VANCOUVER, British Columbia – February 6, 2020 – Silvercorp Metals Inc. (“Silvercorp” or the “Company”) (TSX/NYSE American: SVM) reported its financial and operating results for the third quarter ended December 31, 2019 (“Q3 Fiscal 2020”). All amounts are expressed in US Dollars.

Q3 FISCAL YEAR 2020 HIGHLIGHTS
•Ore mined up 1% to 262,586 tonnes compared to the prior year quarter (“Q3 Fiscal 2019”);
•Sold approximately 1.7 million ounces of silver, 18.8 million pounds of lead, and 8.4 million pounds of zinc, up 0%, 6% and 103%, respectively, compared to 1.7 million ounces of silver, 17.8 million pounds of lead, and 4.1 million pounds of zinc in the prior year quarter while gold sold was 700 ounces, down 36% compared to 1,100 ounces in the prior year quarter;
•Ended the quarter with inventories of 3,815 tonnes of silver-lead concentrate and 270 tonnes of zinc concentrate, down 9% and 54%, compared to 4,176 tonnes of silver-lead concentrate and 586 tonnes of zinc concentrate as at September 30, 2019;
•Revenue up 5% to $44.5 million compared to the prior year quarter;
•Gross profit margin of 42% compared to 46% in the prior year quarter;
•Net income attributable to equity shareholders of $6.3 million, or $0.04 per share, a decrease of $2.4 million compared to $8.7 million, or $0.05 per share in the prior year quarter;
•Cash flow from operations of $24.9 million, up 26% compared to $19.8 million in the prior year quarter;
•Cash cost per ounce of silver1, net of by-product credits, of negative $1.21, compared to negative $2.77 in the prior year quarter;
•All-in sustaining cost per ounce of silver1, net of by-product credits, of $7.21, compared to $6.53 in the prior year quarter;
•Paid $2.2 million in dividends to the Company’s shareholder;
•Invested $3.8 million in New Pacific Metals Corp. (“NUAG”) through its public offering to maintain the Company’s ownership interest at 28.9%; and,
•Strong balance sheet with $155.1 million in cash and cash equivalents and short-term investments, an increase of $19.9 million or 15% compared to $135.2 million as at September 30, 2019.

FINANCIALS

Net income attributable to equity shareholders of the Company in Q3 Fiscal 2020 was $6.3 million, or $0.04 per share, a decrease of $2.4 million, compared to $8.7 million, or $0.05 per share in the third quarter ended December 31, 2018.

Compared to Q3 Fiscal 2019, the Company’s financial results in Q3 Fiscal 2020 were mainly impacted by i) increases of 17% and 20% in the average realized selling prices for silver and gold; ii) an increases of 6% and 103% of lead and zinc sold; offset by iii) a decreases of 21% and 27% in the average realized selling prices for lead and zinc, and iv) a $1.3 million foreign exchange loss.

Sales in Q3 Fiscal 2020 were $44.5 million, up 5% or $2.1 million, compared to $42.4 million in Q3 Fiscal 2019. Silver, gold, and base metals sales represented $24.0 million, $0.9 million, and $19.6 million, respectively, compared to $20.7 million, $1.2 million, and $20.5 million, respectively, in Q3 Fiscal 2019.

Cost of sales in Q3 Fiscal 2020 was $25.6 million, an increase of $2.6 million or 11%, compared to $23.0 million in Q3 Fiscal 2019. The cost of sales included $18.4 million of cash production costs (Q3 Fiscal 2019 - $16.9 million), $1.3 million of mineral resources tax (Q3 Fiscal 2019 - $1.2 million), and $5.9 million depreciation and amortization charges (Q3 Fiscal 2019 - $4.9 million). The increase was mainly due to more metals sold and an increase of 6% in cash production costs per tonne of ore processed.

Gross profit margin in Q3 Fiscal 2020 was 42%, compared to 46% in Q3 Fiscal 2019. Ying Mining District’s gross profit margin was 46% compared to 47% in Q3 Fiscal 2019. GC Mine’s gross profit margin was 28% compared to 38% in Q3 Fiscal 2019.

General and administrative expenses in Q3 Fiscal 2020 were $5.1 million, compared to $5.3 million in Q3 Fiscal 2019.

