The management of Silvercorp has always approached the business of mining differently than most North American junior exploration companies. Rather than purely drilling for years to build up a resource that it intends to sell to someone else, Silvercorp aimed at the outset to go into operations quickly so that it could run a real and profitable business.
This long-term strategy was characterized by three key steps:
- Acquire a project and conduct selective exploration to further delineate its potential;
- Develop mine operations and generate profits before the project’s potential is fully drilled off; and
- Use the cash flows generated from operations to fund further exploration, resource expansion and production ramp up.
Silvercorp's long-term strategy produced three key benefits:
- Local Employment – mine development creates jobs for neighbouring communities, boosting the local economy and creating an immediate sense of community involvement in the project.
- Tax Revenue for Local Government – boost in local support and the taxes collected from profits ensures the support of the local government for the continuation and success of the project.
- Minimum Dilution for Shareholders – immediate profits and returns means immediate value appreciation for Silvercorp’s shareholders and minimum dilution of shareholders’ equity.
With over $140 million in cash and short term investments, no debt, robust operations, and high quality development projects, Silvercorp plans to grow through future consolidation, exploration, mine development and acquisition, with a focus in China.
Last updated October 19, 2012