At $100/oz silver

Silvercorp Metals: Valuation and Analysis

Key Metrics:

1. Resources:
   • 350M oz silver at 200 gpt.
   • 6.2M oz silver production in 2024 + lead and zinc (~40% revenue).
2. Costs:
   • Cash cost: $3/oz (after base metal offsets).
   • AISC: $16-$17/oz (free cash flow level).
3. Growth:
   • Expanding to 8M oz/year by 2026 with a 3,000 tpd mill.
   • Long-term potential: ~9M oz/year.
4. Balance Sheet:
   • $200M cash and no debt.
   • 28% stake in New Pacific Metals worth $140M.
5. Key Assets:
   • BYP Gold Project (China): 500K oz gold; 30K oz/year once permitted.
   • Adventus Mining (Ecuador):
     • El Domo VMS Project: 70M lbs copper/year, $1.25/lb AISC.
     • Condor Gold Project: 6.5M oz gold, 200K oz/year potential.
6. Risks:
   • Political risk in China and Ecuador.
   • Dependency on base metals for low costs.
   • Potential geopolitical risk (e.g., China-Taiwan tensions).

Valuation Scenarios:

1. Base Case ($25 Silver):
   • FCF per oz: $25 - $17 = $8/oz.
   • Total FCF: 6.2M oz x $8 = $49.6M/year (silver only).
   • Base Metal FCF (40% contribution): $33.2M/year.
   • Total FCF: $82.8M/year.
   • Market Cap: $82.8M x 10 = $828M.
   • Stock Price: $828M / 300M shares = $2.76/share.
2. Upside Case ($50 Silver):
   • FCF per oz: $50 - $17 = $33/oz.
   • Total FCF: 6.2M oz x $33 = $204.6M/year (silver only).
   • Base Metal FCF (40% contribution): $137.1M/year.
   • Total FCF: $341.7M/year.
   • Market Cap: $341.7M x 10 = $3.417B.
   • Stock Price: $3.417B / 300M shares = $11.39/share.
3. High-End Case ($100 Silver):
   • FCF per oz: $100 - $17 = $83/oz.
   • Total FCF: 6.2M oz x $83 = $513.4M/year (silver only).
   • Base Metal FCF (40% contribution): $344M/year.
   • Total FCF: $857.4M/year.
   • Market Cap: $857.4M x 10 = $8.574B.
   • Stock Price: $8.574B / 300M shares = $28.58/share.

Summary of Valuation Scenarios:

• $25 Silver: $2.76/share.
• $50 Silver: $11.39/share.
• $100 Silver: $28.58/share.

Key Strengths:

1. Low-cost production at $3/oz cash cost and $16-$17/oz AISC.
2. Strong balance sheet with $200M cash and no debt.
3. Growth potential with production rising to 8M oz/year by 2026.
4. Diversified asset base with additional projects in gold and copper.

Risks:

1. Political risks in China and Ecuador.
2. Dependency on base metals for maintaining low costs.
3. Geopolitical concerns (e.g., China-Taiwan tensions).

Conclusion: Silvercorp Metals offers significant leverage to rising silver prices:

• $2.76/share at $25 silver.
• $11.39/share at $50 silver.
• $28.58/share at $100 silver.

This makes it an attractive investment for long-term silver bulls, though geopolitical risks remain a concern.