Q3 2024 Silvercorp Metals Inc Earnings Call

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Operator: SilvercorpMetal.com, Thank you for standing by. Good afternoon. My name is Lester, and I will be your operator for today. At this time, I would like to welcome everyone to Silvercorp's 3rd Quarter Fiscal 2024 Financial Results Conference Call. All lines have been placed on hold to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, please press star, delta number 1 on your telephone keypad. If you would like to withdraw your question, please press star followed by the number 2. I would now like to turn the conference over to Lon Shaver, President of Silvercorp Metal. Please go ahead.

Okay.

Okay.

Okay.

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Okay.

Lon Shaver: Thank you, operator. On behalf of Silvercorp, I'd like to welcome all of you to this call to discuss our third quarter fiscal 2024 financial results. They were released yesterday after the market. A copy of the news release, the MD&A, and the financial statements for today's call are available on our website and on CDAR Plus. Before we get started, I'm required to remind you that certain statements on today's call will contain forward-looking information. As it relates to applicable security laws, please review the cautionary statements included in our news release and presentation, as well as the risk factors described in our most recent 10-2 and Form 40-F, and Aeria.

Okay.

Okay.

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Thank you for standing by good afternoon. My name is lesser and I will be your operator for today.

At this time I would like to welcome everyone to Silver Corp, third quarter fiscal 2020 financial results Conference call.

All lines have been placed on mute to prevent any background noise.

After the speaker's remarks, there will be a question and answer session.

If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad.

If you would like to withdraw your question. Please press star followed by the number too.

I would now like to turn the conference over to lot cheaper breadth and scope of Corp. Smith. Please go ahead.

Thank you operator on behalf of our Solar Corp, I'd like to welcome all of you to this call to discuss our third quarter of fiscal 2024 financial results.

Lon Shaver: So turning to the quarterly financial results, with respect to the quarter, we delivered strong Q3, good financial results, which were underpinned by revenue of $58.5 million, in line with the prior year quarter, and this number did reflect a number of changes in different parameters. With respect to pricing, we had increases of 11%, 17%, and 2% in gold, silver, and lead, respectively, and a decrease of 15% in the realized zinc price. Switching to volume, we had increases of 22% and 3% in gold and zinc sold respectively, but these were offset by decreases of 8% and 16% in silver and lead sold respectively. Based on production levels and realized prices this quarter, silver was 59% of revenue on a net realized basis, this is up from 54% in Q3 of fiscal 2023 and almost hits our record in recent years of 60% of revenue. Third quarter net earnings attributable to equity shareholders were $10.5 million, or $0.06 per share.

They were released yesterday after market copy of the news release, the MD&A and the financial statements for today's call are available on our website and on SEDAR plus.

Before we get started I'm required to remind you that certain statements on today's call will contain forward looking information.

As it relates to applicable securities laws. Please review the cautionary statements included in our news release and presentation as well as the risk factors described in our most recent 10-Q and form 40 F.

Yes.

So turning to the quarterly financial results with respect to the quarter, we delivered a strong Q.

Q3, a good financial results, which are underpinned by revenue of $58 5 million.

In line with the prior year quarter and this number did reflect a number of changes in different parameters with respect to our pricing, we had increases of 11% 17, and 2% and gold silver and lead respectively.

A decrease of 15% and the realized zinc price.

Ching to volume, we had increases of 22 and 3% in gold and zinc sold respectively.

But offset by decreases of 8% and 16% in silver and lead salt.

Based on production levels and realized prices this quarter silver was 59% of revenue on a net realized basis.

This is up from 54% and Q3 of fiscal 2023, and almost hit a record in recent years of 60% of revenue.

Lon Shaver: Compared to $11.9 million or $0.07 for the same period of last year, the main contributors to the slight decrease were the aforementioned factors impacting revenue, an increase of 5 million in the share of Lawson Associates, an improvement of 4.4 million in mark-to-market on investments that we hold, and a 4% improvement in unit production costs. On an adjusted basis, with adjustments made to remove the impacts of non-cash and unusual items, earnings for the quarter were $11.5 million, or also $0.06 per share, due to rounding. This compared to $11.8 million, or $0.07 per share, in the same period last year. And just a reminder, this adjusted earnings figure is a supplemental, non-GAAP measure to provide investors with another metric to better measure the performance of the underlying business, its continuing profitability, and growth potential.

