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.
The company 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. Silvercorp 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.
The new safety standards stem from a nationwide crackdown after a coal mine accident in May that prompted Chinese regulators to enforce stricter compliance across all mining operations. The “Six Major Safety Systems” include monitoring systems for underground personnel, communication systems, and emergency response capabilities, among others. Non-compliance can lead to production halts, making these upgrades critical for continued operations.
Silvercorp is a Canadian mining company producing silver, gold, lead, and zinc with a long history of profitability and growth potential. The company’s strategy focuses on generating free cash flow from long-life mines, organic growth through drilling, merger and acquisition efforts, and commitment to responsible mining and ESG. The current slowdown is expected to be temporary, and the company aims to resume full production once all required upgrades are completed and approved by regulators.
For more details, the full press release is available at https://ibn.fm/UyR0X. Latest news and updates relating to SVM are available at https://ibn.fm/SVM.
