Silvercorp’s $60 Silver Play: China Cash Flow, Global Growth | Lon Shaver

Silvercorp Metals (TSX: SVM; NYSE American: SVM) President Lon Shaver joins Kitco Mining’s Kitco Spotlight with Paul Harris to discuss silver’s volatile run, the company’s low-cost China operations, and its plan to grow across Ecuador and Kyrgyzstan.

Shaver said silver’s pullback should be viewed against the scale of the move that came before it, with the metal still trading near $60 per ounce after roughly doubling from early 2025 levels. “This is a great time to be a silver producer at $60 silver,” he said.

Silvercorp produced 6.8 million ounces of silver and 7.5 million ounces of silver equivalent in fiscal 2026, which ended March 31, at an all-in sustaining cost of $14.25 per ounce. Shaver outlines how the company is funding growth beyond China, including El Domo and Condor in Ecuador, as well as the Tulukbash and Kyzyl Tash gold projects in Kyrgyzstan.
Shaver also discusses Silvercorp’s planned Hong Kong listing, emerging market valuation discounts, project financing, M&A strategy, New Pacific Metals, and key catalysts for 2026 and 2027.
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To learn more about Silvercorp Metals, visit: https://silvercorpmetals.com/

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02:04 - Silver Deficits, Volatility, and Market Liquidity
03:53 - Silvercorp’s Global Growth Strategy
06:42 - Fiscal 2026 Production, AISC, and Asset Complexity
08:49 - El Domo, Condor, and Kyrgyzstan Project Pipeline
11:37 - Silvercorp’s Growth Targets Through 2031
12:28 - Valuation Discounts and Emerging Market Risk
14:11 - Why Silvercorp Is Pursuing a Hong Kong Listing
17:40 - Management Team, Hong Kong Fundraise, and Investor Access
20:39 - China Loan Facility and RMB Currency Strategy
22:43 - Five-Year Vision, M&A, and New Pacific Metals
25:59 - 2026-2027 Catalysts: Kyrgyzstan, Condor, and El Domo
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Transcript

SPEAKER_00 0:06

Hello and welcome to Kitco Mining with me, Paul Harris. Today is Tuesday, June the 30th, and we're talking about silver. And joining me is Lon Shaver, president of Silver Court Metals, which trades on the TSX and the Nighty American under the ticker SVM. Lon, welcome to Kitco. Thanks, Paul. Great to be here. Great to have you on. We're going to have a very diverse conversation, I think, today, because we're going to touch on various things about the silver, the silver market, silver equities, and of course your asset portfolio. Let's start off with silver. There's been a lot of action in silver with the medal living up to its volatile reputation. It's come off about 50% from its all-time high at the start of the year. It's now trading about 60 US dollars per ounce. Lon, silver has uh, do you think silver has completed its correction or is there potentially more to come?

SPEAKER_01 0:59

Well, I think near term uh you know there's possibilities for this correction to continue, but I think overall, um, you know, I think we're looking at a market that nobody would have anticipated, nobody would have forecast uh a year ago. And I think it really is a combination of the two factors. One, the the sustained um you know, move in gold has changed people's perspectives on precious metals and and their you know role from uh from a hedge and and you know diversifying away from from currencies. And then also uh you know, silver has just uh been a uh a solid performer from a supply-demand standpoint, uh, where um it's getting harder and harder in the world to produce anything from a mine and get a mine you know permitted built, uh, let alone silver. Um but at the same time, you know, silver has you know proven its use in a number of these technologies that we really need as a society to uh electrify our economies, you know, hit uh different uh kinds of targets that we want to.

SPEAKER_00 2:00

Now the silver price um it w it went rapidly up over the last, well, last year up to up to around the start of this year, and it's come down quite rapidly. Um but on the supply and demand dynamics, you you mentioned there's less silver being produced, so production's declining, uh demand is increasing, so the the silver market deficit is increasing uh and has increased, has continued to increase as the silver price has done this up and down. Is that a bit uh bit of a concern or is that a bit strange, you think, the fact that the deficit's getting bigger and the prices come you know come down quite severely in in recent times?