Third quarter net earnings attributable to equity shareholders were $10 5 million or six cents per share as compared to $11 9 million or seven cents for the same period last year. The main contributors to the slight decrease were the aforementioned factors impacting our revenue.

An increase of $5 million in the share of loss in associates and.

An improvement of $4 4 million in Mark to Mark on the investments that we hold.

And a 4% improvement in unit production costs on.

On an adjusted basis with adjustments made to remove the impact of noncash unusual items earnings for the quarter were $11 5 million or also six cents per share due to rounding.

This compared to $11 8 million or seven cents per share in the same period last year.

And just a reminder, this adjusted earnings figure as a supplemental non-GAAP measure to.

To provide investors with another metric to better measure the performance of the underlying business is continuing profitability and growth potential.

Our cash flow from operating activities in the quarter was $23 6 million.

Lon Shaver: Our cash flow from operating activities in the quarter was $23.6 million, down very slightly from $25.7 million in the prior year quarter due to the factors mentioned just before affecting revenue and net income. But also, a $3.2 million increase in cash taxes paid, and also the number in last year's quarter also reflected a positive adjustment of $1.7 million from non-cash working capital, which did not apply this year.

Down very slightly from 25.7 million in the prior year quarter.

Due to the factors mentioned just before affecting our revenue and net income.

But also the $3 2 million increase in cash taxes paid and also the number a lot in last years quarter also reflected a positive adjustment of $1 7 million from noncash working capital.

It did not apply this year.

Lon Shaver: Capital expenditures totaled approximately $19.6 million in this quarter. That was up 26% from $15.6 million in the prior year period due to increased tunnel and ramp development and exploration activities at both operations as well as modestly higher investments in equipment and facilities at Ewing. We ended the quarter with $198.2 million in cash and cash equivalents in short-term investments. That's up 5% compared to the $189 million that we reported as of September 30th. And just a reminder, this cash position does not include our investments in Associates and other companies, which had a total market value of approximately $140 million in December. As we previously reported, in terms of production in the quarter, we mined 345,273 tons of ore and milled 312,500 tons of ore. Those numbers are up 17 and 3 percent, respectively, compared to the same quarter last year.

Capital expenditures totaled approximately $19 6 million in this quarter that was up 26% from $15 6 million in the prior year period due to increased tunnel and ramp development and exploration activities at both operations as well as modestly higher investments in equipment and facilities at Yang.

We ended the quarter with $198 2 million in cash and cash equivalents and short term investments that's up 5% compared to the 189 that we reported as of September 30th.

And just a reminder, this cash position does not include our investments in associates and other companies, which had a total market value of approximately $140 million on December 31st.

As we previously reported in terms of production in the quarter, we mined 345273 tonnes of ore and milled.

312500 tonnes of ore those numbers were up 17, and 3% respectively compared to the same quarter last year. The increase in mine tonnage reflects the stockpiling of just.

Lon Shaver: The increase in mine tonnage reflects the stockpiling of just over 60,000 tons of ore at Ying, which will be processed in the current quarter during the Chinese New Year holiday, which is right now. We produce on a consolidated basis approximately 1.7 million ounces of silver, 1.3 thousand ounces of gold, 16.8 million pounds of lead, and 7.4 million pounds of zinc in the quarter.

Just over 60000 tonnes of ore at Yang, which will be processed in the current quarter during the Chinese new year holiday, which is on right now.

We produced on a consolidated basis, approximately 1.7 million ounces of silver.

1.3 thousand ounces of gold $16 8 million pounds of lead and $7 4 million pounds of zinc in the quarter are these figures as a as mentioned represented decreases of 9% and 16% respectively in silver and lead production compared to last year's Q3, the decrease mainly reflects.

