Silvercorp Metals Inc. (TSX: SVM) (NYSE American: SVM) announced a temporary slowdown at its Ying and GC mining operations as it implements new nationwide mine safety requirements introduced by Chinese regulators following a fatal coal mine accident in May. The company expects production to be reduced by 10% to 15% during the current quarter and by 40% to 50% at the Ying Mining District and about 50% at the GC mine during the July-September quarter while required upgrades are completed and approved.
Silvercorp said it has engaged five certified vendors to install the required “Six Major Safety Systems” at non-compliant mining levels at an estimated cost of approximately $5.5 million, with completion expected in about 50 days. The company also plans to spend an additional $6 million on facility improvements and equipment upgrades, including replacing electrical cables with halogen-free flame-retardant cables, while resuming production in phases as individual mining levels receive regulatory approval.
This news matters because Silvercorp is a significant silver producer in China, and the temporary slowdown could impact global silver supply and the company's revenue in the short term. The safety measures, while necessary, will require substantial capital expenditure and may delay production targets. Investors should monitor the company's progress in implementing the upgrades and the timeline for regulatory approvals, as any delays could further affect production.
For more details, the full press release is available at https://ibn.fm/UyR0X. Additional updates on Silvercorp can be found in the company’s newsroom at https://ibn.fm/SVM.
