Silvercorp Metals (TSX:SVM) - Profitable Miner Diversifies Beyond China with Ecuador Projects

Mar 3, 2025

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Interview with Lon Shaver, President of Silvercorp Metals Inc.

Our previous interview: https://www.cruxinvestor.com/posts/silvercorp-metals-tsxsvm-expanding-to-gold-copper-horizons-with-strategic-ecuador-acquisition-5973

Recording date: 27th of February, 2025

Silvercorp Metals, a profitable silver producer with established operations in China, is strategically diversifying into Ecuador to create a multi-jurisdictional mining platform. The company's President, Lon Shaver, recently outlined this growth strategy aimed at reducing the valuation discount typically applied to single-jurisdiction companies.

Central to this expansion is the development of the EL DOMO mine in Ecuador, a fully permitted project with production targeted for the second half of 2026. With a capex of approximately $250 million, EL DOMO will be funded through a $175 million stream from Wheaton Precious Metals and Silvercorp's existing cash reserves of around $200 million. The project boasts a 10-year mine life with projected annual production of 11,000 tons of copper, 26,000 ounces of gold, 12,000 tons of zinc, and 490,000 ounces of silver, with an all-in sustaining cost of $1.26 per pound on a copper equivalent basis.

Silvercorp sees significant operational synergies between EL DOMO and its Chinese operations, despite geological differences. "The tonnage and the throughput through the mill is very similar to the tonnage expansion that we just completed at Ying," notes Shaver, highlighting that both operations use similar flotation mill technologies to produce concentrates.

The company is also reimagining the Condor project in Ecuador, shifting from the previous owners' concept of a large open-pit operation requiring $600 million in capital to a more discrete, high-grade underground operation. This approach aligns with Silvercorp's successful development strategy in China, focusing on incremental growth funded by operational cash flow.

While expanding internationally, Silvercorp continues to strengthen its Chinese operations, recently increasing production capacity at its Ying mine from 2,500 to 4,000 tons per day. The company has also accumulated substantial ore stockpiles (145,000 tons), positioning it for continued strong performance even during traditionally slower periods.

Shaver expressed optimism about metals markets, noting, "Our view for commodity prices is positive whether that be silver or others, just because of the fact that we see the economies continuing to grow, and there's not a lot of supply that we see coming on of the market."

Near-term catalysts include completing the remaining two bid packages for EL DOMO construction, which will provide more concrete guidance on budget and timing for the project as Silvercorp works to build a diversified precious metals portfolio with a disciplined approach to growth and shareholder value.

Learn more: https://www.cruxinvestor.com/companies/silvercorp-metals