Lon Shaver: These figures, as mentioned, represented decreases of 9% and 16%, respectively, in silver and lead production compared to last year's Q3. The decrease mainly reflects lower head grades at Ying and GC due to mining sequencing, and we also did, as mentioned, have increased ore stockpiles at Ying. It also reflected increased gold ore mining and milling at Ying during the quarter, which contributed to a 22% increase in gold production compared to the prior year. Year to date, we've produced 5.1 million ounces of silver, 5.4 thousand ounces of gold, 51 million pounds of lead, and 19 million pounds of zinc. In this current Q4, we expect to produce approximately 1.1 to 1.3 million ounces of silver, between 1.2 and 1.3 thousand ounces of gold, between 11.5 and 12.5 thousand ounces of gold, and approximately 11.5 million pounds of lead and 4.5 to 5 million pounds of zinc.

Lower head grades at young and G. C. Due to mining sequencing and also we did a as mentioned have increased ore stockpiling at Yang I'd also reflect an increase gold ore mining and milling at young during the quarter, which contributed to a 22% increase in gold production compared to the prior year quarter.

Year to date, we've produced $5 1 million ounces of silver five 4000 ounces of gold 51 million pounds of lead and 19 million pounds of zinc in this current Q4, we expect to produce approximately one one to 1.3 million ounces of silver between 1.2 and 1.3.

Thousand ounces of gold.

11.5.

Approximate $11 5 million pounds of lead and four five to 5 million pounds of zinc.

Lon Shaver: Those would be increases of up to 17% and 30%, respectively. 20% and 40% for silver, gold, lead, and zinc, respectively, compared to the Q4 period of last year. The cash cost corporately per ounce of silver net of byproduct credits was negative 96 cents in the third quarter compared to negative $1.15 in the prior quarter, with this increase mainly due to less silver sold resulting in higher unit production costs, byproduct credits, and a decrease of 2.5 million in byproduct credits. But this was offset by a 4% depreciation in the Chinese RMB against the U.S. dollar over the same prior year.

That would be increases of up to 17% 30%.

20% and 40% for silver gold lead and zinc, respectively compared to the Q4 period of last year.

The cash cost corporately mm per ounce of silver net of byproduct credits was negative 96 cents in the third quarter.

Compared to a negative $1 15 in the prior year quarter with this increase mainly due to less silver sold resulting in higher unit production costs before by product credits and a decrease of $2 5 million and byproduct credits.

But this was offset by a 4% depreciation in the Chinese RMB against the U S dollar over the same prior year period.

Lon Shaver: The all-sustaining cost per ounce of silver metal by-product credit was $1133 compared to $928 in Q3 of fiscal 2023, with the increase primarily reflecting the same factors impacting the cash cost I just mentioned, offset by a decrease of half a million in all-sustaining capital expenditures compared to the prior year period. Now, let's turn to our growth projects. To enhance operational efficiencies at Ying, we have previously disclosed our plan to transition certain mining areas from cut and silver stirring to shrinkage stoping, which will allow for increased mechanization. We have started to take delivery of 20 new LHDs, so those are the scoop shovels for underground mining, which will be employed in that fashion.

The all in sustaining cost per ounce of silver net of byproduct credits was 11 33 compared to 928 in Q3 of fiscal 2023 with.

With the increase primarily reflecting the same factors impacting the cash cost I, just mentioned offset by a decrease of a half.

Half a million and office all in sustaining capital expenditures compared to the prior year period.

So, let's turn to our growth projects to enhance operational efficiencies at Yang we have previously disclosed our plan to transition certain mining areas from cut and fill or is doing to shrinkage stoping, which will allow for increased mechanization. We have started to take delivery of 20, New L. H D. So those are the scoop shovels.

For underground mining, which will be employed in that fashion.

Lon Shaver: Some of our expenditures in this period are related to improving access to these new areas and to shorten travel times to other mining areas. To address the anticipated higher dilution from the shrinkage mining method, we are planning to install three XRT ore sorters, the first of which has been installed at the number 2 mill at Ying, and it's currently in trial operation.

And some of our expenditures are in this period or our AR related to improving access.

Two of these new areas and to shorten our travel times to other mining areas.

To address the anticipated higher dilution from the shrinkage mining method we.

We are planning to install three XR T ore sorters with first having been installed at the number two mill at Yang and it's currently in trial operation.

