What Next For Silvercorp Metals Inc. (USA) (NYSE:SVM)?

Posted by Lynn Eisler February 17, 2014 0 Comment 2067 views

The $492 million market capped silver mining firm, Silvercorp Metals Inc. (USA) (NYSE:SVM) which has its headquarters in Canada and has mining properties in China and Canada saw its market valuation go down by 12.7 percent during trading on 14th February.  This downward push in the market valuation of the stock occurred on the back of the mining firm reporting 3Q results which disappointed the markets.

Production Down

Silvercorp Metals Inc. (USA) (NYSE:SVM) silver production for the quarter went down to 0.9 million, while its gold output went up to 1985 ounces. Rear earth metals, Lead and Zinc extraction came in at 9 million pounds and 1.7 million pounds respectively for the quarter. Over all, total sales of $24 million were recorded from quarter operations, resulting in gross margins of 44 percent. Thanks to decrease in sales, steady cash flow generated for the quarter was down to $9.9 million for the quarter. Net income for the quarter was $2.2 million.

Cost of Sales and Production Up

In Q314 net income of $2.2 million represented a steep dip from 3Q13 income which stood at $5.2 million. Its sales saw a dramatic 59 percent dip to $24 million from a record high of $58.7 million that the company had recorded in 3Q13. Explaining the reasons for the slow down, the mining firm has flagged out three main reasons. These challenges included dip in the production of its “silver, lead and zinc” metals by “42%, 45%, and 58%” respectively when contrasted against its Q313 production numbers, lower realized selling cost and cost of sales going up. The gross margins also went down by 20 percent from 64 percent in 2013 3Q.

Stock Market Reacts

On the back of these disappointing results, the stock was trading 30.6 percent below its 52 week high price point of $4.15 per share. It was trading at $2.88 per share at close of business on 14th February.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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