Silvercorp says mining contracts negotiations impacted quarterly production in China
(Kitco News) - Silvercorp Metals (TSX: SVM; NYSE American: SVM) reported Wednesday that in Q1 fiscal 2022 (calendar Q2 2021), the company produced approximately 1.5 million ounces of silver, 1,000 ounces of gold, 15.9 million pounds of lead, and 7.2 million pounds of zinc at its mining operations in China.
On a consolidated basis, ore mined was 231,235 tonnes, down 9% over Q1 fiscal 2021 (Q2 2020), and ore milled was 243,077 tonnes, down 7% over Q1 fiscal 2021. Approximately 1.5 million ounces of silver, 1,000 ounces of gold, 15.9 million pounds of lead, and 7.2 million pounds of zinc were produced, down 16%, 9%, 21%, and 4%, respectively, over Q1 fiscal 2021.
Silvercorp added that the production decline in the current quarter resulted mainly from the company’s mining contracts renewal negotiations at the Ying Mining District. As reported in the company’s news release dated April 28, 2021, the company’s two-year mining contracts with the eight mining contractors at the Ying Mining District expired on March 31, 2021 and the parties reached a temporary two-month extension.
The company said that during negotiations, some contract workers took breaks or left due to the uncertainty which caused some disruption to mining activities. When the contracts were renewed for an additional two year term in mid May 2021, it took some time for the contractors to bring back all their workers and ramp the operations back up to full capacity.
Notwithstanding the production decline in Q1 fiscal 2022, the company said it expects to increase production in the remaining three quarters and meet its annual guidance to produce between 6.3 - 6.6 million ounces of silver, 65.7 – 68.9 million pounds of lead, and 26.9 – 28.5 million pounds of zinc in fiscal 2022.
Silvercorp is a Canadian mining company producing silver, lead and zinc metals in concentrates from mines in China.