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Silvercorp Reports Financial and Operating Results for the Third Quarter of Fiscal 2013

Wednesday, February 13, 2013

Silvercorp Reports Financial and Operating Results for the Third Quarter of Fiscal 201317:05 EST Wednesday, February 13, 2013VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 13, 2013) -Silvercorp Metals Inc. (TSX:SVM)(NYSE:SVM) ("Silvercorp" or the "Company") today reported its unaudited financial and operating results for the third quarter ended December 31, 2012 ("Q3 Fiscal 2013").This earnings release should be read in conjunction with the Company's Management Discussion & Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on SEDAR at www.sedar.com and are also available on the Company's website at www.silvercorp.ca. All figures are in United States dollars unless otherwise stated.THIRD QUARTER HIGHLIGHTSSilver production of 1.52 million ounces; Gold production of 5,676 ounces; Sales of $58.7 million; Adjusted net income of $14.9 million, or $0.09 per share; Cash flow from operations of $27.8 million, or $0.16 per share; Cash cost of negative $0.17 per ounce of silver at the Ying Mining District; Payment of $4.3 million, or CAD$0.025 per share, in quarterly dividends to shareholders; Reported high grade silver-lead-zinc intercepts from the SGX mine and the GC project. FINANCIALSIn Q3 Fiscal 2013, net income attributable to equity holders of the Company was $5.2 million or $0.03 per share, which includes a $9.6 million non-cash accounting charge to write down the Company's investment in an associate company to reflect its current share price. Adjusted net income was $14.9 million, or $0.09 per share. Adjusted net income excludes non-recurring or unusual non-operational items and acts as a supplemental financial measure that provides a more complete assessment of the Company's net income for the period. In the quarter ended December 31, 2011 ("Q3 Fiscal 2012"), the Company reported net income of $20 million or $0.12 per share. There were no adjustments to net income of the prior periods.When compared to net income of $9.5 million in the second quarter of Fiscal 2013, adjusted net income in the current quarter increased by $5.4 million or 56%, as a result of increased metal production and sales, and a higher realized silver price.For the current quarter, the Company realized sales of $58.7 million compared to $61.9 million in Q3 Fiscal 2012. The decrease in sales was primarily due to lower base metal production compared to Q3 Fiscal 2012 and was partially offset by additional gold revenues from the BYP mine. During the quarter, the Company sold 1.52 million ounces of silver and 5,676 ounces of gold, compared to 1.55 million ounces of silver and 2,879 ounces of gold in Q3 Fiscal 2012.Cost of sales in Q3 Fiscal 2013 was $21.2 million compared to $18.3 million in Q3 Fiscal 2012 and included cash costs of $17.1 million compared to $14.5 million in Q3 Fiscal 2012. The increase in cost of sales was primarily due to a 31% increase in ore production, offset by a reduction in overall production cost, which included mining, shipping and milling costs, from $84.90 per tonne to $83.11 per tonne in Q3 Fiscal 2013.Gross profit margin in Q3 Fiscal 2013 was 64%, compared to 70% in Q3 Fiscal 2012.Cash flow from operations in Q3 Fiscal 2013 was $27.8 million or $0.16 per share, compared to $31.6 million, or $0.18 per share, in Q3 Fiscal 2012.For the nine months ended December 31, 2012, net income was $20.9 million or $0.12 per share with adjusted net income of $30.5 million or $0.18 per share, compared to net income of $64.1 million or $0.37 per share, in the same prior year period. During the same comparative periods, sales were $148.5 million compared to $193.7 million, cost of sales was $56.7 million compared to $46.8 million, which resulted in a gross profit margin of 62% compared to 76%. Cash flow from operations was $71.0 million compared to $100.7 million in the same comparative periods. The overall decrease in net income compared to the prior year was mainly due to (i) lower silver price; in the current nine month period, net realized silver price was $23.76 per ounce, which is $4.70 lower compared to net realized silver price of $28.46 per ounce in the same prior year period; (ii) a decrease in base metal production as 54.5 million pounds of lead and zinc were produced in the current nine month period compared to $69.0 million pounds of lead and zinc in the prior year; and (iii) higher overall production costs as more ore was processed.OPERATIONSIn Q3 Fiscal 2013, on a consolidated basis, the Company produced 1.52 million ounces of silver, 5,676 ounces of gold, 16.4 million pounds of lead and 4.0 million pounds of zinc, compared to 1.55 million ounces of silver, 2,879 ounces of gold, 21.0 million pounds of lead and 3.5 million pounds of zinc in Q3 Fiscal 2012.Compared to production in the second quarter of Fiscal 2013, the Company produced 233,000 ounces more silver in Q3 Fiscal 2013 which was attributable to a 15% increase in ore mined and processed.For the nine months ended December 31, 2012, on a consolidated basis, the Company produced 4.03 million