Lon Shaver: As we previously disclosed, Silvercorp is exploring alternative strategies to expand Ying's processing capacity. Our current plan is to add a new 1,500 ton per day production line at the number 2 mill to increase the production capacity at Ying to 4,000 tons per day. This expansion is expected to be completed in the upcoming fiscal year. In addition, we have spent a total of $9.9 million on the construction of the new tailings storage facility at Yang to date, and construction is on track for completion later this year.

As we've previously disclosed silver Corp is exploring alternative strategies to expand our processing capacity. Our current plan is to add a new 1500 ton per day production line at the number two mill to increase the production capacity at Yang to 4000 tonnes per day. This expansion is expected to be completed.

In the upcoming fiscal year.

In addition, we spent a total of $9 9 million on the construction of the new tailings storage facility at Yang to date and construction is on track for completion later this year.

Lon Shaver: We'll provide additional details on these items in our fiscal 2025 guidance, which will be released along with our fiscal 2024 production results. Additionally, we plan to release updated mineral resources and reserve estimates and mine plans for both Ying and GC by the middle of this year. The updated technical reports will incorporate all technical work programs, including drilling, completed up to the end of 2023 and should provide more details on what to expect from both operations near and longer term. As it relates to Kuan Ting, the satellite project located north of Ying, the company has completed environmental, water, and soil assessments. These reports have been approved by the relevant provincial authorities. An updated mineral resource estimate report.

We will provide additional details on these items in our fiscal 2025 guidance, which will be released along with our fiscal 2024 production results in April.

Additionally, we plan to release, our updated mineral resources and reserve estimates and mine plans for both E. N G. C by the middle of this year. The updated technical reports will incorporate all technical work programs, including drilling completed up to the end of 2023 and should provide more details on what to expect from both operations.

<unk> near and longer term.

As it relates to quantifying the satellite project located north of Yang.

The company has completed environmental water and soil assessments. These reports have been approved by the relevant prevention.

An updated mineral resource estimate report prepared in accordance with Chinese standards. Just also been reviewed and approved by the province. Furthermore, a report incorporating the mineral resource development and utilization plan reclamation plan and environmental rehabilitation plan has been reviewed and approved by an external expert panel.

Lon Shaver: Baretto, in accordance with Chinese standards, has also been reviewed and approved by the province. Furthermore, a report incorporating the Mineral Resource Development and Utilization Plan, Reclamation Plan, and Environmental Rehabilitation Plan has been reviewed and approved by an external expert panel. A few outstanding approvals are still required before development can begin, and we will provide additional details on Corn Bank when they are available. Turning to Orcorp, with respect to our Orcorp acquisition on December 26, 2023, Silvercorp and Orcorp entered into a bid implementation deed, whereby we agreed to acquire, by means of an off-market takeover offer, all of the Orcorp shares not already owned by Silvercorp for consideration comprising 0.0967 common shares of Silvercorp and $0.19 Australian in cash per Orcorp share.

You outstanding approvals are still required before development kind of again and we will provide additional details on corn paying when they are available.

Turning to our Corp are with respect to our or Corp acquisition on December 26, 2023, Silver Corp, and or Corp entered into a bid implementation deed.

Whereby we've accreted agreed to acquire by means of an off market to takeover offer all of the oral Corp shares are not already owned by Silver Corp. For a consideration comprising a 0.0967 common shares of Silver Corp, and 19 cents, Australia and cash for all Corp shares.

This was the same consideration that we had in the scheme that or Corp. Shareholders would have voted on in early December.

Lon Shaver: This is the same consideration that we had in the scheme that Oracorp shareholders would have voted on in early December. The OrcCorp Board is again unanimously recommending that OrcCorp shareholders accept the offer. The takeover offer document was dispatched to OrcCorp shareholders in mid-January, and on February 1st, we received a merger clearance certificate from the Tanzanian Fair Competition Commission providing unconditional merger control approval for the transaction. This approval represents the sole Tanzanian regulatory requirement needed to complete the transaction.

Our court board is again unanimously recommending that or corp shareholders accept the offer.

