Silvercorp Metals' 2026 Q1: Navigating Contradictions in Construction, Production Guidance, and Cost Challenges

El Domo construction progress and challenges, 1Q2026 silver production and guidance, contractor issues and impact on production, mine plan adjustments and guidance, cost inflation and currency fluctuations are the key contradictions discussed in Silvercorp Metals' latest 2026Q1 earnings call.



Revenue and Cash Flow Growth:
- Silvercorp Metals Inc. reported revenue of $81.3 million for Q1 2026, up 13% from the previous year, with cash flow from operating activities setting a new quarterly record at $48.3 million, up 21% from the prior year.
- The growth was driven by a 5% increase in silver and a 95% increase in gold sold during the quarter, combined with a 12% and 45% rise in the selling prices of silver and gold, respectively.

Cost and Profitability Impact:
- The company reported a net income of $18.1 million, down from $21.9 million in the previous year, with an adjusted net income of $21 million.
- The decrease was primarily due to a noncash $5 million accounting charge on the fair value of derivative liabilities and an additional 38.8 million shares issued for the acquisition of Adventus Mining.

Production and Cost Trends:
- Silvercorp produced approximately 1.8 million ounces of silver, 2,000 ounces of gold, 16 million pounds of lead, and 5 million pounds of zinc, with increases of 6%, 79%, and 1%, respectively, in production.
- Consolidated cash cost per ounce of silver increased to $1.11 due to a $6 million increase in production costs, lower silver grades, and a $1.5 million increase in mineral rights royalties.

Safety Incident and Production Shortfall:
- Silvercorp disclosed a potential production shortfall of up to 20% to 25% for the current quarter due to a fatality at the HZG mine in the Ying Mining District.
- The incident was attributed to unsafe practices by a contractor, leading to a regulatory investigation and temporary mine closures.

Growth Projects and Investment:
- The company invested $18.8 million in its operations in China and $7.6 million in Ecuador to advance the El Domo construction and the Condor exploration plan.
- These investments are part of Silvercorp's strategic growth initiatives, including trackless system development at Ying, mine construction at Kuanping, and progress at the El Domo project in Ecuador.