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Silvercorp’s share price glistened in 2019 but what could 2020 have in store?

Proactive's mining analyst, Dr Ryan D. Long, takes a look at what drove Silvercorp Metals Inc.'s surging share price last year and outlines what investors can expect for 2020.

Pan American Silver Corp. - Silvercorp’s share price glistened in 2019 but what could 2020 have in store?

Shares in Silvercorp Metals Inc (TSE.SVM, NYSE American.SVM) have risen a staggering 167% in the past twelve months. This rise was partly driven by an 18% increase in the silver price over the same period but also increases in tonnes mined, ore milled, metal sold and profits made from the Ying Mining District and the GC Mine.

Added to the operational success from its Chinese mines, is the 333% increase in the share price of New Pacific Metals Corp (TSXV.NUAG), where Silvercorp holds around a. 29% interest and Pan American Silver Corp (TSX:PAA), where it owns a stake of about 17%.

Silvercorp currently has two silver operations in China: the Ying Mining District, in Henan Province and the GC Mine, located in Guangdong Province (Figure 1),

Figure 1: Location of Silvercorp’s Projects

Source: Silvercorp

The Ying Mining District contains six operating mines that produced roughly 5.8mln ounces (oz) of silver in 2019 and 60.6mln oz of silver since the mine started production in 2007. The GC Mine produced 0.6mln oz of silver in 2019 and has produced 2.9mln oz since the mine started production in 2015.

Alongside its existing operations, the company is also seeking to restart operations at its BYP Mine, located in Hunan Province, which would add gold to its silver production profile.

Alongside its silver production, the company also produces a large amount of lead and zinc from its operations, with 972 million pounds of lead and zinc produced since 2007.

Silvercorp continues to grow its asset base organically through extensive drilling programmes, but it is also looking at acquisitions, joint ventures and strategic investments to grow the company inorganically.

With US$135.3mln in cash and cash equivalents (as at 30 September 2019) and no significant debt, the company is well funded to implement both its organic and inorganic growth strategies in 2020.

Quick facts: Pan American Silver Corp.

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TSX:PAA
Market: TSX
Market Cap: -
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