The takeover offer document was dispatched to or Corp shareholders in mid January and on February 1st we received a merger clearance certificate from the Tanzania unfair competition Commission, providing unconditional merger control approvals for the transaction.

This approval represents the Sol, Tanzania and regulatory requirement.

To complete the transaction our offer is open for acceptance by or Corp, shareholders until February 23rd unless extended and we look forward to providing the market with updates on the transaction over the coming weeks.

Operator: Our offer is open for acceptance by Allcorp shareholders until February 23rd, unless extended, and we look forward to providing the market with updates on the transaction over the coming weeks. And with that, operator, I'd like to open the call for questions. Thank you, sir. Ladies and gentlemen, we will now conduct the question and answer session. If you would like to ask a question, please press star followed by the number 1 on your telephone keypad. If you would like to win the golf press star 2, If you're using a speakerphone, please switch the headset on before pressing any key.

And with that operator, I'd like to open the call for questions.

Thank you, Sir ladies and gentlemen, we will now open.

The question and answer session.

If you would like to ask a question. Please press star followed by the number one on your telephone keypad.

If you would like to withdraw press star two.

If you're using a speaker please lift the handset before pressing the keys.

Your first question.

Lucas: Your first question comes from Lucas from Asset from Chemical Genuity. Your line is now open, payalong. And thanks for taking my question. I'm curious about, yeah, I'm just curious about the bid process so far. I mean, you're sort of halfway through the bid period for Silvercorp. How is the upgrade journey so far? Any comments on that at all?

Comes from.

Lucas Beaumont, that's from Canaccord Genuity. Your line is now open.

And thanks for taking my question.

I'm curious about.

Yeah, Hi, just curious about the the bid process, so far and you're halfway through the big period for Corp.

How is the uptake.

So far can you comment on that at all.

We've been gaining momentum I'm, obviously, the board with their recommendation.

Lon Shaver: Yeah, we've been gaining momentum. Obviously, the board, with their recommendation, also led to them going through and tendering, and as it currently stands, and this is, you know, publicly reported filings, we're currently at 20.1%, which includes the shares that we already owned prior to commencing. Great, and then what strategies are there if you don't get to that 50% just, you know, with two weeks left? Do you guys intend to... or what other opportunities do you have on the table? Well, there are a number of considerations.

Also led to them going through and tendering and as it currently stands in this as you know publicly reported filings. We're currently at a 20.1%.

Which includes the shares that we already owned prior to commencing.

Great and then what strategies are there if you don't get to that 50%.

There being two weeks left do you guys intend to.

Obviously extended or what other opportunities do you have on the table.

Well, there's a number of considerations as you said a two weeks to go a lot can happen in two weeks and with a positive response and our share price like we're experiencing today.

Lon Shaver: As I said, two weeks to go; a lot can happen in two weeks. And with a positive response to our share price, like we're experiencing today, it certainly changes the dynamic. We like the fact that we've got the only open and actionable offer on the table, and it's got full board support from Orcorp. A number of shareholders have indicated they're going to be following the board's recommendation, and we're in touch and in regular dialogue with a number of the key shareholders and understand what their intentions are with respect to tendering and timing leading up to that expiry. Next time,

Certainly changes the dynamic.

You know we like the fact that we've got the only opening an actionable offer on the table and it's got a full board support from our Corp. A number of shareholders have indicated they're going to be following the board's recommendation.

And we're in touch and in regular dialogue with them or other key shareholders and understand our.

What their intentions are.

With respect to our tendering and timing you know leading up to that that expiring.

Makes sense. Thank you.

Operator: Your next question comes from Joseph Rieger from Rob 10 KM. Your line is now open. Please go on and tune in to answer some of my questions. Hi, Jeff.

Thanks Lucas.

Your next question comes from Joseph Reagor.

Ralph M. Gabe your line is now open.

Hey, Ron and team thanks for taking my questions.

Hi, Joe.

Joseph Rieger: Good to have you here. Thank you. So, the commentary you guys made about the shrinking of the product resulting in higher-than-anticipated impact on grade, how can you quantify that? Like, what was the percentage of dilution? It's not that that's necessarily playing out right now; this is sort of a gradual process.

