||||||
Share of net income (loss) | 11,584 | (121 | ) | (157 | ) | 78 | (10,892 | ) | 492 | |||||||||||||||
Share of other comprehensive loss | (6,037 | ) | (351 | ) | (118 | ) | (46 | ) | - | (6,552 | ) | |||||||||||||
Distributions | (9,934 | ) | (946 | ) | - | - | - | (10,880 | ) | |||||||||||||||
Balance, March 31, 2023 | $ | 85,282 | $ | 3,510 | $ | 2,640 | $ | (149 | ) | $ | (505 | ) | $ | 90,778 | ||||||||||
Share of net income (loss) | 10,874 | 513 | (120 | ) | 30 | (21 | ) | 11,276 | ||||||||||||||||
Share of other comprehensive loss | (2,061 | ) | (57 | ) | (72 | ) | (84 | ) | - | (2,274 | ) | |||||||||||||
Distributions | (6,615 | ) | (633 | ) | - | (50 | ) | - | (7,298 | ) | ||||||||||||||
Balance, December 31, 2023 | $ | 87,480 | $ | 3,333 | $ | 2,448 | $ | (253 | ) | $ | (526 | ) | $ | 92,482 |
As at December 31, 2023, non-controlling interests in Henan Found, Henan Huawei, Yunxiang, Guangdong Found and New Infini were 22.5%, 20%, 30%, 1%, and 53.9%, respectively (March 31, 2023 – 22.5%, 20%, 30%, 1%, and 53.9%, respectively).
19. | RELATED PARTY TRANSACTIONS |
Related party transactions are made on terms agreed upon by the related parties. The balances with related parties are unsecured, non-interest bearing, and due on demand. Related party transactions not disclosed elsewhere in the unaudited condensed consolidated interim financial statements are as follows:
December 31, 2023 | March 31, 2023 | |||||||
NUAG (a) | $ | 125 | $ | 51 | ||||
TIN (b) | 171 | 37 | ||||||
$ | 296 | $ | 88 |
(a) | The Company recovers costs for services rendered to NUAG and expenses incurred on behalf of NUAG pursuant to a services and administrative costs reallocation agreement. During the three and nine months ended December 31, 2023, the Company recovered $0.2 million and $0.7 million, respectively (three and nine months ended December 31, 2022 - $0.2 million and $0.7 million, respectively) from NUAG for services rendered and expenses incurred on behalf of NUAG. The costs recovered from NUAG were recorded as a direct reduction of general and administrative expenses on the unaudited condensed consolidated statements of income. |
25
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
(b) | The Company recovers costs for services rendered to TIN and expenses incurred on behalf of TIN pursuant to a services and administrative costs reallocation agreement. During the three and nine months ended December 31, 2023, the Company recovered $0.1 million and $0.3 million, respectively (three and nine months ended December 31, 2022 - $0.07 million and $0.1 million, respectively,), from TIN for services rendered and expenses incurred on behalf of TIN. The costs recovered from TIN were recorded as a direct reduction of general and administrative expenses on the unaudited condensed consolidated statements of income. |
20. | FINANCIAL INSTRUMENTS |
The Company manages its exposure to financial risks, including liquidity risk, foreign exchange risk, interest rate risk, credit risk and equity price risk in accordance with its risk management framework. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework and reviews the Company’s policies on an ongoing basis.
(a) | Fair value |
The Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of the inputs used in making the measurements as defined in IFRS 13, Fair Value Measurement (“IFRS 13”).
Level 1 – Unadjusted quoted prices at the measurement date for identical assets or liabilities in active markets.
Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Unobservable inputs which are supported by little or no market activity.
The following tables set forth the Company’s financial assets and liabilities that are measured at fair value level on a recurring basis within the fair value hierarchy as at December 31, 2023 and March 31, 2023 that are not otherwise disclosed. As required by IFRS 13, the assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
Fair value as at December 31, 2023 | ||||||||||||||||
Recurring measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 143,280 | $ | - | $ | - | $ | 143,280 | ||||||||
Short-term investments - money market instruments | 53,612 | - | - | 53,612 | ||||||||||||
Investments in public companies | 43,684 | - | - | 43,684 | ||||||||||||
Investments in private companies | - | - | 3,298 | 3,298 |
26
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
Fair value as at March 31, 2023 | ||||||||||||||||
Recurring measurements | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets | ||||||||||||||||
Cash and cash equivalents | $ | 145,692 | $ | - | $ | - | $ | 145,692 | ||||||||
Short-term investments - money market instruments | 53,829 | - | - | 53,829 | ||||||||||||
Investments in public companies | 12,314 | - | - | 12,314 | ||||||||||||
Investments in private companies | - | - | 3,226 | 3,226 |
Financial assets classified within Level 3 are equity investments in private companies owned by the Company. Significant unobservable inputs are used to determine the fair value of the financial assets, which includes recent arm’s length transactions of the investee, the investee’s financial performance as well as any changes in planned milestones of the investees.
Fair value of the other financial instruments excluded from the table above approximates their carrying amount as at December 31, 2023 and March 31, 2023, due to the short-term nature of these instruments.
There were no transfers into or out of Level 3 during the three and nine months ended December 31, 2023 and 2022.
(b) | Liquidity risk |
Liquidity risk is the risk that the Company will not be able to meet its short-term business requirements. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis and its expansion plans.
In the normal course of business, the Company enters into contracts that give rise to commitments for future minimum payments. The following summarizes the remaining contractual maturities of the Company’s financial liabilities and operating commitments on an undiscounted basis.