SPEAKER_01 2:38

No, but I I think that uh some of those uh near-term price moves are really driven by uh market dynamics that are tied into completely different factors, uh liquidity of market players. Um also there was a uh uh a hot oil market that attracted a lot of the speculative money. So you know it's to be expected that you know, over a longer-term positive trend in silver pricing, you'll have these uh these moments of you know extreme exuberance, um, but then uh moments where it's cooled off, and and really it's a question of direction. You know, we're only talking about uh silver at 60 because it was uh you know peaking out at 120. If it had done a slow, steady climb from you know prices sub-30 up to 60, uh, we wouldn't be talking about this sort of, oh, is it over? It would it would be talking about, hey, this is great times to be a silver producer at $60 silver. So I think it's just a matter of letting some of this um uh volatility in the marketplace play out. Uh also it'd be nice to see a sustained you know resolution to what's going on in the in the Gulf and and clarity on on uh the oil markets.

SPEAKER_00 3:51

Thank you. Yeah, I guess we can't forget that um the silver price is even at $60 per ounce is about double what it was in early 2025. Let's talk a bit more about Silvercorp medals now. Silvercorp, in some ways, is uh not your typical silver company, and for that reason it may be uh a bit more challenging for many investors to get their heads around. As you've got an asset asset base in a you know quite a diverse group of countries, China, the Kyrgyzstan Republic, uh, Ecuador. Um you're listed on two North American exchanges, and you're now in the process of listing on the Hong Kong Exchange. Producing mines in China, and as I mentioned, development projects in Ecuador and the Kyrgyzstan Republic. Uh you've got a lot going on. Um, but you know, what's the method behind this, uh uh Lon?

SPEAKER_01 4:43

Well, I I think it's the the fact that uh you know we've we've grown the company and we've generated great returns by growing and operating uh these mines in China that have produced some very good returns and uh still have quite a long future ahead of them, you know, based off of uh known reserves, but then resources on top of that. Uh so that's that's a nice solid producer, but um you know, we've been a bit of an unusual company in the in the Western markets for being a Canadian company with you know these interests in these Chinese silver mines. And I think that has uh you know caused some investors to uh to be reluctant. So when we look at going forward, well, our we have a bit of a dual strategy. One is let's grow the company and add other assets in other jurisdictions, because whether that was uh China or or even Mexico, if you're a single asset, single jurisdiction company, you know, you're vulnerable to uh you know to risks of that uh you know that operation. Um, you know, we saw that there's a canyon producer that had uh some ground issues at one of their mines, but it wasn't their only mine. So while they they took a bit of a hit, uh it wasn't um uh as bad as it could be if that was your only operation. So we're looking to grow the company, add to the asset base. And then as you mentioned, the Hong Kong listing is an effort to get out and to market our story to a new group of investors. You know, by being listed on the TSX and then adding the NYC American, you know, we've been able to uh reach out to Western investors in North America and uh Europe, for example, uh and other, you know, and parts of Asia. Uh adding a Hong Kong listing really opens us up to another audience that really hasn't uh looked at our stock or doesn't you know really trade North American mining companies. And so that's another way that we can get our story out and achieve our goals, which is to uh get our investors a return on their investment.

SPEAKER_00 6:42

Absolutely. Uh I want to circle back to the the Hong Kong listing in a little bit later in our conversation. Um, you produce 6.8 million ounces of silver and uh let's say 9,000 ounces of gold or 7.5 million ounces silver equivalent in your fiscal 2026, which I believe was to March 31st, 2026, at a very, very attractive audience sustaining cost of $14.25 per ounce. Um, you know, congratulations there, um, great performance. Investors, I think, tend to prefer simplicity, and what we've seen with barrack mining is that perhaps uh the company got too complicated with in too many jurisdictions, and particularly in too many jurisdictions that some investors thought were a bit too risky. Is there a danger of uh Silvercorp being viewed in a similar way?