ounces of silver, 10,810 ounces of gold, 44.1 million pounds of lead and 10.5 million pounds of zinc, compared to 4.52 million ounces of silver, 6,785 ounces of gold, 58.1 million pounds of lead and 10.9 million pounds of zinc, respectively, in the same prior year period.1. Ying Mining District, Henan Province, ChinaIn Q3 Fiscal 2013, the Company mined 236,694 tonnes of ore at the Ying Mining District, an increase of 36%, compared to 174,077 tonnes in Q3 Fiscal 2012. During the quarter, metal production totalled 1.51 million ounces of silver, 1,285 ounces of gold, 15.6 million pounds of lead and 3.2 million pounds of zinc, compared to 1.54 million ounces of silver, 926 ounces of gold, 20.6 million pounds of lead and 3.5 million pounds of zinc in Q3 Fiscal 2012. By increasing ore production, the Company achieved comparable silver production compared to the same quarter last year. Compared with Q2 Fiscal 2013, silver production increased by 18% in Q3 Fiscal 2013.Head grades were 222 grams per tonne ("g/t") for silver, 3.2% for lead and 1.0% for zinc, compared to 296 g/t for silver, 5.5% for lead and 1.4% for zinc in the same quarter last year. The lower head grades were a result of the reduction in the cut-off grade for the Ying Mining District, following the recommendation in the 2012 National Instrument 43-101 ("NI 43-101") Technical Report.In Q3 Fiscal 2013, total and cash mining costs per tonne were $64.47 and $54.92 compared to $70.23 and $55.92 in Q3 Fiscal 2012, respectively. The decrease in total and cash mining costs is attributable to the increase in tonnes of ore produced during the current quarter as the lower cut-off grade allowed for the increase in shrinkage mining.For the nine months ended December 31, 2012, the Company mined 623,523 tonnes of ore at the Ying Mining District, and produced 4.01 million ounces of silver, 3,352 ounces of gold, 42.8 million pounds of lead, and 9.6 million pounds of zinc, compared to 526,825 tonnes of ore and production of 4.51 million ounces of silver, 2,629 ounces of gold, 57.7 million pounds of lead, and 10.9 million pounds of zinc in the same prior year period. Head grades were 224 g/t for silver, 3.4% for lead, and 1.1% for zinc compared to 290 g/t for silver, 5.2% for lead and 1.4% for zinc, over the same period last year.In Q3 Fiscal 2013, a total of 226,764 tonnes of ore were milled, an increase of 29% compared to 175,394 tonnes in Q3 Fiscal 2012. The cash milling cost per tonne decreased 15% from $14.76 in Q3 Fiscal 2012 to $12.61 in Q3 Fiscal 2013, and is attributable to the increase in tonnes of ore milled during the current quarter. For the nine months ended December 31, 2012, a total of 616,389 tonnes of ore were milled compared to 530,485 tonnes in the same prior year period. Over the same comparative period, the cash milling cost per tonne was $12.92 compared to $13.43.Total and cash costs per ounce of silver in Q3 Fiscal 2013 for the Ying Mining District were $1.52 and negative $0.17, compared to negative $2.67 and negative $4.64, in Q3 Fiscal 2012, respectively. For the nine months ended December 31, 2012, total and cash costs per ounce of silver were $1.66 and negative $0.26, compared to negative $3.52 and negative $5.28, in the same prior year period, respectively. The increase in total and cash costs per ounce of silver was due to higher production costs and a decrease in by-product metal credits.The operational results for the past five quarters at the Ying Mining District are summarized in the table below:Quarterly opertional results - Ying Mining DistrictQ3 2013Q2 2013Q1 2013Q4 2012Q3 201231-Dec-1230-Sep-1230-Jun-1231-Mar-1231-Dec-11Ore Mined (tonne)Direct Smelting Ore (tonne)2,3342,4422,2502,7614,151Stockpiled Ore (tonne)234,360203,369178,768132,986169,926236,694205,811181,018135,747174,077Run of Mine Ore (tonne)Direct Smelting Ore (tonne)2,3342,4422,2502,7614,151Ore Milled (tonne)224,430200,728184,205133,848171,243226,764203,170186,455136,609175,394Metal SalesSilver (in thousands of ounces)1,5081,2771,2231,0821,542Gold (in thousands of ounces)1.31.30.81.01.0Lead (in thousands of pounds)15,64213,40313,71314,66820,551Zinc (in thousands of pounds)3,2313,4122,9742,6373,525Head Grade of Run of Mine OreSilver (gram/tonne)222224227275296Lead (%)3.23.43.65.25.5Zinc (%)1.01.21.11.41.4Recovery Rate of Run of Mine OreSilver (%)93.392.791.793.293.3Lead (%)95.194.394.096.496.4Zinc (%)70.469.663.064.667.7Cash Mining Cost ($ per tonne)54.9253.2755.4757.6255.92Total Mining Costs($ per tonne)64.4762.5669.0273.5270.23Cash Milling Cost ($ per tonne)12.6112.1214.1716.8414.76Total Milling Cost ($ per tonne)14.2013.8416.0519.4016.42Cash Cost per Ounce of Silver ($)(0.17)(0.74)0.16(4.22)(4.64)Total Production Cost per Ounce of Silver ($)1.521.052.49(1.84)(2.67)2. BYP Mine, Hunan Province, ChinaIn Q3 Fiscal 2013, the Company mined 35,558 tonnes of ore at the BYP mine with a gold head grade of 3.7 g/t compared to 41,197 tonnes and a gold head grade of 2.3 g/t in Q3 Fiscal 2012. During the quarter, 4,309 ounces of gold were sold at a cash cost per ounce of gold of $266 compared to 1,841 ounces of gold sold at cash cost per ounce of gold of $547 in the same period last year. In