December 31, 2023 | ||||||||||||
Within a year | 2-5 years | Total | ||||||||||
Accounts payable and accrued liabilities | $ | 52,539 | $ | - | $ | 52,539 | ||||||
Lease obligation | 291 | 121 | 412 | |||||||||
Deposits received | 4,354 | - | 4,354 | |||||||||
Total Contractual Obligation | $ | 57,184 | $ | 121 | $ | 57,305 |
(c) | Foreign exchange risk |
The Company reports its financial statements in US dollars. The functional currency of the parent entity, Canadian subsidiaries and all intermediate holding companies is the Canadian dollar (“CAD”) and the functional currency of all Chinese subsidiaries is the Chinese yuan (“RMB”). The functional currency of New Infini and its subsidiaries is the US dollar (“USD”). The Company is exposed to foreign exchange risk when the Company undertakes transactions and holds assets and liabilities in currencies other than its functional currencies.
27
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
The Company currently does not engage in foreign exchange currency hedging. The sensitivity of the Company’s net income due to the exchange rates of the Canadian dollar against the U.S. dollar and the Australian dollar as at December 31, 2023 is summarized as follows:
Cash and cash equivelents | Short-term investments | Other investments | Accounts payable and accrued liabilities | Net financial assets explosure | Effect of +/- 10% change in currency | |||||||||||||||||||
US dollar | $ | 68,539 | $ | 1,403 | $ | 2,654 | $ | (330 | ) | $ | 72,266 | $ | 7,227 | |||||||||||
Australian dollar | 253 | - | 32,294 | - | 32,547 | 3,255 | ||||||||||||||||||
$ | 68,792 | $ | 1,403 | $ | 34,948 | $ | (330 | ) | $ | 104,813 | $ | 10,482 |
(d) | Interest rate risk |
The Company is exposed to interest rate risk on its cash equivalents and short-term investments. As at December 31, 2023, all of its interest-bearing cash equivalents and short-term investments earn interest at market rates that are fixed to maturity or at variable interest rates with terms of less than one year. The Company monitors its exposure to changes in interest rates on cash equivalents and short-term investments. Due to the short-term nature of these financial instruments, fluctuations in interest rates would not have a significant impact on the Company’s net income.
(e) | Credit risk |
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is exposed to credit risk primarily associated to accounts receivable, due from related parties, cash and cash equivalents, and short-term investments. The carrying amount of assets included on the statements of financial position represents the maximum credit exposure.
The Company undertakes credit evaluations on counterparties as necessary, requests deposits from customers prior to delivery, and has monitoring processes intended to mitigate credit risks. There were no material amounts in trade or other receivables which were past due on December 31, 2023 (at March 31, 2023 - $nil).
(f) | Equity price risk |
The Company holds certain marketable securities that will fluctuate in value as a result of trading on financial markets. As the Company’s marketable securities holdings are mainly in mining companies, the value will also fluctuate based on commodity prices. Based upon the Company’s portfolio as at December 31, 2023, a 10% increase (decrease) in the market price of the securities held, ignoring any foreign currency effects, would have resulted in an increase (decrease) to the net income (loss) and other comprehensive income (loss) of $4.3 million and $0.1 million, respectively.
28
SILVERCORP METALS INC.
Notes to Condensed Consolidated Interim Financial Statements as at December 31, 2023 and
for the three and nine months ended December 31, 2023 and 2022
(Unaudited) (Tabular amounts are in thousands of U.S. dollars, except numbers for share and per share figures or otherwise stated)
21. | SUPPLEMENTARY CASH FLOW INFORMATION |
The following table summarizes adjustments for changes in working capital items and significant non-cash items:
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
Changes in non-cash operating working capital: | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Trade and other receivables | $ | 1,437 | $ | 364 | $ | 1,497 | $ | 1,736 | ||||||||
Inventories | (3,007 | ) | 483 | (3,043 | ) | 657 | ||||||||||
Prepaids and deposits | (2,313 | ) | 1,089 | (3,451 | ) | (7 | ) | |||||||||
Accounts payable and accrued liabilities | 3,387 | 3,712 | 12,819 | 3,960 | ||||||||||||
Deposits received | 390 | (3,923 | ) | 454 | (2,470 | ) | ||||||||||
Due from a related party | (29 | ) | (45 | ) | (202 | ) | (56 | ) | ||||||||
$ | (135 | ) | $ | 1,680 | $ | 8,074 | $ | 3,820 |
The following table summarizes other adjustments for non-cash items related to capital expenditures and acquisition transactions:
Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||
Non-cash capital transactions: | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Environmental rehablitation expenditure paid from reclamation deposit | $ | 390 | $ | 107 | $ | 233 | $ | 257 | ||||||||
Additions of plant and equipment included in accounts payable and accrued liabilities | $ | 1,749 | $ | 1,065 | 1,104 | 2,159 | ||||||||||
Capital expenditures of mineral rights and properties included in accounts payable and accrued liabilities | $ | 1,106 | $ | (1,279 | ) | $ | 2,197 | $ | 1,033 |
Cash and cash equivalents consist of:
December 31, 2023 | March 31, 2023 | |||||||
Cash on hand and at bank | $ | 47,310 | $ | 50,871 | ||||
Bank term deposits and short-term money market investments | 95,970 | 94,821 | ||||||
Total cash and cash equivalents | $ | 143,280 | $ | 145,692 |
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