Foreign exchange loss in Q3 Fiscal 2020 was $1.3 million compared to a foreign exchange gain of $2.4 million in Q3 Fiscal 2019. The foreign exchange gain or loss is mainly driven by the fluctuation of the US dollar against the Canadian dollar.

Share of loss in an associate in Q3 Fiscal 2020 was $0.3 million compared to $0.2 million gain in Q3 Fiscal 2019. The loss represents the Company’s equity pickup in NUAG.

Income tax expenses in Q3 Fiscal 2020 were $3.7 million compared to $5.1 million in Q3 Fiscal 2019. The income tax expense recorded in Q3 Fiscal 2020 included current income tax expense of $2.8 million (Q3 Fiscal 2019 – $4.4 million) and deferred income tax expense of $0.9 million (Q3 Fiscal 2019 – $0.8 million).

Cash flow provided by operating activities in Q3 Fiscal 2020 was $24.9 million, an increase of $5.1 million, compared to $19.8 million in Q3 Fiscal 2019.

For the nine months ended December 31, 2019, net income attributable to equity shareholders of the Company was $31.1 million or $0.18 per share, an increase of $3.5 million, compared to $27.6 million or $0.16 per share in the same prior year period; sales were $140.0 million, up 3% or $4.4 million from $135.6 million in the same prior year period; the share of loss in NUAG was $0.8 million, compared to $0.2 million in the same prior year period; and cash flow from operating activities was $71.0 million after changes in working capital, up 14% or $9.0 million from $62.0 million in the same prior year period.

The Company ended Q3 Fiscal 2020 with $155.1 million in cash and short-term investments, an increase of $19.9 million or 15%, compared to $135.2 million as at September 30, 2019.

Working capital as at December 31, 2019 was $133.7 million, an increase of $8.7 million or 7%, compared to $125.0 million as at September 30, 2019.

OPERATIONS AND DEVELOPMENT

i) Q3 Fiscal 2020 vs. Q3 Fiscal 2019

In Q3 Fiscal 2020, on a consolidated basis, the Company mined 262,586 tonnes of ore, an increase of 1% or 2,308 tonnes, compared to 260,278 tonnes in Q3 Fiscal 2019. Ore mined at the Ying Mining District and the GC Mine increased by 1,997 tonnes and 311 tonnes, respectively. Ore milled was 264,860 tonnes, down 2% compared to 271,476 tonnes in Q3 Fiscal 2019.

In Q3 Fiscal 2020, the Company sold approximately 1.7 million ounces of silver, 18.8 million pounds of lead, and 8.4 million pounds of zinc, up 0%, 6%, and 103%, respectively, compared to 1.7 million ounces of silver, 17.8 million pounds of lead, and 4.1 million pounds of zinc in Q3 Fiscal 2019 while gold sold was 700 ounces, down 36% compared to 1,100 ounce in Q3 Fiscal 2019. As at December 31, 2019, the Company had inventories of 3,815 tonnes of silver-lead concentrate and 270 tonnes of zinc concentrate, down 9% and 54%, respectively, compared to 4,176 tonnes of silver-lead concentrate and 586 tonnes of zinc concentrate as at September 30, 2019.

In Q3 Fiscal 2020, the consolidated total mining costs and cash mining costs were $78.65 and $57.54 per tonne, an increase of 10% and 8%, respectively, compared to $71.76 and $53.49 per tonne, in Q3 Fiscal 2019. The increase in cash mining costs was mainly due to i) an increase of $0.6 million in mining preparation costs arising from additional tunnelling, and ii) an increase of $0.5 million in mining contractor costs. The consolidated total milling costs and cash milling costs in Q3 Fiscal 2020 were $13.58 and $12.01 per tonne, compared to $13.44 and $11.64 per tonne in Q3 Fiscal 2019.

The consolidated cash production costs per tonne of ore processed in Q3 Fiscal 2020 were $72.16, up 6% compared to $67.95 in Q3 Fiscal 2019. The consolidated all-in sustaining production costs per tonne of ore processed were $121.49, down 1% compared to $122.15 in Q3 Fiscal 2019, and below the Company’s Fiscal 2020 annual guidance of $125.50.