Q3 Fiscal 2013, total and cash mining costs per tonne were $70.48 per tonne and $24.72 per tonne compared to $40.27 and $19.36 in Q3 Fiscal 2012, respectively.DEVELOPMENT AND EXPLORATION1. Ying Mining District, Henan Province, ChinaSGX (Ying) MineAs at the end of Q3 Fiscal 2013, the Company had completed a total of 1,670 metres ("m") of ramp development as part of a 5,200m ramp at the SGX mine. The ramp is designed to follow the main S7-1 and S8 veins from the 450m elevation to the 150m elevation and then bottom at the zero metre elevation, where it will be connected to three existing vertical blind shafts to provide ventilation and access. The Company expects to complete construction of the ramp in calendar year 2015. As construction progresses, the ramp is expected to increase production capacity at the SGX mine starting from the second quarter of Fiscal 2014.In Q3 Fiscal 2013, the Company also developed 8,800m of horizontal tunnels and completed 20,500m of underground drilling at the SGX mine.During the quarter, to support the ongoing expansion work at the SGX mine, the Company has completed the design work for a new 5,000 square metre ("m2") surface facility which will include offices and dormitories. Construction is expected to commence in March 2013.LM Mine and LM Mine West ("LM West")At the LM mine, tunnel development on five mining levels continued and new stopes at both the 750m elevation and the 700m elevation were put into production during the quarter which contributed to the increase in ore mined.At the end of Q3 Fiscal 2013, the Company completed a total of 1,482m of the development work for a 4,800m access ramp at the LM West. The ramp was collared at the 980m elevation and is designed to provide access to veins LM7, LM8, LM10, LM11, LM12, LM13 at the northern end of LM West and veins LM14, LM16, and LM17 at the southern end of LM West. The upper portion of the ramp has already been connected to existing tunnels at LM West resulting in improved tunnel ventilation and hauling capacity.At LM West, Shaft 969 is on schedule to become operational in the coming quarter and is expected to commence ore production during the third quarter of Fiscal 2014. Once Shaft 969 and the access ramp and all of the mining levels are completed down to the 500m elevation at LM West in Fiscal 2015, the combined production capacity of the LM and LM West mines is expected to be 300,000 tonnes of ore per year.To support the expansion in operations at the LM mine and LM West, the Company expects to commence construction of a 3,000m2 surface facility, including offices and a dormitory building during the next quarter.In Q3 Fiscal 2013, the Company also developed 4,900m of decline and horizontal tunnels and completed 13,800m of underground drilling at the LM mine and LM West.TLP MineIn Q3 Fiscal 2013, the Company developed over 5,200m of horizontal tunnels and completed 8,100m of underground drilling during the quarter.HPG MineIn Q3 Fiscal 2013, the Company developed over 3,100m of decline and horizontal tunnels and completed 4,600m of underground drilling.Adoption of the Shrinkage Mining MethodAs reported in the prior quarter, following a reduction in the cut-off grades for the Ying Mining District Resource, as per the recommendation of the 2012 NI 43-101 Technical Report prepared by AMC Consultants, the Company has begun to gradually reduce the use of the re-suing method and increase the use of the shrinkage method for mining. This change is expected to increase ore production and lower the cost of extraction per tonne thus increasing cost efficiencies at the Ying Mining District. The Company adopted this mining strategy in October 2012 and implementation will gradually occur over the next six months.To successfully implement the new mining method, an intensive infill drill program was initiated to more clearly define the ore body boundaries, as they can no longer be visually identified by the occurrences of lead and zinc sulfide as practiced previously (since the elevated silver content occurring in alteration rocks does not contain visually identifiable galena) and as such need to be identified using assay results.2. GC Project, Guangdong Province, ChinaThe Company continued to make progress with the development of the GC project towards production.As at the end of Q3 Fiscal 2013, 476m of the 618m main shaft was completed. The shaft is expected to reach its designed elevation of -370m in the second quarter of Fiscal 2014. Installation of the hoist system, including hoist tower, for the shaft is expected to be completed by the beginning of Fiscal 2015.In Fiscal 2014, the Company will use the main ramp and the exploration ramp access for mining. The main access ramp is now 91% complete with a cumulative total of 2,011m of the 2,210m ramp having been developed as at the end of the current quarter. Development for mining stopes through the main ramp along the V2 vein has accessed at the 10m elevation of the V2 veins through cross-cut tunnels. The Company is assessing the most suitable mining method amendable to the V2 vein as recent infill drilling has indicated that the V2 vein's true width can be more than 30m.As of the end of the