Good day to you.

So.

On the the commentary you guys made about the shrinkage stoping, resulting in a higher than anticipated.

Cause like impact on grade.

What can you quantify it like what was the percentage of the law.

Oh I see.

It's not that that's necessarily playing in right. Now this is sort of a gradual process and.

Lon Shaver: It's almost like we're flipping a switch and saying that we're going from shrinkage, starting from cut and fill 100% to shrinkage. It's going to be sort of a scope by scope, area by area decision, and it's going to be happening over time, so it's one of those that's just been... factoring in to the results to date that much. Okay, I'm not the next one they said, but... What is the expected difference, though, if you're on any given soap for dilution if you use shrinkage instead of long haul?

It's not like flipping a switch and saying that we're going from a shrinkage sorry from cut and fill 100% to shrinkage, it's going to be.

Sort of a stope by stope area by area decision and it's gonna be happening over time. So it's not as though this has been you know factoring in to the results to date that much.

Oh, okay.

I must have misunderstood but.

Yep.

What is the expected difference, though if you're.

On any given stope for dilution if you use shrinkage instead of long haul.

Well, yeah, and it's not it's not long hauls, just cut and fill and I have to Oh Gee.

Lon Shaver: Well, yeah, and it's not long haul, so it's cut and fill, and I have to check my memory and go back to what was published in a previous technical report, because it is in there as it relates to how it has operated in the past. If I recall, it's going from, you know, a five to 10 for cut and fill to sort of 15 to 20, for shrinkage. But I figured I'd have to go back and pull the exact numbers from the technical report. So it is an uptick, but the trade-off is that from a labor intensity standpoint and productivity or gains to be made. On the cost side, in terms of unit costs for delivering that, and then, as mentioned, where you might have that higher dilution from shrinkage, we look to address that with the XRT sorters that are going on.

Check my memory and go back to that what was published in the previous.

Previous technical part because it is in there as it relates to how it's operated in the past.

If I recall, it's sort of going from a you know a five to 10 for <unk> for a cut and fill to sort of 15 to 20.

For shrinkage.

But forgive me I'll have to go back and pull the exact numbers from the technical report. So it is an uptick but the the tradeoff is that from a labor intensity standpoint.

And and productivity gains to be made.

On the cost side in terms of unit cost for delivering that and then as mentioned.

Where you might have that higher dilution from shrinkage a wheel.

To address that with the extra Archie sorters that are going on it yet.

Lon Shaver: Okay, and then as far as the growth that Ying is pursuing, the 1500 ton per day new topless in line, and the timing of that. When do you guys say next fiscal year, but is there more precise timing, Q4, Q3, you know, that we should expect? And then what do you think the total time to ramp up the additional capacity might look like?

Okay.

Then as far as the growth that Yang the 1500 ton per day, new processing line.

And the timing of that when do you guys. You said next fiscal year, but is there more precise timing.

Q4, Q3, you know what.

We should expect and then what.

What do you think the total time to ramp up the additional capacity might look like.

Hum.

Lon Shaver: Um... Well, it's expected the full increase could be completed over the course of the next fiscal year. In terms of the timing for each additional ton, we don't have that in a plan to provide currently, but we'll have more details in the next couple of months as well as with the reporting for, and guidance for fiscal 2020. I think what I would add is just that, from looking back at what we were contemplating before, and just recall that, Well, we're looking at building an entirely new mill at a $30 million cost, this increase will be significantly less in terms of cost. And on a net basis, we're going to get to 5,000 times per day here based on this increase. Keeping mill number one running and adding this capacity, we would be running at 4,000, but at a much less..., you know, cause for that incursion. That incursion.

Well, it's it's expected that the full increase could be completed over the course of the next fiscal year.

In terms of the timing for sort of each additional ton you don't have that in our plan to to provide currently but we'll have more details you know in the next in the next couple of months and as well with the reporting for.

The guidance for fiscal 2025.

Okay.

Okay.

But I think I think I think what I would add is just that from you know looking back at what we were contemplating before.

And and just recall that.

We're looking at building a.

And entirely new mill.

$30 million cost.

This increase will be significantly less in terms of cost.

