Episode Details

Interview with Lon Shaver, President of Silvercorp Metals Inc.

Our previous interview: https://www.cruxinvestor.com/posts/silvercorp-metals-tsxsvm-undervalued-investment-series-with-lon-shaver-10671

Recording date: 29th September 2026

Silvercorp Metals Inc. (TSX:SVM, NYSE American:SVM) has spent years as a profitable silver producer in China whose valuation reflected the market's discomfort with single-jurisdiction exposure. That is changing. The company is now building two mines outside China, and President Lon Shaver believes the resulting multi-jurisdictional profile can change how investors view the business.

A fatal accident at a coal mine elsewhere in China prompted a national safety review after an investigation found criminal negligence by mine management and complicity by some local officials. Silvercorp proactively shut its mines to conduct an internal review. Ying restarted and ran at about 60% of targeted throughput in August, rising to close to 90-100% by the end of September. Shaver called it a one-time event and declined to update guidance. Strong zinc prices and improved zinc treatment and refining charges should help offset lost output. These conditions reflect lost lead-zinc production in China that has left smelters short of concentrate. All production is sold domestically in RMB, which has strengthened against the US dollar.

The first growth asset is El Domo, a copper-gold project in Ecuador. Construction is in its final push toward July 2027 commissioning. Two unusually wet rainy seasons have consumed some schedule slack, but contractors capable of deploying large crews have kept the target alive. The mill equipment is in transit. Shaver estimates El Domo will add about $200 million in annual revenue, a little under half from copper, compared with a Chinese run-rate he put at about $550 million. The capital cost is $284 million. Wheaton Precious Metals is providing a $175 million stream, about half of which has been drawn. Shaver cited a two-to-three-year payback at $3,350/oz gold and $5/lb copper.

The second growth asset is in Kyrgyzstan. Silvercorp paid an effective $150 million for a 70% controlling interest in a resource of around 6 million ounces of gold. The asset was previously advanced by London-based Chaarat Gold, which spent heavily before its lenders foreclosed. Shaver views the asset as poorly marketed and misunderstood. After closing in January and regaining site access in May, Silvercorp has prepared heap leach pad and crushing plant areas, completed a camp and started pit stripping. First ore on the pads is targeted for later in 2027. Phase 1, budgeted by Shaver at about $160 million, has a roughly four-year life that he believes could be extended by two years or doubled. Its cash flow is intended to help fund Phase 2, previously scoped at 200,000-230,000 ounces a year for 18 years.

Silvercorp's strategy is to pair lower entry prices in less contested jurisdictions with staged development that limits capital at risk. The company is also building a redeployable construction team and remains open to acquiring production.

Key risks are execution across two simultaneous builds, weather in Ecuador, perceived jurisdictional risk in Kyrgyzstan and further regulatory change in China. Investors should watch Ying's return to full output, any revised guidance, the remaining Wheaton tranches and first gold in Kyrgyzstan.

View Silvercorp's company profile: https://www.cruxinvestor.com/companies/silvercorp-metals

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