quarter, 1,334m of the 4,600m exploration ramp was completed. Once the exploration ramp is completed, it will provide access to all known veins within a horizontal distance of 250m. The exploration ramp has accessed the V9, V9-1, V9W-1 and V9W-2 vein groups at the 100m, 50m and 0m elevations through cross-cut already. The exploration ramp is expected to cut through the V2 vein at -50m elevation by March 2013. The exploration ramp has also connected to the main ramp at the 100m and 0m elevations, and connected to the main shaft at the 100m elevation to provide ventilation and safety exit.The construction of the 1,600 tonne per day ("t/d") floatation mill had been completed. The Company will commence trial production after the Chinese New Year Holiday, which ends before the end of February 2013. The trial runs, which are expected to last several months, will fine tune the mill circuit to achieve the desired metallurgical recovery rates for silver, lead, zinc, tin, and sulphur in concentrates. The construction of the dry stack tailings storage facility and the related safety and environmental protection facilities is expected to be completed by the end of March 2013.During the 2012 calendar year, the construction of the mill and underground development work at the GC project was constrained by insufficient power supply. The construction of a new power supply system, consisting of a 5.8 kilometre power line, a 110 KV substation, and a 10KV safety back-circuit began in late September 2012 to provide sufficient power to the site. By the end of the current quarter, construction of the new power supply system was complete and it has passed an inspection by local utility authorities. Since then, power at the GC project has been supplied through this new system, which has sufficient capacity to even support production expansion in the future.In August 2012, the National Development and Reform Commission ("NDRC") of China introduced a new state regulation, FaGaiTouZi (2012) No. 2492, which was implemented by the Guangdong Provincial government during the quarter. According to the new regulation, all major capital asset investment projects in China are subject to a Social Impact and Stability Assessment ("SISA") review. Accordingly, the Company has engaged a qualified Chinese engineering firm, Guangdong Metallurgical and Architectural Design Institute ("GMADI") to complete a SISA Review report. The report has gone through a local community consultation and has received a positive review by an independent qualified panel commissioned by local authorities. The Company will submit the report to the NDRC of Guangdong Province for final approval and filing after the Chinese New Year.To achieve formal commercial production, the Company is required to pass a series of regulatory inspections to ensure it has complied with safety and environmental protection requirements, described in the previously submitted reports to regulators. Those reports include the Mine Design and its related Safety Measures and Facilities Report ("MDSMF"), Environmental Assessment Study Report, Soil Conservation Report, and Tailings Storage Facility Safety Measures Report.The Administration of Work Safety of Guangdong Province ("AWSGP") shall perform a MDSMF inspection, which is expected to focus on areas of rock stability and treatment, the ventilation system, water sunk and pump station, underground power supply system, and safety escape system. As subsequent improvements were made during mine development to adapt to actual underground rock conditions, the Company may be required to modify the MDSMF and re-submit to AWSGP. Accordingly, the Company has engaged GMADI to conduct a review and comparison of the completed mine development work with the original MDSMF, in order to identify and re-submit any required modifications. Once the final inspection is completed by the AWSGP, a Safety Production Permit shall then be granted. The Company expects to complete the required Phase One MDSMF and pass the inspection by the second quarter of Fiscal 2014.The Company is also required to pass an environmental protection facility inspection by the Guangdong Department of Environment Protection. The construction of the required environmental protection facilities for the mill, mine, tailings storage, as well as implementation of soil conservation measures is well underway. The Company expects to complete the construction of these facilities and pass the inspection by the end of April 2013.Prior to passing these inspections and the commencement of commercial production, trial mining production and trial processing at the mill will commence after the Chinese New Year holiday.In Q3 Fiscal 2013, the Company completed 6,600m of diamond drilling using five underground drill rigs and two surface drill rigs currently on site at the GC project. During the quarter, exploration, mine development, mill and facility construction expenditures at the GC project were $18.5 million, with development expenditure of the project now totalling $58.5 million as of the end this quarter. The cost of building the GC mine and mill is expected to be within the original budget of approximately US$70 