SPEAKER_01 7:31

Well, I think at this point um adding assets, and and I think we you know we've been we've been uh proven out um uh from a I'd say from a uh execution and a country standpoint with our move to Ecuador. I think it was well timed. We made a timely purchase at a good price to get uh a mine uh that we're now in the process of building. Um commodity prices have gone in our direction, returns from that uh project look better. Uh we got not one but two other uh projects that we think we we got for for free um you know from that acquisition. Uh from an investment standpoint, I think we were well timed uh to make the uh strategic investment into um into New Pacific, which has made two great discoveries in Bolivia and is advancing two projects there. And when we look at what we've uh added in Kyrgyzstan, is you know, show me a place, uh an environment where you could get uh access to six million ounces of gold of the price that we got. You know, clearly we've had to uh dig a little deeper and find something a bit off the beaten path. We think we've you know made that move, which is a uh smaller risk in terms of capital investment upfront, both in the terms of acquisition and in development, but it gives us the ability uh to really uh create value.

SPEAKER_00 8:55

Okay, let's dig a little bit deeper into your your development pipeline. You mentioned Del Domo in Ecuador, which is currently under construction. You've also got the Conor project in Ecuador, and as you mentioned in Kyrgyzstan, you've got the uh you're gonna have to correct my pronunciation here. The Tilcubash. Tilcubash, uh you've got the Chiselet. Thank you. Chisel Touch, God projects. Um, I would have come up with something very, very different to that. Um, so you've got those. What's your sort of how do you see your capital expenditure uh going forward? And you know, what's going to get the money and when what's the what's the pipeline? What's the the timing on that?

SPEAKER_01 9:33

Well, uh obviously as you pointed out, El Domo's in uh construction, and we've got a pretty big uh build year ahead of us in terms of this fiscal year. Um and CapEx there, you know, 284 million is the uh is the estimate. Uh you know, this year we'll be spending a fiscal year 160 of that. Uh, I think we're 45 into it as of uh the end of March. Um you know, importantly, um out of that uh capital budget, uh Wheaton, who has a stream on uh on the gold and the silver, uh, are putting 175 million uh of that uh 284. So we'll be drawing down. We made one drawdown already, which we did last fall, uh, anticipated a couple more this year, and then one into 2027 likely. Um so that'll be uh funded out of cash on hand and uh from their contribution. Uh Condor, um you know, fairly minimal expenditures in the next couple years, uh at least initially, while we're uh proving up the asset and moving it through feasibility. But we would look to start spending this fall on driving two tunnels into the into the deposit that we'd use for uh exploration. You know, that costs 15 million, so very easily managed from cash flow. And then switching to uh uh Kyrgyzstan. Um that's a two-stage or a two-phase development between Tulco Bash and Kiziltash. Uh, Tulco Bash is a smaller, um, more manageable open-pit heap leach project that we uh just recently announced a budget of uh just over 160 million uh to build that. And uh we think we can get that up and running, putting ore on pads late 2027, starting to see gold in 2028. So that will generate cash flow that would go towards construction of the bigger project, phase two, Kizeltash. And uh that uh still working on the estimates, but you know, that'll be a uh a much bigger capital number. Uh but as I said, that we can fund out of cash flow from the first project.

SPEAKER_00 11:43

Okay, so you produced what 7.5 million ounces of silver equivalent in fiscal 2026. With these developments, what will that get you to?

SPEAKER_01 11:54

Um, well, I mean, if you're trying to take it to silver equivalent, um that's doing a lot of math. I think the easier way of looking at this is thinking that uh the operations of China would be you know somewhere between 450 to 500 million, depending on metal prices in terms of revenue, a couple years out. And as we stage in all these projects, we would get over uh you know 2.2 billion in revenue uh in um uh in say 2030, 20 uh 31, uh with the addition of those projects in uh in Kyrgyzstan and adding uh Condor uh in addition to El Domo.