And on a net basis you know we were we're going to get to 5000 tonnes per day here based on this increase keeping mill number one running and adding this capacity we would be running at 4000 tonnes.

But at a much less.

No cost for that for that for that increase.

Okay Fair enough all right I'll turn it over thank you.

Operator: Okay, fair enough. All right, I'll turn it over to you. Thank you. Thanks, John. Your next question comes from... David Shaffer-Golden from Geek Capital. Your line is now open.

Thanks, Joe.

Yeah.

Your next question comes from.

It looks to have a gallon from <unk> capital. Your line is now.

Hi, congratulations on a good quarter.

David Shaffer-Golden: Hi Alon, congratulations on your quarter. Thank you. One thing that really jumped out at me in yesterday's release is how much mining and milling costs dropped at GT, sort of quarter over quarter. Could you provide a comment on that, like how was that drop in just one quarter achieved? Well, if you're referring back to TCU, I mean, obviously GC's had some hiccups this year and hasn't been running, you know, either full capacity or optimally.

Thanks Felix.

So one thing that really jumped out of me in yesterday's release, just how much mining and milling costs dropped to chiesi.

Quarter on quarter over quarter could you just provide a comment on that like how was that how was that drop in just one quarter achieved.

Ah well, if you're if you're referring back to Q2, I mean, obviously gcs had some some hiccups this year and hasn't been running.

You know either at full capacity or are optimally and so when you've got that sort of law of small numbers here in place any kind of changes in that throughput rates have a big impact when you look at the fixed cost allocation.

Lon Shaver: And so when you've got that sort of law of small numbers here in place, any kind of changes in that throughput rate have a big impact when you look at the FISCOS allocation. So now that we're back up, running at a more normal and sustainable level, we're seeing the kind of cost that we would look to realize. And regarding the tailing storage facility, I think there's been about $15 million spent on it so far. And how much is the total budget allocated to the construction of this facility? Well, that's a really good question. We previously reported $38 million as the number, and... As of today, we are into it to the tune of about $9.9 million. It's a little premature, but some of the early indications are that we will come in, I don't want to get hung out here, but I would say meaningfully below that $38 million number.

So now that we're back up running at more normal and sustainable level, we're seeing in the kind of costs that we would look to to realize.

Got you understand and regarding the tailing storage facility. So I think there is a I think there has been about $15 million spent and it's so far.

How much what's the total budget allocated to construction on this thing.

Well, that's a really good question, we've previously reported 38 million as the number and.

As of as of today, we are into it to the tune of about $9 9 million.

It's a little premature but some of the early indications are that we will come in.

I you know I don't want to get hung out here, but I would say you know meaningfully below that 38 million dollar number.

Lon Shaver: Gotcha, understood. Thank you very much, Robert. That'd be a positive surprise.

Got you understood. Thank you very much.

Lon Shaver: Okay, all right, looking forward to it. Well, thanks, Yvonne. Thanks again, and congrats on a good quarter, Adam. This concludes the question and answer session. I would now like to turn the conference over to the log chamber for any closing remarks. Well, it's great to thank you, operator, and thanks, everyone, for joining us today. We'll wrap up the call here. Please, if anyone has any additional questions, like always, feel free to call or e-mail us. We will be happy to take your questions and respond in due course. I look forward to updating you in a few months on our fiscal 2024 results.

That'd be a positive surprise.

Okay, Alright, and looking forward to it thanks, everyone. Thanks, again and congrats on a good quarter again. Thank you. Thanks guys.

This concludes the question and answer session I would now like to turn the conference over to La cheaper Portland for any closing remarks.

Well, it's great to that thank you operator, and thanks, everyone for joining us today.

We'll wrap up the call here, but please if anyone has any additional questions like always feel free to call or email us happy to take your questions and respond in due course look forward to updating you in a few months on our fiscal 2024 results have a great day.

Lon Shaver: Have a great day. This concludes today's conference. You may now disconnect your lines. Thank you for participating, and have a wonderful day, www.SilvercorpMetal.com

This concludes today's conference you may now disconnect. Your lines. Thank you for participating and have a wonderful day.

Yeah.

Yeah.