million.3. BYP Mine, Hunan Province, ChinaIn Q3 Fiscal 2013, the Company continued with the installation of shaft equipment and construction of the head frame for the 265m deep shaft. Once completed, this shaft which will facilitate mining of the #3 gold mineralization body and the #5 zinc and lead ore body. In addition, the construction of a 1,500 t/d tailings-backfill facility is expected to be completed in the first quarter of Fiscal 2014.4. X Mines, Henan Province, ChinaAt the X mines (the XHP and XBG projects), the construction of two declines is currently underway with completion expected in the first quarter of Fiscal 2014. During the quarter, approximately 1,300m of tunneling and 6,300m of diamond drilling were also completed at the X mines.The X mines will continue to focus on an exploration program that will include surface and underground mapping and systematic sampling as well as surface and underground diamond drilling, with the goal of defining an initial NI 43-101 compliant mineral resource. Exploration and mine development at the X mines will be partially supported from cash flows generated from limited development ore and existing ore stockpiles.5. RZY Project, Qinghai Province, ChinaIn December 2012, the Company signed a binding letter of agreement to sell its interest in the RZY project to New Pacific Metals Corp. through the sale of 80% interest of its wholly owned subsidiary Fortress Mining Inc. and its 82% Qinghai Found Mining Co., Ltd. for a cash consideration of $3.5 million. The transaction is pending approval from the Toronto Stock Exchange.6. Silvertip Project, British Columbia, CanadaThe Company is in the process of preparing a Small Mine Permit application to be submitted to the British Columbia Ministry of Energy and Mines. A Small Mine Permit will allow a 75,000 tonnes per year mining operation.CONFERENCE CALL AND WEBCAST INFORMATIONAn investor conference call will be held on Thursday, February 14, 2013 at 8 a.m. Pacific Time (11 a.m. Eastern Time) to discuss the results. Participants may join the call by dialing 1-866-226-1793 toll-free or 1-416-340-2218 for calls outside of Canada and the U.S. Members of the media are invited to attend on a listen-only basis.A live audio webcast of the conference call, together with supporting presentation slides, will be available on the home page of the Company's website, www.silvercorp.ca. The webcast will be archived and available on the Company's website for up to one year.An audio replay will be available until February 21, 2013 by calling 1-800-408-3053 toll free or 1-905-694-9451 for calls outside Canada and the U.S. and entering pass code 9248269.About SilvercorpSilvercorp is a low-cost silver-producing Canadian mining company with multiple mines in China which has paid a cash dividend since 2007. The Company is currently developing the GC project in southern China which it expects will become its next operating mine in 2013. The Company's vision is to deliver shareholder value by focusing on the acquisition of under developed projects with resource potential and the ability to grow organically. For more information, please visit our website at www.silvercorp.ca.CAUTIONARY DISCLAIMER - FORWARD-LOOKING STATEMENTSCertain of the statements and information in this press release constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian provincial securities laws. Any statements or information that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "believes", "plans", "projects", "estimates", "assumes", "intends", "strategies", "targets", "goals", "forecasts", "objectives", "budgets", "schedules", "potential" or variations thereof or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements or information. Forward-looking statements or information relate to, among other things: the price of silver and other metals; the accuracy of mineral resource and mineral reserve estimates at the Company's material properties; the sufficiency of the Company's capital to finance the Company's operations; estimates of the Company's revenues and capital expenditures; estimated production from the Company's mines in the Ying Mining Camp; timing of receipt of permits and regulatory approvals; availability of funds from production to finance the Company's operations; and access to and availability of funding for future construction, use of proceeds from any financing and development of the Company's properties.Forward-looking statements or information are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks relating to: fluctuating commodity prices; calculation of resources, reserves and mineralization and precious and base metal recovery; interpretations and assumptions of mineral resource and mineral reserve estimates; exploration and development programs; feasibility and engineering reports; permits and licences; title to properties; First Nations title claims and rights; property interests; joint venture partners; acquisition of commercially mineable mineral rights; financing; recent market events and conditions; economic factors affecting the Company; timing, estimated amount, capital and operating expenditures and economic returns of future production; integration