SPEAKER_00 12:34

Okay. Now uh looking at your your your financials and the charts, um I think it's fair to say you traded a discount to other companies, other silver companies in particular of a of a similar size. To what extent do you feel that uh Silver Cork metals perhaps labors under an emerging market discount? Um and is that because you're listed on the North American exchanges where investors are perhaps shying away from more riskier emerging market jurisdictions?

SPEAKER_01 13:02

Well, I think it's a function of that. I think it's a function of uh being a single asset and single jurisdiction company. And so uh, you know, there's been other companies in our peer group that uh, for example, single asset, single jurisdiction in Mexico, and uh had uh uh lower valuation multiples. Uh some of those have since disappeared and been absorbed by the larger, more diversified companies. And so I think the name in the game is uh the markets can accept risk and can accept being in some of these uh riskier jurisdictions, uh, but ideally it's not the only assets you have. And so that's that's really what our strategy has been is now let's go and add some other assets. Doesn't mean you know coming back to your earlier point that we want to have 12 operations in multiple jurisdictions around the world, but I think we can uh we can add some value here by picking up some some valuable assets that we can uh build, bring into production, and capture the re-rate for our shareholders, not just in the asset, but in the overall uh re-rating of the company uh just because of uh being a bigger and more diversified company.

SPEAKER_00 14:17

Okay, let's uh circle back around to the the Hong Kong listing, the sort of tertiary or the tertiary listing in Hong Kong and some more of the rationale there. You you you're talking about uh diversifying your investor base. What kind of investors are you hoping to encounter in Hong Kong? Is that more institutions? Is that more retail? Do they have other precious metals opportunities available to them, or will you be sort of quite a unique, uh quite a unique name for them?

SPEAKER_01 14:44

Uh short answer is it's a mix. Uh there's definitely uh anywhere from uh retail, smaller groups to some larger funds and strategics have expressed an interest in participating. I think the Hong Kong Exchange has done a lot of work to get out and market their uh availability to uh to Western companies to come get a listing there and to get access to that audience. Certainly the interest in mining and metals and in particular precious metals has been growing in that market. Uh, and so stocks trading on the exchange with that profile are getting attention. We think we do provide a bit of a uh a unique exposure uh to silver. Um a lot of the other companies are more gold focused, so we do provide that silver focus uh to investors. Uh, also being a Western company and with the growth profile and in jurisdictions that I think people are becoming receptive to. Uh, Ecuador is certainly uh top of mind given the number of uh assets and projects that have recently been acquired by other Chinese companies in uh in Ecuador. I think us as a a uh Canadian operator listed on Hong Kong uh with that added to our profile, um, you know, I think that will be something that will resonate as a uh as a growth story for that market.

SPEAKER_00 16:10

Do you get the feeling that uh the on the Hong Kong Exchange, the investors there, they have a, I don't know what the word is, a more tolerant view of emerging market risk. Um they're not so hung up about it as perhaps investors in North American markets are.

SPEAKER_01 16:28

Yeah, I don't know whether it's uh it's uh tolerance or it's more um more realistic in the sense that I think people um who look at some of these safer jurisdictions uh trick themselves into believing that they're safe and are prepared to pay a premium for that safety. Whereas that doesn't always play out that way. Uh I think there's a bit more of a recognition in that market that uh some of these other places around the world that you know might have that perspective or or uh reputation really are not, you know, just given the fact that other companies are there. And so if you use Kyrgyzstan as an example, you know, there's a number of other Chinese companies that have assets in uh Kyrgyzstan. And right now, Central Asia is becoming quite a hot spot, not just for uh you know Chinese companies, but we're finding you know Middle Eastern and even North American investors are expressing interest in Central Asia. So I think our timing has been good. Um we're certainly getting a receptive audience for uh having these projects and groups interested in seeing whether they can invest or find a way to participate along with us, just given our uh the assets that we've secured, as well as our you know, our track record of execution.

