Silvercorp Metals (TSX:SVM) - Positioned for Growth in a Strengthening Silver Market

Interview with Lon Shaver, Vice President of Silvercorp Metals Inc.

Our previous interview: https://www.cruxinvestor.com/posts/silvercorp-tsxsvm-transformational-acquisition-of-permitted-gold-project-3947

Recording date: 6th March 2024

Silvercorp Metals, a well-established silver producer with a strong track record of profitability and shareholder returns, is embarking on an ambitious growth strategy to take the company to the next level. With a solid financial position, a producing asset base in China, and a disciplined approach to acquisitions, Silvercorp offers investors a compelling mix of downside protection and upside potential in a strengthening precious metals market.

At the core of Silvercorp's growth strategy is the optimization of its flagship Ying mine in China. Despite Ying's impressive performance since commencing production in 2006, the company has identified several opportunities to enhance the mine's productivity and extend its lifetime. Key initiatives include the adoption of more mechanized mining methods to overcome labor availability challenges, the implementation of advanced ore sorting technology to upgrade mill feed, and a low-cost expansion of milling capacity. These improvements, to be implemented gradually across Ying's seven individual mines, are expected to unlock significant value and position the asset for continued success.

Alongside its organic growth plans, Silvercorp is also pursuing external growth through disciplined M&A. The company's ongoing pursuit of Tanzanian gold developer Orcorp and its Nyanzaga project showcases Silvercorp's ability to identify and act on attractive acquisition opportunities. Despite the emergence of a competing bid, Silvercorp remains confident in the merits of the transaction and its ability to create value for shareholders. Importantly, however, the company's growth strategy does not hinge on any single deal, with a robust project pipeline and active business development efforts ensuring multiple avenues for value creation.

Underpinning Silvercorp's growth strategy is its strong financial position and track record of successful operations in jurisdictions perceived as higher-risk. With a history of profitable production and dividend payments, Silvercorp offers investors a relatively safe haven in a volatile mining sector. At the same time, the company's experience operating in China for nearly two decades positions it to capture value in jurisdictions where other miners may face challenges. As Vice President Lon Shaver notes, the jurisdictional risk is often more perception than reality, with permitting hurdles in western countries frequently posing greater obstacles to mine development than operating in countries like China.

With a compelling mix of downside protection and growth potential, a strong balance sheet, and a disciplined approach to value creation, Silvercorp Metals is well-positioned to deliver outsize returns for shareholders in the years ahead. As the precious metals bull market gathers momentum, Silvercorp's unique combination of assets, experience, and strategy make it a mining stock to watch.

View Silvercorp Metals' company profile: https://www.cruxinvestor.com/companies/silvercorp-metals

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