of future acquisitions into the Company's existing operations; competition; operations and political conditions; regulatory environment in China and Canada; environmental risks; foreign exchange rate fluctuations; insurance; risks and hazards of mining operations; key personnel; conflicts of interest; dependence on management; internal control over financial reporting as per the requirements of the Sarbanes-Oxley Act; and bringing actions and enforcing judgments under U.S. securities laws.This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements or information. Forward-looking statements or information are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements or information due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in the Company's Annual Information Form for the year ended March 31, 2012 under the heading "Risk Factors". Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information.The Company's forward-looking statements and information are based on the assumptions, beliefs, expectations and opinions of management as of the date of this press release, and other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements and information if circumstances or management's assumptions, beliefs, expectations or opinions should change, or changes in any other events affecting such statements or information. For the reasons set forth above, investors should not place undue reliance on forward-looking statements and information.SILVERCORP METALS INC. Condensed Consolidated Interim Balance Sheets(Unaudited) (Expressed in thousands of U.S. dollars)December 31, 2012March 31, 2012ASSETSCurrent AssetsCash and cash equivalents$ 69,018$ 109,960Short-term investments61,29044,551Accounts receivable2,61912,904Inventories7,7717,006Due from related parties104679Prepaids and deposits4,4605,210Assets held for sale3,355-148,617180,310Non-current AssetsLong term prepaids and deposits1,9116,015Investment in an associate6,62615,872Other investments41,24045,757Plant and equipment97,28068,788Mineral rights and properties304,358258,521Deferred income tax assets-171TOTAL ASSETS$ 600,032$ 575,434LIABILITIES AND EQUITYCurrent LiabilitiesAccounts payable and accrued liabilities$ 36,127$ 23,590Deposits received6,9317,268Dividends payable4,2914,271Income tax payable4,6615,082Liabilities held for sale71-52,08140,211Non-current LiabilitiesDeferred income tax liabilities23,35319,991Environmental rehabilitation4,5354,400Total Liabilities79,96964,602EquityShare capital233,030232,678Share option reserve7,5935,552Reserves24,71724,717Accumulated other comprehensive income25,07325,285Retained earnings153,660145,580Total equity attributable to the equity holders of the Company444,073433,812Non-controlling interests75,99077,020Total Equity520,063510,832TOTAL LIABILITIES AND EQUITY$ 600,032$ 575,434SILVERCORP METALS INC.Condensed Consolidated Interim Statements of Income(Unaudited) (Expressed in thousands of U.S. dollars, except for per share figures)Three Months Ended December 31,Nine Months Ended December 31,2012201120122011Sales$ 58,717$ 61,876$ 148,475$ 193,650Cost of sales21,24118,32656,68146,820Gross profit37,47643,55091,794146,830General and administrative6,4456,68119,48219,082General exploration and property investigation1,3454493,1983,450Other taxes8549532,5023,130Foreign exchange (gain) loss(697)451(332)(309)Loss (gain) on disposal of plant and equipment60(5)85248Income from operations29,46935,02166,859121,229Share of loss in associate(42)(137)(231)(45)Impairment on associate(9,640)-(9,640)-Write down of inventories--(348)-(Loss) gain on investments(78)1,543(671)(286)Other income2141,3163821,617Income before finance items and income taxes19,92337,74356,351122,515Finance income9999362,8412,716Finance costs(24)(22)(69)(68)Income before income taxes20,89838,65759,123125,163Income tax expense10,26711,63125,47137,991Net income$ 10,631$ 27,026$ 33,652$ 87,172Attributable to:Equity holders of the Company$ 5,236$ 20,025$ 20,850$ 64,138Non-controlling interests5,3957,00112,80223,034$ 10,631$ 27,026$ 33,652$ 87,172Earnings per share attributable to the equity holders of the CompanyBasic earnings per share$ 0.03$ 0.12$ 0.12$ 0.37Diluted earnings per share$ 0.03$ 0.12$ 0.12$ 0.37Weighted Average Number of Shares Outstanding - Basic170,748,449170,612,865170,720,668173,095,228Weighted Average Number of Shares Outstanding - Diluted171,072,001171,279,402171,072,034173,851,015SILVERCORP METALS INC.Condensed Consolidated Interim Statements of Cash Flow(Unaudited) (Expressed in thousands of U.S. dollars)Three Months Ended December 31,Nine Months Ended December 31,2012201120122011Cash provided byOperating activitiesNet income$ 10,631$ 27,026$ 33,652$ 87,172Add (deduct) items not affecting cash:Unwinding of discount of environmental rehabilitation24246970Depreciation, amortization and depletion4,4634,06511,6539,946Share of loss in associate4213723145Impairment on associate9,640-9,640-Write down of inventories--348-Income tax expense10,26711,63125,47137,991Loss (gain) on investments78(1,543)671286Loss (gain) on disposal of plant and equipment60(5)85248Share based compensation5467672,1542,386Income tax paid(7,948)(8,871)(22,323)(25,661)Changes