SPEAKER_00 17:47

Now, the Silver Court Medals has quite a strong Chinese aspect to it with the management team and the board under the leadership of Chair and CEO Rui Feng, and of course you have the two producing mines in China. These would seem to be sort of you know considerable advantages as you go ahead with the Hong Kong listing. It's you know you're giving investors there something that they can really perhaps understand and and you know not have so much doubt about as if you were uh let's say a generic Western company coming in and saying, hey, look at us, aren't we great?

SPEAKER_01 18:19

No, that's that's certainly um you know that's certainly that uh an aspect that you know we have, it works in our favor. Um it hasn't happened overnight. Uh you know, we've uh we've built that team over years, and it's not just um obviously head office management, but it's operating management at the asset level. Uh, you know, and interestingly, we're you know, we're finding ways to to blend that uh corporate DNA uh in the teams that we've been building uh in Ecuador uh with you know Canadian and other South American presence along with Ecuadorian teams, but then including our Chinese colleagues who have experience building uh lines. And uh with the entry into Kyrgyzstan, we're looking to replicate that. We've inherited a good team in Kyrgyzstan, um, but they've been focused up to now on um you know exploration, development, permitting, um, but now we have to wrap the team up and get uh construction capabilities uh to go in and build, and and that's uh you know proving to come from a number of different places.

SPEAKER_00 19:28

With the Hong Kong listing, um are you planning to do a sort of secondary raise on that market?

SPEAKER_01 19:34

Uh yeah, and that's really uh just for the purposes of uh providing some stock into that market. Uh we considered getting a listing uh in 2024, and at that time uh we weren't planning to do a raise associated with the listing. Uh we had some more feedback that you know maybe that wouldn't be as successful because we couldn't attract the players to actually participate in the stock. Uh so by by doing you know what we feel is a balanced manageable you know raise along with this uh listing, we'll be able to get shares in the hands of uh some shareholders. Uh and then to be honest, uh hopefully uh at some point they they trade the stock.

SPEAKER_00 20:19

And how much would you potentially be looking to raise there?

SPEAKER_01 20:22

I mean it's it's still uh it's still to be determined, but you know, I think somewhere in the uh $200 million range would be uh a way, uh a balance, uh not raising too much, you know, at this at these prices, uh, but uh being able to provide some liquidity and uh getting some some shares in hands of uh investors based there.

SPEAKER_00 20:46

Do you see Hong Kong, China in general as a fertile market for fundraising? Um in April you entered a three-year loan agreement for what 1.5 billion remember in principle, or which is about what 220 million US dollars to bolster your treasury ahead of these project developments. Is there a specific reason you raised that money in China rather than in US dollars or another currency?

SPEAKER_01 21:10

Well, I I think there's um there's a couple answers to that question. One is uh you know, based on uh you know what we saw in terms of the lending appetite from the institutions and the financing appetite, uh, there's a recognition in that market that uh mining is a good sector to deploy capital into and everyone's underexposed. Uh so the so that's sort of the big picture you know element in terms of their uh their being capital available and uh willing to seek investments you know in the mining sector. You know, for us, you know, in this term loan that we you know we established, it was the ability to borrow RMB uh outside of China, which we can immediately convert to US dollars uh and take wherever we Need to. So we can bring that back to Vancouver, we could bring that to Ecuador to build, we can take that to Kyrgyzstan or wherever else. But then what we are paying back in that uh in that loan is in RB, which is uh the native currency of our existing operations, and so we've always been um un or under-levered uh for what are very uh solid assets uh in uh in our Chinese mines. So this has been a way in which we've been able to tap in the market uh and get access to funds that we can grow internationally, and those rates that we're uh paying are are quite attractive, and I'm not sure we could get those kinds of uh rates uh for that time of type of structure uh in North America.

SPEAKER_00 22:49

Okay, fair enough. Um let's sort of draw our conversation to a close by sort of focusing on some sort of highlights. Um, first off, Lon, um you've got a lot of development underway, you've got a lot of growth underway. What does Silver Cork Medals want to be in, say, five years' time?