In Q3 Fiscal 2020, the consolidated cash cost per ounce of silver, net of by-product credits, was negative $1.21, compared to negative $2.77 in the prior year quarter. The increase was mainly due to an increase of $1.5 million in cash production costs and a decrease of $1.2 million in by-product credits resulting from lower net realized selling prices for lead and zinc, a decrease of 21% and 27%, respectively, partially offset by the increase of lead and zinc sold. Sales of lead and zinc in the current quarter amounted to $19.2 million, a decrease of $1.0 million, compared to $20.2 million in the prior year quarter.

In Q3 Fiscal 2020, the consolidated all-in sustaining costs per ounce of silver, net of by-product credits, were $7.21 compared to $6.53 in Q3 Fiscal 2019. The increase was mainly production costs and the decrease in by-product credits as discussed above.

In Q3 Fiscal 2020, on a consolidated basis, approximately 28,978 metres or $1.1 million worth of diamond drilling (Q3 Fiscal 2019 – 27,440 metres or $0.7 million) and 12,912 metres or $3.3 million worth of preparation tunnelling (Q3 Fiscal 2019 – 10,672 metres or $2.7 million) were completed and expensed as mining preparation costs. In addition, approximately 22,237 metres or $7.5 million worth of horizontal tunnels, raises, ramps and declines (Q3 Fiscal 2019 – 19,694 metres or $6.8 million) were completed and capitalized.

ii) Nine months ended December 31, 2019 vs. nine months ended December 31, 2018

For the nine months ended December 31, 2019, on a consolidated basis, the Company mined 779,235 tonnes of ore, an increase of 5% or 33,840 tonnes, compared to 745,395 tonnes mined in the same prior year period. Ore milled was 789,684 tonnes, up 5% or 40,740 tonnes, compared to 748,944 tonnes in the same prior year period.

The Company sold approximately 5.5 million ounces of silver, 2,800 ounces of gold, 55.7 million pounds of lead, and 22.3 million pounds of zinc, up 8%, 0%, 7%, and 45%, respectively, compared to 5.1 million ounces of silver, 2,800 ounces of gold, 52.1 million pounds of lead, and 15.4 million pounds of zinc sold in the same prior year period.

For the nine months ended December 31, 2019, the consolidated total mining costs and cash mining costs were $76.31 and $55.13 per tonne, respectively, compared to $73.85 and $54.88 per tonne in the same prior year period. The consolidated total milling costs and cash milling costs were $12.85 and
$11.14, respectively, compared to $13.22 and $11.08 per tonne in the same prior year period.

Correspondingly, the consolidated cash production costs per tonne of ore processed for the nine months ended December 31, 2019 were $68.93, a slight increase compared to $68.87 in the same prior year period. The all-in sustaining production costs per tonne of ore processed were $117.12, an increase of 1%, compared to $115.52 in the same prior year period. However, both the cash production costs and all-in sustaining production costs per tonne were lower than the Company’s Fiscal 2020 annual guidance.

For the nine months ended December 31, 2019, the consolidated cash cost per ounce of silver, net of by-product credits, was negative $2.06, compared to negative $4.37 in the same prior year period. The increase was mainly due to a decrease of $2.22 in by-product credits per ounce of silver mainly resulting from lower net realized selling prices for lead and zinc. Sales of lead and zinc for the nine months ended December 31, 2019 amounted to $59.7 million, a decrease of $8.1 million, compared to $67.8 million in the same period year period. The consolidated all-in sustaining costs per ounce of silver, net of by-product credits was $5.64 compared to $3.27 in the same prior year period. The increase was mainly due to the decrease in by-product credits as discussed above and an increase of $3.1 million in sustaining capital expenditures.

For the nine months ended December 31, 2019, on a consolidated basis, approximately 93,544 metres or $3.0 million worth of diamond drilling (same prior year period – 91,735 metres or $2.5 million) and 37,224 metres or $9.6 million worth of preparation tunnelling (same prior year period – 32,073 metres or $8.7 million) were completed and expensed as mining preparation costs. In addition, approximately 63,736 metres or $22.0 million worth of horizontal tunnels, raises, ramps and declines (same prior year period – 56,035 metres or $20.0 million) were completed and capitalized.

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