in non-cash operating working capital20(1,664)9,341(11,802)Net cash provided by operating activities27,82331,56770,992100,681Investing activitiesMineral rights and propertiesCapital expenditures(15,442)(17,761)(41,855)(31,462)Plant and equipmentAdditions(10,990)(9,251)(24,475)(19,401)Other investmentsAcquisition--(595)(1,020)Net redemptions (purchases) of short-term investments(13,884)5,639(16,239)13,459Acquisition of Zhongxing/Chuanxin (net of cash acquired, $20)-(1,144)-(4,547)Acquisition of SX Gold (net of cash acquired, $554)-(11,112)-(11,112)Payment of debts assumed from acquisition-(16,095)-(16,095)Changes in long term prepaids and deposits3,85218,342(248)(2,753)Net cash used in investing activities(36,464)(31,382)(83,412)(72,931)Financing activitiesNet repayment from (advance to) related parties2978,275607(4,015)Non-controlling interestsContribution-361-5,519Distribution(7,224)(13,804)(14,612)(13,804)Cash dividends distributed(4,295)(3,381)(12,820)(10,686)Proceeds from issuance of common shares12645239996Common shares repurchased as part of normal course issuer bid---(35,380)Net cash used in financing activities(11,096)(8,504)(26,586)(57,370)Effect of exchange rate changes on cash and cash equivalents1,2395,410(118)3,530Decrease in cash and cash equivalents(18,498)(2,909)(39,124)(26,090)Cash and cash equivalents, beginning of the period89,334124,043109,960147,224Cash and cash equivalents included in held for sale assets(1,818)-(1,818)-Cash and cash equivalents, end of the period$ 69,018$ 121,134$ 69,018$ 121,134SILVERCORP METALS INC.Mining Data(Expressed in thousands of U.S. dollars, except for mining data figures)Three months ended December 31, 2012Ying Mining District1X Mines2BYPTotalProduction DataMine DataOre Mined (tonne)Direct Smelting Ore (tonne)2,334--2,334Stockpiled Ore (tonne)234,3608,932*35,558278,850236,6948,93235,558281,184Run of Mine Ore (tonne)Direct Smelting Ore (tonne)2,334--2,334Ore Milled (tonne)224,43027,265*32,699284,394226,76427,26532,699286,728Mining cost per tonne of ore mined ($)64.47-70.4865.26Cash mining cost per tonne of ore mined ($)54.92-24.7250.98Non cash mining cost per tonne of ore mined ($)9.55-45.7614.28Unit shipping costs ($)3.62--3.62Milling cost per tonne of ore milled ($)14.20-14.3914.23Cash milling cost per tonne of ore milled ($)12.61-13.4912.72Non cash milling cost per tonne of ore milled ($)1.60-0.891.51Average Production CostSilver ($ per ounce)8.53--8.53Gold ($ per ounce)409-646412Lead ($ per pound)0.27--0.27Zinc ($ per pound)0.22--0.22Total production cost per ounce of Silver ($)1.52-1.52Total cash cost per ounce of Silver ($)(0.17)-(0.17)Total production cost per ounce of Gold ($)630630Total cash cost per ounce of Gold ($)266266Total Recovery of the Run of Mine OreSilver (%)93.3-93.3Gold (%)92.792.7Lead (%)95.1-95.1Zinc (%)70.4-70.4Head Grades of Run of Mine OreSilver (gram/tonne)222-222Gold (gram/tonne)3.73.7Lead (%)3.2-3.2Zinc (%)1.0-1.0Sales DataMetal SalesSilver (in thousands of ounces)1,50811*-1,519Gold (in thousands of ounces)1.30.1*4.35.7Lead (in thousands of pounds)15,642788*-16,430Zinc (in thousands of pounds)3,231463*2833,977Metal SalesSilver (in thousands of $)37,551--37,551Gold (in thousands of $)1,533-4,9346,467Lead (in thousands of $)12,480--12,480Zinc (in thousands of $)2,061-1582,21953,625-5,09258,717Average Selling Price, Net of Value Added Tax and Smelter ChargesSilver ($ per ounce)24.90--24.90Gold ($ per ounce)1,193-1,1451,155Lead ($ per pound)0.80--0.80Zinc ($ per pound)0.64-0.560.631 Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.2 X Mines includes the XBG project and XHP project.* Represents development tunnelling ore at the X mines.SILVERCORP METALS INC. Mining Data(Expressed in thousands of U.S. dollars, except for mining data figures)Three months ended December 31, 2011Ying Mining District1X Mines2BYPTotalProduction DataMine DataOre Mined (tonne)Direct Smelting Ore (tonne)4,151--4,151Stockpiled Ore (tonne)169,926-41,197211,123174,077-41,197215,274Run of Mine Ore (tonne)Direct Smelting Ore (tonne)4,151--4,151Ore Milled (tonne)171,24311,667*32,408215,318175,39411,66732,408219,469Mining cost per tonne of ore mined ($)70.23-40.2764.50Cash mining cost per tonne of ore mined ($)55.92-19.3648.92Non cash mining cost per tonne of ore mined ($)14.31-20.9115.58Unit shipping costs ($)3.76--3.76Milling cost per tonne of ore milled ($)16.4129.65*13.2116.64Cash milling cost per tonne of ore milled ($)14.7626.86*12.8915.12Non cash milling cost per tonne of ore milled ($)1.662.80*0.321.52Average Production CostSilver ($ per ounce)6.8122.25*-7.44Gold ($ per ounce)3151,392*943378Lead ($ per pound)0.220.81*-0.24Zinc ($ per pound)0.17--0.19Total production cost per ounce of Silver ($)(2.67)21.17*(2.58)Total cash cost per ounce of Silver ($)(4.64)17.20*(4.56)Total production cost per ounce of Gold ($)943943Total cash cost per ounce of Gold ($)547547Total Recovery of the Run of Mine OreSilver (%)93.3-93.3Gold (%)91.291.2Lead (%)96.4-96.4Zinc (%)67.7-67.7Head Grades of Run of Mine OreSilver (gram/tonne)296-296Gold (gram/tonne)2.32.3Lead (%)5.5-5.5Zinc (%)1.4-1.4Sales DataMetal SalesSilver (in thousands of ounces)1,5426*-1,548Gold (in thousands of ounces)1.00.1*1.82.9Lead (in thousands of pounds)20,551444*-20,995Zinc (in thousands of pounds)3,525--3,525Metal SalesSilver (in thousands of $)38,734121*-38,855Gold (in thousands of $)1,075155*2,4443,674Lead (in thousands of $)16,719359*-17,078Zinc (in thousands of $)2,269--2,26958,7976352,44461,876Average Selling Price, Net of Value Added Tax and Smelter ChargesSilver ($ per ounce)25.1222.04-25.10Gold ($ per ounce)1,1591,3791,3761,276Lead ($ per pound)0.810.81-0.81Zinc ($ per pound)0.64--0.641 Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.2 X Mines includes the XBG project and XHP project.