SPEAKER_01 23:05

Well, you think it would be a multi-asset uh operator uh operating um several long-term sustainable profitable mining operations, and where you can see that in aggregate, uh, you know, from a cash flow standpoint, uh, and applying you know market standard uh type valuation metrics, that you would be in the market cap and in the in the profile where any kind of investor would be open and looking at you. Um so that big funds, small funds, retail, really we've built a company that isn't limited in terms of our audience, you know, based on our our size and our market cap.

SPEAKER_00 23:52

You've made some very shrewd uh acquisitions in recent years. You mentioned some of those earlier. Um is this something that's likely continue, or is your development pipeline pretty full enough at the moment?

SPEAKER_01 24:03

Well, it's definitely full, but we also know that if you get out of the game, yeah you you can miss things. And so uh it's all part of the process. Uh you know, we we we stay active in that review process because you never know what you're gonna find. And if you it's really good, uh you can find a way to make it happen. And uh and a number of the things that you know that we've well that you've mentioned, and the other things that we've looked at and taken a shot at in the past, um, those have been things that you know we had looked at in previous years, uh, had some interests, things weren't right, and then later on uh the circumstances changed, and because we had looked at it already, uh we're ready to go and the timing was right. And so I think that's important for us is to keep active, to keep looking, uh, never know what you're gonna find. It might be great for right now, we'll make it work. Uh, if it's not great for right now, then we're ready when circumstances change.

SPEAKER_00 25:03

Earlier in the conversation, Lon, you mentioned the uh strategic investment you've made in New Pacific. Uh is that with a view to potentially if um New Pacific advances its projects in Bolivia, that that may be brought into the the bigger company into Silvercore?

SPEAKER_01 25:20

Yeah, it could be, and that's going to be a function of uh the circumstance of the time, uh, both for New Pacific and for Silvercore. So look at it and see is there a transaction that makes sense for both parties and for shareholders of both groups. Uh if that's the case, then um and there's what you know what we see for you know our criteria, which is one or more uh attractive mines to be built, then that could be the the scenario. But there's that's not the only scenario, and we've we've shown uh our willingness to uh uh to make the decision be driven by the financial, the numbers and returns, not just the hey, we have to have this production.

SPEAKER_00 26:05

Okay. Now you you've got a lot of uh development going on, so let's end with uh if you can do a quick recap of what some of the key catalysts for the remainder of 2026 and going into 2027 will be for our viewers to keep uh an eye open for.

SPEAKER_01 26:21

Well, I I think um uh key catalyst that maybe people are less familiar with or you know are are gonna be more uh surprised by will be uh moving ahead in Kyrgyzstan. I think that's something you know people didn't realize that you know we've bought something that's ready to go and we're gonna be spending uh you know meaningful dollars this year in 2026 to start construction of the first phase. So I think that will be a catalyst that will catch people off guard. Similarly, um moving ahead and starting to spend money on Condor uh I think will be a very key catalyst uh because it'll be a step, and again, you know, incremental uh step towards demonstrating that this could be you know a hundred thousand ounce of gold producer, you know, 100% to our account. And so that's exciting. Uh those would be two um key uh key catalysts. Um I think the the usual ones will be looking at the progress uh at El Domo. Uh people you know like to see the uh the the pictures and the fact that the assets are the assets moving ahead and uh we're we're moving towards um you know getting the plant site in in place and and actually beginning operations, which we're targeting for mid-next year. So I think that's the you know the other main uh the other main catalyst on an ongoing basis.

SPEAKER_00 27:44

Excellent. Well I wish you the best of luck with those developments. Once again, Silver Court Metals trades on the TSX and the New York Stock Exchange American market under the ticket SVM. Lonsheva, thank you very much for joining me today. Thank you, Paul. I appreciate the the chance to chat and look forward to doing it again. Oh we definitely shall, because we've got a lot, we will have a lot to catch up on with all these developments. And of course, to our viewers, if you like what you see, don't forget to hit that subscribe button. I'm Paul Harris, and this is Kitco Mining.