* Represents development tunnelling ore at the X mines.SILVERCORP METALS INC. Mining Data(Expressed in thousands of U.S. dollars, except for mining data figures)Nine months ended December 31, 2012Ying Mining District1X Mines2BYPTotalProduction DataMine DataOre Mined (tonne)Direct Smelting Ore (tonne)7,027--7,027Stockpiled Ore (tonne)616,49619,309*89,759725,564623,52319,30989,759732,591Run of Mine Ore (tonne)Direct Smelting Ore (tonne)7,027--7,027Ore Milled (tonne)609,36258,349*77,862745,573616,38958,34977,862752,600Mining cost per tonne of ore mined ($)65.16-60.7664.60Cash mining cost per tonne of ore mined ($)54.53-23.8650.67Non cash mining cost per tonne of ore mined ($)10.62-36.8913.93Unit shipping costs ($)3.72--3.72Milling cost per tonne of ore milled ($)14.64-15.1014.56Cash milling cost per tonne of ore milled ($)12.92-14.0013.04Non cash milling cost per tonne of ore milled ($)1.72-1.101.52Average Production CostSilver ($ per ounce)8.69--8.69Gold ($ per ounce)425-760444Lead ($ per pound)0.29--0.29Zinc ($ per pound)0.23--0.23Total production cost per ounce of Silver ($)1.66-1.66Total cash cost per ounce of Silver ($)(0.26)-(0.26)Total production cost per ounce of Gold ($)752752Total cash cost per ounce of Gold ($)356356Total Recovery of the Run of Mine OreSilver (%)92.6-92.6Gold (%)92.592.5Lead (%)94.5-94.5Zinc (%)67.8-67.8Head Grades of Run of Mine OreSilver (gram/tonne)224-224Gold (gram/tonne)3.13.1Lead (%)3.4-3.4Zinc (%)1.1-1.1Sales DataMetal SalesSilver (in thousands of ounces)4,00921*-4,030Gold (in thousands of ounces)3.40.2*7.210.8Lead (in thousands of pounds)42,7571,313*-44,070Zinc (in thousands of pounds)9,617574*28310,474Metal SalesSilver (in thousands of $)95,241--95,241Gold (in thousands of $)3,894-8,66712,561Lead (in thousands of $)34,412--34,412Zinc (in thousands of $)6,103-1586,261139,650-8,825148,475Average Selling Price, Net of Value Added Tax and Smelter ChargesSilver ($ per ounce)23.76--23.76Gold ($ per ounce)1,162-1,1961,185Lead ($ per pound)0.80--0.80Zinc ($ per pound)0.63-0.560.631 Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.2 X Mines includes the XBG project and XHP project.* Represents development tunnelling ore at the X mines.SILVERCORP METALS INC. Mining Data(Expressed in thousands of U.S. dollars, except for mining data figures)Nine months ended December 31, 2011Ying Mining District1X Mines2BYPTotalProduction DataMine DataOre Mined (tonne)Direct Smelting Ore (tonne)9,838--9,838Stockpiled Ore (tonne)516,987-74,863591,850526,825-74,863601,688Run of Mine Ore (tonne)Direct Smelting Ore (tonne)9,838--9,838Ore Milled (tonne)520,64711,667*60,185592,499530,48511,66760,185602,337Mining cost per tonne of ore mined ($)62.42-36.8759.24Cash mining cost per tonne of ore mined ($)50.05-16.2645.84Non cash mining cost per tonne of ore mined ($)12.38-20.6113.40Unit shipping costs ($)3.78--3.78Milling cost per tonne of ore milled ($)15.0229.65*14.0615.20Cash milling cost per tonne of ore milled ($)13.4326.86*13.5613.70Non cash milling cost per tonne of ore milled ($)1.582.80*0.501.50Average Production CostSilver ($ per ounce)6.5722.25*-6.88Gold ($ per ounce)2631,392*709303Lead ($ per pound)0.200.81*-0.20Zinc ($ per pound)0.16--0.16Total production cost per ounce of Silver ($)(3.52)21.33*(3.49)Total cash cost per ounce of Silver ($)(5.28)17.27*(5.25)Total production cost per ounce of Gold ($)708708Total cash cost per ounce of Gold ($)399399Total Recovery of the Run of Mine OreSilver (%)92.8-92.8Gold (%)92.292.2Lead (%)95.9-95.9Zinc (%)68.9-68.9Head Grades of Run of Mine OreSilver (gram/tonne)290-290Gold (gram/tonne)2.52.5Lead (%)5.2-5.2Zinc (%)1.4-1.4Sales DataMetal SalesSilver (in thousands of ounces)4,5126*-4,518Gold (in thousands of ounces)2.70.1*4.06.8Lead (in thousands of pounds)57,691444*-58,135Zinc (in thousands of pounds)10,858--10,858Metal SalesSilver (in thousands of $)128,467121*-128,588Gold (in thousands of $)2,998155*5,3538,506Lead (in thousands of $)48,798359*-49,157Zinc (in thousands of $)7,399--7,399187,6626355,353193,650Average Selling Price, Net of Value Added Tax and Smelter ChargesSilver ($ per ounce)28.4722.04-28.46Gold ($ per ounce)1,1401,3791,3241,254Lead ($ per pound)0.850.81-0.85Zinc ($ per pound)0.68--0.681 Ying Mining District includes mines: SGX (Ying), TLP, HPG&LM.2 X Mines includes the XBG project and XHP project.* Represents development tunnelling ore at the X mines.FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: Silvercorp Metals Inc.Jonathan HackshawDirector, Investor Relations604-669-9397 or Toll Free: 1-888-224-1881604-669-9387 (FAX)investor@silvercorp.cawww.silvercorp.ca